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Can your software replace the role of a financial analyst totally? Think again!

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Whether you're a start-up or experienced business person, you have your call to decide which one is better for your business: a finance staff or an artificial intelligence system.

As we all know, data is everything today. It is why big institutions are paying big amount of investment to collect data in all sorts and forms. For example, Big Data is now the topic going right from local start-ups to multinational corporations.

Being an CFO, who had over 12 years of experience working in financial and accounting industry, I think we are lucky enough to witness the shift from data collection to data analysis.

While many firms out there are still focusing on compliance, I am already gearing my staff toward the future of Big Data.

The future is here!

It is hard to believe that I will not have to conduct bank reconciliation, data verification by checking receipts or even filing a simple Business Activity. I could realise that future is here already! 

Financial and business software are transforming toward digital data analysis. The software functions could communicate to the tax office and banks. There is no extra need for manual data checking and reconciliation to get your data in the right format.

So what finance majored students are going to do after their graduation and years of professional development? It is scary to think about the young generation of finance people who are still being trained about the skills that were already replaced by innovative business software.

Would accounting jobs be no longer relevant? The answer is No! Finance jobs can still survive. Business clients want services that no software could possibly offer.  

Here is a good example, your sales team is about to seal a new contract that requires extra resources. The team requests you to provide extra resources and a quick update on the financial viability of the new job. You can straightaway contact your analyst and request a quick insight on how much the company could earn and spend to make a certain profit. With the information, your sales team and you can go on to tender with a peace of mind!

There is another good example of using Big Data in finance & accounting. One of our clients is doing software development. They are in the process of preparing for the launch of a brand new product to the market. They come back to us and request a set of sales data in the past 5 years to show them sales activities could answer the following queries:

  • What is the new recurring sale per month?
  • What is the churn rate?
  • What is the cost of acquiring new sales? 

I can provide you the answers to within 45 minutes with suggestions to benefits your product launch.

In both of the examples here, we can see the finance role has changed yet it still stays relevant to a client’s need. The only that changed is the role have to move from a data collection into data analysis to produce business intelligence and help clients making important business decision instantly!

We think the future of data mining, business intelligence and business solution will give accountants a future career, growing side by side with technology. At Tailored Accounts, we don’t know the future, we create them!

 

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(Audio) How much attention do you pay to the biggest item in your books?

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Today, we were lucky enough to have a meeting with one of the top HR experts in the country. The discussion centred on how poorly HR has been managed in small and medium enterprises, leaving it a sizeable contributor to business failure.

From an accounting perspective, what could be an explanation? Although there are many self-professed payroll experts, few have the experience and qualifications to consider themselves authorities on the issue. While many have a basic understanding of the relevant software, most fail to grasp the full implications of compliance with payroll systems and the subsequent transactions. Some business owners choose to forget experts altogether and attempt to manage their payroll themselves, usually using outdated and flawed methods. Alternatively, a few accounting and bookkeeping provide payroll services, but these tend to solely give out advice, leaving the actual process to business owners or their contractors.

HR and Payroll are immense problems that have been attracted very little attention from business owners. Believe it or not, we are currently looking after over 300 sets of books from businesses ranging from $50,000 to $20 million per annum and the biggest expense in their books is always salary and wages. Think back - if you spent 40-60% of your budget to salary and wages, how much did you really invest to make sure that it was managed properly? In our opinion, at least 1% of salary and wages should be invested HR, and a further 1% should go to payroll processing and compliance management. So if you have 10 employees receiving a salary package of $100,000 per year, you should put aside $10,000 for HR and $10,000 for payroll management, so as to ensure you are not only legally covered but also getting the best return on your biggest investment!

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(Audio) Cloud accounting is the past, so what will be the future?

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In 2009, we were first introduced to cloud accounting, which was web browser accounting software like Xero. We really like it and strongly believe that it will be the future! 10 years into this technology and changes, we think Cloud accounting might not be the future anymore, even though there are still businesses and accountants who are still scare away from the Clouds.

So what should be the next?

We predict the future of accounting software in general to be more decentralised. Each business, each user will be using very different software. Accounting functions also will be varied in different area of business.

We think that cloud accounting will actually disappear in SMEs. The SMEs would be able to employ simpler business applications to manage some parts of their accounting function. The applications would be able to process financial data for management and compliance purposes.

Let’s pick an example of a coffee shop business:

Jane is a coffee shop owner. She is using multiple business applications to auto-feed her financial data into accounting software. It could be Xero or Intuit QuickBooks.

In the future, Jane might not need a cloud accounting software to manage all complicated accounting transactions since her business applications could be able to do just what Xero or Intuit QuickBooks is capable for.

Point of Sales (POS) application should be good enough to produce a comprehensive sale reports for Jane to keep track of her financial sale performance. POS could also be able to integrate to the ATO database so ATO could collect GST and tax information instantly.

HR application could be able to handle all core payroll function from on boarding, timesheet, rostering, leave, payroll, payment summaries, and superannuation to reporting to the ATO.  There might not be a need for Jane to integrate from HR to any accounting system. The list then goes on to all other areas of their business: Bill management; Inventory; Asset management…

What about bigger guys in town?

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(Audio) Improving Xero performance to utilize all current and new functions

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Congratulations to Xero and their team for reaching the 1M subscriber milestone just a few months ago!

From day one, we have been a big supporter of Xero, even back when MYOB and QuickBooks were the flavour of the months. Xero is a markedly successful New-Zealand start-up currently going global. Already, it has offices located around the world and over 1,800 staff members. The product has been reported as a highly effective financial planning tool, providing an innovative accounting service that will not only change the way accountants work but also how businesses perform.

Every year, our team has attended XEROCON, the annual Xero conference in Australia. There were over 2,000 accountants and bookkeepers at the last annual gathering, all eager to witness how much Xero can offer to accountants and business owners to facilitate their professional structure.

The changes Xero has undergone, with its rapid level of improvement and innovation, mean that the product is truly unique from other available services. Nonetheless, there are still business owners believing that there are only limited differences in subscribing to Xero over other accounting software.

In the past few months, we have seen many business owners either DIY their Xero setup or getting experienced bookkeepers to do the setup for them, with problematic results. Some attempt to use Xero as they were previously using MYOB or Excel.  Bills, hours worked and invoices were entered manually one by one to Xero after they got paid, simply for the purpose of record keeping and tax. Reports were done in Excel manually; Xero was only used to get data collected during the quarter. Super was still getting paid manually by using Super Clearing House, even though Xero can almost automate this process. These are only a few examples of how Xero was being used at a below optimal level.

It is sad to see what these business owners were doing- essentially, they were fuelling their electric cars with petrol! Hence, the efficiency of Xero usage was only at about 20%! Our role is to explain the benefits and services of Xero (not just with accounting) and demonstrate how to get Xero to collaborate with other software to ensure all information is synched together. These improvements can transform business structure and maximise both efficiency and profitability.

Here are few tips of utilising Xero:

Media

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New Feature Review - Exploring Xero Projects (Part 1)

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If you are part of a business that still manually tracks hours and costs or manages professional projects using as spreadsheet, thenyou should most definitely read on. Currently, many companies continue to coordinate projects usingpaper or spreadsheet tools, whichcan cause problems. These can include:

  • Limited Access and Lack of Visibility: Limitations of data visibility can inhibit your overall perspective of the projects. It is also very difficult to see the status of projects, meaning external communication with employees are constantly needed to coordinate the work.
  • Duplication: Sometimes, information must be re-submitted multiple times in traditional spreadsheets if auto-filling is not possible. This can be time consuming and lead to mistakes.
  • Loss of Data: Since the software does not interact with employees in real time, it may result in loss of data.Some inputs or outputs may not be included in the record, which can lead to worryingly inaccurate data being collected.

Luckily, there is a solution. Xero recently introduced a new feature called ‘Xero Projects’ which is fully integrated with Xero to provide an interactive project management tool. It works with new, on-going or archived projects to solve all the issues detailed above, whilst maximising profitability and efficiency. It is essential for business owners and managers to easily identify the projects that deliver the best return on investments, as well as those that may need restructuring. Xero Projects provides a simple platform to assist in meeting these goals.

For businesses undertaking complex projects, good project management software is undeniably essential. Smaller businesses, however, may be more reluctant to invest in a formal accounting software program. In an effort to reduce costs, businesses owners continue to waste hours of their precious time on managing these projects manually. It is important to understand that having a simple way to capture, track and report the time and money spent on each job allows owners to proactively invoice, make informed decisions and manage the projects more efficiently. This will ultimately lead to higher profitability and increase understanding of your finances. Further, it helps to streamline the workflow and be a great asset to the business without adding unnecessary complexity.

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Exploring your Business Digital Assistants

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Once upon a time, mobile phones were simply considered Personal Digital Assistants (PDAs). With the advancement of technology, we now have smart phones able to assist with many other activities, both personal and professional. It is, then, not surprising that many business owners call their phones Business Digital Assistants – BDAs. It is increasingly popular nowadays for entrepreneurs to enlist the help of mobile apps to increase productivity.

Business owners can also use apps to help run their business more smoothly. This is a perfect solution for small and medium businesses who have limited funds to spend on administrative costs, such as personal assistants or fancy accounting systems.

Let’s look at a case study showing how a small business can adapt to new mobile technology.

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Software for Healthcare and Special Care Start-ups: Choose XERO

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With only a few accounting software options on the market, it seems healthcare and special care industry start-ups under NDIS have only two options to choose between: MYOB or XERO. However, NDIS-related services can be complicated, and the two systems are not necessarily equal in terms of their benefit to users. Given your limited budget as a start-up business, you might want to learn more about these two software options before making your choice.

Here is Tailored Accounts’ take in the issue. 

Comparing MYOB with XERO is like ranking Taxi Services against Uber. XERO creates a community of accountants, bookkeepers, application developers, and business owners, where ideas are exchangeable. It acts as a platform that can facilitate communication between those in the industry. MYOB is trying to follow in their footsteps; however, XERO is still the market leader for three reasons.

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Accounting Students Land Jobs Through AccountantChange #2020

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A key reason for Tailored Accounts's continued excellence is its commitment to continuously update our staff's knowledge and skill. At Tailored Accounts, all employees receive a one-day training seminar at the end of each month. This program is designed to keep accountants on the forefront of accounting skill and innovation, whilst maximising their leadership and customer relations management.

However, in the job market, employers often feedback that it is difficult to recruit an graduate accountant who could possess a desired set of  skills. Realising the unmatched gap, Harry and his colleague initiated a new program where their monthly training seminars were available to university students as well. In January 2017, the team at Tailored Accounts chose to name the training initiative' AccountantChange #2020', designed to help students explore the world of accounting both locally and on a global scale.

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CFO to the Rescue for NFPs

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The Not-for-profit sector (NFP)is facing a tidal wave of trouble. Heavy cuts to Government funding, due to poor economic performance and changing funding culture, will force the NFP sector to adapt to new business models to compensate. On top of that, many NFP organisations are Industry Associations, meaning their secondary sources of funding are corporate or individual industry members. This second source of income is also at risk.

The economy is slow, and individuals are trying to save money in light of low wage growth. At the same time, businesses performance is stagnant, meaning their event sponsorships decrease significantly.

Boards of directors are well aware of this economic shift, pressuring executives and staff to find a way to survive. However, there is no easy solution. At Tailored Accounts, we strongly believe that your Chief Financial Officer (CFO)is central to saving your organisation from shut-down.

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Is it possible that dark days are ahead for the third sector of society?

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Sadly, it seems likely.Although some of us believed that non-for-profit (NFP) organisations would never be in financial trouble, the 2015 Australian Charities Report shows that 42% of charities experienceda reduction in income since2014. There are two possible causes: decreases ingrantsand membership reduction.

Let's look at an example of the former case. Recently, NDIS (National Disability Insurance Scheme) has been implemented, meaning that organisations working with vulnerable people are no longer eligible for grant money. This is a significant change-previously organisations were solely responsible for disability care and thus given sizable funding. The NDIS may be good news for some, but such changes cause problems for the charities themselves.

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