Xero App Partner Guest Blog, written by Troy Brown, Founder at XBert.
It’s been a few months since the world was thrown into crisis. Some businesses have collapsed and suffered, while others have adapted and transformed. One thing is true for all – business will never be the same.
Can businesses not only survive this crisis, but emerge stronger, more sustainable and better prepared for future challenges?
From my experience, quality data, efficient accounting workflows and ongoing collaboration between owners, bookkeepers and accountants are all essential for business survival. I learned this the hard way, in the wake of the global financial crisis (GFC), when my company went from $1million profit to $1million dollar loss. Now we’re faced with a more far-reaching and destructive crisis propelled by lockdowns and a global health pandemic.
While the GFC severely impacted my company, it was poor decisions (due to inaccurate financials), lack of communication with my advisors, and an employee committing expense fraud that ultimately forced me to close the doors. The silver lining – it motivated me to develop XBert, software dedicated to helping business owners and their advisors make the right decisions through quality data.
While these issues can happen, even in good times, it’s more important than ever that business owners and advisors have accurate data to make the right decisions.
The importance of data integrity and visibility
As the foundation for financial information, data is sacred. It needs to be up-to-date and correct to provide accurate insights into cash flow and to identify any anomalies or issues – before they escalate into bigger problems.
In my previous business, I continued operating and kept staff on I couldn’t afford based on bloated cash reports from unreconciled transactions and bookkeeping mistakes, like duplicate invoices. This lack of oversight also meant it was too late when I finally discovered my colleague was claiming illegitimate personal expenses that they couldn’t repay.
To have a clear picture of business health you need to assess information from many sources. You also need to know the status of records and bookkeeping tasks at any time.
Without the right tools, this can be time consuming and error prone. Audits and manual checks can take hours, and human error can lead to issues being missed. This can include duplicate bills, increased debtor days or incorrect account coding, to name a few.
This is where arming yourself with the right technology can simplify the process and ensure accuracy. For example, XBert uses machine learning and AI, that integrates with Xero to analyse your accounting data hourly (like invoices, bank statements and transactions and payments), to automatically detect patterns, anomalies, and errors in accounting data.
The importance of collaboration – especially with advisors
Our research shows approximately 70 percent of XBert customers reconcile their books themselves, involving an advisor only at lodgement time. Inexperience can lead to errors that are time-consuming for advisors to find and fix, costing business owners more money.
Advisors are not only experts in tax preparation and compliance. They can also help analyse and interpret trends, provide holistic approaches to financial management and develop growth strategies. I advise you to seek their guidance and do it early.
If I had, I may have saved my company. The numbers didn’t add up and trying to understand the reports from my finance team took too long. There was an endless back and forth of questions and corrections. I should have asked skilled advisors to step in.
Anxious clients are inundating advisors needing support to navigate the current crisis, rapid changes and various stimulus schemes. They will continue to support businesses during the recovery following the global pandemic
Whether you’re a business owner or advisor, you must continue to connect with your team, customers and clients from wherever you are. You need to know what’s happening now and what has to happen next.
What will be our new normal? Who knows? The business landscape has changed forever, but we’re a resilient bunch. We’ll continue to evolve, innovate and reinvent business. However, before you leap, make sure you understand your business. This includes having the latest financial information and be confident in the numbers.
XBert is available to Xero customers in Australia on Xero’s app marketplace. Customers in other regions can also access the full process automation, workflow management and collaboration features plus all non-tax alerts. We’re working on international tax integrations, which will be ready soon.
XBert helps accountants, bookkeepers and business owners collaborate, eliminate inefficiencies, ensure data integrity and make smarter decisions with AI audit and process automation. XBert performs manual bookkeeping checks. It analyses your Xero data routinely and monitors business information databases to detect anomalies, errors and patterns. We help to streamline workflows with powerful process management and collaboration features. We also help improve compliance and save money with business risk alerts.
The post Why accurate data and collaboration between business owners and advisors is essential for business survival appeared first on Xero Blog.