November 2016 – McAdam Siemon

They say only two things are certain in life: death and taxes. For a lot of people, there’s also a third certainty in life: the pain of keeping track of every receipt when it’s time to do the taxes.

How many times has your bookkeeper asked you for a receipt (that you swore you stuffed somewhere in the wad of receipts in your wallet) that you’ve then had to scramble and search everywhere to find?

You think to yourself: “I’ve got better things to do than this,” and you’re right. It’s a waste of your precious time that you could otherwise be investing in the growth of your business or maybe even going on a shopping spree and filling your wallet with a fresh wad of receipts!

Thankfully there are now some pretty cool apps out there that can take the pain out of tracking your receipts. Read on to see a list of the top four apps below.

Traditional bookkeeping is dead. Live bank feeds killed it.

Keeping on top of the books is hard. But what’s even harder is making good business decisions without real-time and accurate financials. If you want real-time financials, you need a real-time (cloud-based) accounting package like Xero, or MYOB Online.

The hallmark of cloud accounting is the live ‘bank feed’ functionality, where your bank transactions are automatically imported daily, which eliminates the majority of the tedious data entry associated with traditional bookkeeping.

This not only saves time and labour cost, it also allows you to have accurate numbers on your business – especially when you get into the habit of matching your bank transactions to your bills and invoices on a regular basis and asking us for support when you need it.

Automatic vs Automagic

We need to be realistic about the efficiency gains of using the cloud. Although your bank transactions are automatically imported into Xero, for example, your financial data can still be inaccurate because of two reasons:

Not matched: Errors in matching your bank transactions correctly to bills, invoices etc. The other thing to make sure of is the applicability of tax/GST. Making a systematic error with your account and/or tax/GST coding can quickly throw your financials out of whack. Not sure if money you’ve invested should be revenue or a loan? What about tax, is that an expense or a liability? Learning the basics goes a long way. Take the time to watch self-help videos online or ask your accountant for help if you’re unsure.
Not documented: Not having the supporting documentation for your expenses – by law you are required to keep proper written evidence for business expenses that are deducted from your taxable profit. This will save you from getting pushed around by the tax man if you’re ever randomly selected for an audit.

Ideally, you want your scanned receipts to ‘live’ in your accounting software so all your information is in one place. But isn’t it incredibly time-consuming to scan each individual receipt and then attach it to the respective transaction?

Thankfully not.

Receipt-keeping add-on apps such as Receipt Bank or Shoeboxed can help by ‘automagically’ pushing your receipts from their software into Xero.

Bookkeeping on cruise control

If you’ve ever been on a long road trip, you know how helpful it is to switch on cruise control so you can worry less about maintaining the right speed and focus more on steering. Using a receipt-keeping app is the cruise control of your accounting toolbox!

The core benefit of using a receipt-keeping app (there will be slight differences in your workflow depending on which add-on you choose) is that you’re able to ditch the scanner and forget about manually dragging and dropping your receipts in your accounting software.

The top two reasons for using a receipt-keeping add-on are:

Your receipts are read by an intelligent machine (and often double-checked by a human) and the information is recognised via optical character recognition (OCR). This means you have to enter a lot less of the data in your receipts (i.e. date, amount, tax etc.)
The receipt-keeping add-on is able to learn ‘rules of thumb’ for allocating your expenses to their corresponding expenses categories. For example, you can teach the app to allocate every digital receipt for Google to your computer expenses account category.

Here a four popular apps for you to consider integrating with your accounting software:

Shoeboxed: Their name is inspired by the good ‘ol days when you would cram your mountain of receipts in a shoe box and hand it over to your accountant to worry about (and probably delegate the data entry to the junior). Instead, you send your receipts via Shoeboxed’s ‘magic envelope’ and they process and verify all your receipts and get them ready for you to push to your accounting software. You also have the added option of using the smartphone app to take a snap of your paper receipts or email your receipts to your Shoeboxed digital inbox.
Receipt Bank: This is a user-friendly alternative that has the same functionality as Shoeboxed (except there is an extra charge if you decide to use the postal option). Another handy option is using the Dropbox integration that automatically synchronises with Receipt Bank which means you retain ownership of your data if you ever decide to stop using the service.
Entryless: A ‘no-frills’ low cost alternative to Receipt Bank and Shoeboxed that allows you to email your receipts to your digital receipts inbox.
Expensify: This app will help you keep track of your receipts, but it’s geared towards viewing and approving your employees’ submitted expense claims. Expensify also allows you to track billable time.

If you’re falling asleep behind the bookkeeping wheel because of boring manual data entry, it’s time we had a chat about how paperless receipt-keeping solution can shift you into cruise control.

Get in touch to make a time for us to have a chat about your receipt handling systems. If we do it over a coffee, it’ll be our shout. (And we’ll scan the receipt!)

The principles behind winning in business and winning in sport are similar in many ways.

Take tennis, for example. If you’ve ever watched a match on television, you’ll know that along with all the hitting, running and grunting there are a lot of numbers involved.

And we’re not just talking about the score here. Each player’s performance can be measured in other ways—percentage of first serves in, points won at the net, number of unforced errors on forehand versus backhand, and so on.

But while the statisticians may love all those details, everyone else is just interested in the score, right?

You might not be interested. But the players certainly are.

Admittedly they may not know the percentages down to the decimal place. But they’ll know if they’re making too many mistakes at the net or wasting their first serves. And they’ll change their game accordingly—by staying at the baseline or slowing down their first serves a bit—to fix the problem.

Yes, the score is important. After all, the players obviously want to win. But the only way the players can actually change their winning percentage is to change how they play.

And it’s the same when you’re a business owner. You business may actually have several scores—number of sales, profit made, etc. But while they’re a great way to keep track of how your business is doing, you can’t do much about them once they’re available.

They are—quite literally—history.

They’re what we call “lag indicators” (or sometimes “results KPIs”). And apart from putting them in your reports and sharing them with your stakeholders, there’s not much else you can do with them. They’re done.

What you should be more interested in are the things you can change. These are what we call “lead indicators” (or sometimes “activity KPIs”), and can lead to improved results for your lag indicators (your score).

For example, if you want to increase the number of sales your business makes, you might want to measure things such as:

Your website traffic
Your website’s conversion of visitors to buyers or email opt-ins
The size of your marketing database of contacts
Email campaign open rates and click-through rates
How many sales telephone calls you make each week
How many sales meetings you have each week
Your conversion rate of enquiries to quotes/proposals or sales (depending on your business model)

And for profits, you might want to measure:

How much it costs you in materials to produce each unit (or service)
How much time and labour cost it takes to produce each unit (or service)
How many units are being returned by the customer, and so on.

Once you know what your lead indicators are, you can tweak them to see how much they affect your lag indicators.

For example… Improve your site’s SEO to improve website traffic. Increase the number of sales calls you make each month. Give your existing customers an incentive to tell their friends about your business. Look for efficiencies in your production line so you can produce your items more quickly.

The beauty of focusing on your lead indicators is that when you improve them, then your lag indicators—the scoreboard—will improve as a natural flow-on effect.

And lead indicators are things you can control this month. This week. Today. With measurement of your performance in these areas you can refine your activities and feel a greater sense of control in ‘improving the scoreboard’.

Lead and lag indicators are both vital measures of how your business is doing. But by looking after the lead indicators you’ll be keeping your eye on the ball when it really matters, rather than looking at the scoreboard of what has already happened.

Ask yourself, what lead indicators are you focusing on improving this month? How are you looking at that data? Do you have real-time dashboards and weekly or even daily reports on these lead indicators?

If not, we should talk. We can set up lead indicator tracking for you which is the surest way we know to improve your business’ scoreboard.

Month: November 2016

Business Owners: How to Eliminate the Administrivia of Saving and Filing Receipts

How to Win in the Game of Business: Lead vs Lag Indicators