Keeper Of Books: Out With The Old, In With The New
The old
Traditional bookkeeping once involved tedious, manual, data entry, stuck behind the computer. Transactions were typed in one digit at a time, and bank reconciliations typically only happened once the paper statement was received or downloaded from an online banking platform.
Paperwork needs to be filed and stored for seven years, and physical copies often go missing, making tasks labour intensive. Your bookkeeper typically does this job at set intervals of either weekly, monthly, or quarterly. Reports such as ‘Profit & Loss’ and ‘Balance Sheets’ are usually only available after these processing sessions.
Bookkeeping software required manual upgrades for every software update. Therefore, rates and tax tables were upgraded manually at the end of each financial year. Because data cannot be reopened by older versions of the software, this process was mandatory for all desktops, and was quite a struggle for old-school bookkeepers.
Data conversions and extractions were extremely strenuous, and often incurred a cost, commonly 25% of the average accounting bill. These were often due to, but not limited to:
- Opening files from different versions of the software
- Administrator passwords
- Outdated periods
The new
The contemporary method of bookkeeping commonly involves the remote access of financial information through supplier bill processing software. Documents are scanned via optical character recognition, making supplier names, invoice numbers, invoice dates, amounts, GSTs and currencies accessible in an instant.
Good riddance to the days of manual data entry, physical copies, and intense labour. All that is required now, is a quick check to ensure the software has extracted the correct information. With just a few clicks, the necessary data and a copy of the source document is exported into your cloud accounting software. No paper filing, and most importantly, no missing files. If a hard copy is needed, it can be downloaded and printed, and the original remains.
Modern day bookkeeping requires less labour and can be done daily in mere minutes. Data files are much more up to date, and any work is accessible from a remote cloud software. Financial reports such as Profit and Loss and Balance Sheets can be run more frequently, giving the business owner greater insight into their business performance.
Bank reconciliation can be done daily, as bank feeds update automatically. This saves the time of having to log into Internet banking to oversee any transactions.
Cloud software offers the flexibility of being able to access accounting software across any platform on any device with an internet browser. Invoices can be issued to clients immediately.
Software updates no longer exist, using cloud software is like using Gmail or Facebook –the software updates itself on cloud. Rates and tax tables that were once updated annually, now update themselves instantly.
In addition, Xero accounting software has enormous flexibility for add-ons. All of those solutions can be linked to Xero accounting software. Xero accounting software strives to maximise back-end efficiencies in bookkeeping and administrative overheads, specifically, Xero automatically eliminates any duplication and redundant data, leaving no margin for error.
Xero accounting software provides bookkeepers with premiere, cutting edge proprietary software and ensures the fastest entry and conversion of financial information. If you would like to switch to Xero, or have your existing Xero checked for efficiencies, please get in touch with us to discuss.