I know it sounds like an oxymoron, right? When has accounting ever been entrepreneurial. If you are like me you have always associated accounting with a bunch of compliance work that you need to do that never really adds any value. If anything, it seems like a burden because it is always about the past and generally you see it as an expense.
Entrepreneurial accounting is all about how can we use technology to make our lives easier by saving time and money and also how we can focus more on the future rather than the past. It is about extrapolating present data to make decisions on how you should grow your business in the future.
Thankfully the technology industry has come to the accounting industry and started a wave of disruption. Unfortunately, the majority of the accounting industry has just gone “oh that looks nice” and then gone back to the way that they were doing things. If your bookkeeper or accountant is like that, it means you are missing out on amazing tools to help grow your business.
We believe the best cloud based accounting platform in the world is Xero. There are many reasons that we love it, but I want to talk about three in particular and how they help us provide exceptional entrepreneurial accounting to our members:
1. Designed for the cloud
Most of us young entrepreneurs would barely remember what it was like doing business before the cloud. Why is it that with the accounting industry we accept not operating in the cloud? We have worked with so many accountants that still require us to sign hardcopy documents, or worse, when they download data from our systems and then upload into theirs because they don’t know how to use cloud based systems. Cloud for us is all about collaboration. The entrepreneur and the bookkeeper (or accountant) should be able to look at the same data at the same time and have a conversation about it. A lot of people are using quickbooks online due to wanting a cloud based solution and previously using the desktop version. Remember it was not designed initially with the Cloud in mind so they are always going to be a step behind Xero in my eyes.
2. UI Built with the entrepreneur in mind not the accountant
For you to grow your business you need to know your numbers with the push of a button. Traditionally, it was bookkeepers and accountants who had control of your numbers. You would have to wait a considerable period of time after each month to reconcile your books and then they send you a report which you didn’t really understand anyway. With Xero, you get to log in to the system and, like any good technology, it is extremely intuitive and user friendly. You have a dashboard where you can look at key KPI’s, you can run any report that you need for any period of time. This means that as long as your bookkeeper is doing their job of keeping your books up to date daily you have all the data at your fingertips to make better decisions. You need to be using your numbers to help support or make all decisions and because Xero is a pleasure to use, you will be more likely to do this.
3. Open API – huge marketplace of add-ons
We like to call Xero the Apple of the accounting world because when you use Xero you, in effect, get your own iTunes App store. With over 500 add-ons (and growing rapidly) in the Xero marketplace, you can pretty much find everything you need to make your numbers management solution more efficient and valuable. We pick out the best add-ons in the marketplace to create software stacks for particular target markets that ensure that our members have everything they need to know their numbers and make better decisions with them. This ranges from dashboards, inventory management, point of sale, accounts receivable, accounts payable, the list goes on. This is where it gets very exciting as you now have amazing tools that you can use to help start forecasting the future. You can set up alerts that let you know when a KPI drops below a certain number so that you can make changes before it is too late. You can have a comprehensive cash flow forecast in real time which you will actually use.
If you are an entrepreneur and believe that you are running an entrepreneurial company I would like you to ask the question “is the way that I am managing my numbers entrepreneurial?” I am pretty confident 95% of you will say that it is not so maybe it is time that you have a look at the way your bookkeeper or accountant is managing things and demand more.
Article written by Finn Kelly