Going Paperless

There’s no question about it, computer systems are replacing the need to employ people, and making things happen so much faster in a business.

Just one example is creditors and the payment cycle.

In the old days, after purchasing something, you received the invoices in the mail, sorted them, and reconciled them to a statement. The invoice may have been processed into a creditors system, maybe by about the 10th of the month you had an idea of what your creditors balance was at the end of the month previously.

When it came time to pay it, you wrote a cheque, put it with a remittance advice into an envelope, wrote the name and address of your creditor on it. Then took them all to the post office. Your creditor had to open the envelope, record the receipt in their debtors system, write up a bank deposit slip and take it and the cheque to the bank to deposit.

Now, using an online system like Xero. Many invoices arrive by email. We then use a system called Receipt Bank. Basically, it can read an invoice/receipt and save you the need to process it by inputting all the details, even making an educated guess at what to code it to. You then go in, approve it and it posts it straight into your Xero accounts as a creditor.

When it comes time for payment, you create a batch in Xero, post it to your banking system telling it the date to pay, authorise it and it’s gone- straight from your bank account to theirs. Your creditor goes in the next morning and sees the amount received in the bank; it’s suggested that it’s from you for the invoices they sent. They tick OK and it’s all done. Your creditors balance is updated and their debtors balance is updated.

No writing cheques, no taking things to the bank or the post office, no paying staff to spend time doing this. And to top it off, your accounts are always up to date. You can see daily who owes you what and who you owe, and your bank account is reconciled daily.

These are examples of why businesses now only need to hire a part timer to do the bookkeeping, whereas before they would have to employ a person (or more) full time. What used to be take, say, twenty hours per week now takes about four.

If this is the case for your business and you think the bookkeeping is so much less than it used to be that it could be outsourced for a few hours a week, give our bookkeeping team a ring at our office to discuss if we can help you with this role.

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