Managing ‘the books’ 2020-style

Lisa Martin, Executive Director of GoFi8ure, discusses all things accounting and bookkeeping, and shares some best practice management advice with business owners.

It’s 2020. A new decade has dawned. What better time to reflect on how far business accounting and bookkeeping has come since the turn of the century.

Who can remember a world without cloud accounting platforms? Imagine a world of printed bank statements and invoices, manual reconciliations, and no sign of digital bank feeds or automated accounting tools?

It’s all a distant memory for GoFi8ure’s Executive Director Lisa Martin (pictured) too. She has witnessed first-hand the rise of automation over her business accounting career – making life easier and providing more time for business owners.

She notes that there is still ongoing uncertainty for business owners to grapple with – such as retaining clients, hiring staff, ensuring that revenue targets are constantly met. Like a swan gliding serenely across a lake, there’s always plenty happening just beneath the surface.

In today’s highly automated environment, her best advice is to not let the speed of automation sacrifice attention to detail.

“For example, there’s no point in sending out an invoice super-fast if it’s not going to the person who pays it!”

Martin acknowledges that in 2020, although there is technology to help with just about every aspect of running a business, for newcomers there is still a degree of “figuring stuff out for yourself”.

Looking forward there are market pressures to keep both business owners and their accounting/bookkeeping Advisors on their toes – from increasing incidences of cybersecurity and ransomware to changes in accounting rules, as well as both local and global political, environmental, social and technology-based developments.

“Business Advisors can no longer hide behind email or just have transactional relationships with their clients. They must get in front of them to highlight any warning signs and help them prepare.”

“For Accountants and Bookkeepers to remain relevant in this new order, they must keep up to speed,” says Martin, “and reassure clients they’re up with the play.

“Relationships must move with the times,” she adds. “Business Advisors can no longer hide behind email or just have transactional relationships with their clients. They must get in front of them to highlight any warning signs and help them prepare.

Robots [or artificial intelligence] technology is on the rise, Lisa points out. If Accountants want to survive they must morph into true ‘advisors’.

“The pale, male, brown-cardigan Accountant still exists,” she says, “but they’re an endangered species.” And she’s not just referring to the increasing numbers of women entering the accounting and bookkeeping professions.

As for business owners, she admits that there is comfort in ‘business in usual’, “but if your business is not expanding, if you’re not stepping out of your comfort zone, then you’ll not be prepared for what lies ahead”.

Accountants vs Bookkeepers: a blurred boundary?

Times have changed across the accounting and bookkeeping professions. There are those who would say that the two professions have become increasingly blurred or intertwined in recent years. Capacity and capability requirements have changed for Bookkeepers, and there may be temptation for Bookkeepers [who abide by a code of ethics set down by the Institute of Certified NZ Bookkeepers] to take on tasks traditionally handled by accountants.

Business owners may ask them to handle additional tasks all in the interests of saving money.

Martin’s advice is simple – leave your tax returns and financial statements to the person with the required post-graduate qualification.

“It’s something you don’t want to get wrong, and we don’t want the accounting/bookkeeping profession brought into disrepute.”

She recommends business owners work with someone who has their credentials clearly on display.

Another issue related to “managing the books” is the perceived simplicity around filing Tax or GST returns online. Martin says organisations associated with the accounting and bookkeeping professions believe this is wrong. Not everyone can, or should, file their own return without ensuring that it is checked first.

“The cloud has brought those capacity and capability issues to the surface, and highlighted the blurring between the professions. But I’m also confident that over the next decade the line will become less blurred because people will become more aware of what they should and shouldn’t do.”

Working with your Bookkeeper

With the implementation of Anti-Money Laundering regulations in 2018, Accountants and Bookkeepers have had to be even more vigilant in managing clients’ books. The new regime is based around the requirement to “know your client”.

Therefore now there’s a necessity to know every nuance of how clients run their business, explains Martin, and accounting professionals will quickly know if something is out of the ordinary.

Similarly, business owners are becoming more knowledgeable about their enterprises, and she says Accountants and Bookkeepers like GoFi8ure encourage this by making everything on the books transparent. This allows business owners to know exactly where they stand regarding the business’s finances.

It’s important that business owners know exactly how things are tracking and whether their Bookkeeper is on top of everything, Martin adds.

“We’ve all heard the horror stories – particularly when business owners delegate too much authority to the person managing the books.”

Martin recommends business owners catch up with their Accountant/Bookkeeper/Advisor no less than once a month to discuss any important issues – around finances, goal-setting, upcoming legislation, tax planning, stock surpluses, and so on.

“Let them challenge you on a few things – to ensure you’re sticking to your goals.”

It’s also a great opportunity to bounce some ideas around, she adds.

“Above all, you have to stay in tune with your overall business finances.”

Payroll is another aspect of your business where there’s a need to seek regular professional advice – particularly in light of the confusion that still surrounds the Holidays Act.

“Remember, many Bookkeepers are now members of the New Zealand Payroll Practitioners Association,” says Martin. “So they have access to the answers.”

“Never second-guess payroll, because nothing is set-and-forget.”

Her final piece of advice for business owners is to aim for continuous improvement in all that you do.

“Do that little bit more to become extraordinary,” she says.

“To draw an analogy with working out at the gym – it’s all about exercising the most underdeveloped muscles first!”

For more information go to: http://www.gofi8ure.co.nz