SME owners’ time is precious and by making the most of the latest online accounting software, there are many benefits to be enjoyed by the business and personally, says Oliver Finch Menzies LLP. Streamlining processes and tapping in to real-time financial data can help to improve their profitability and position the business for growth. It’s time for SMEs to get out of the Dark Age.

Many small and medium-sized businesses are using systems that are completely out of date; relying on paper receipts and inputting financial data manually. This is eating into precious management time and making it harder for SME owners to make key business decisions.

For business owners looking to free up time and update their business accounting systems, here are five steps to follow:

  1. Review your financial and data management systems
Before putting in place a more efficient accounting system, a review of existing processes is needed. SME owners should consider how much time they are spending inputting or processing financial data, logging expense claims and guesstimating forecasts. This will highlight where efficiencies could be made.

Accurate and up-to-date financial information is essential when making business decisions and SME owners should not be relying on a set of monthly management accounts, which deliver data that is already out of date. Analysing financial data on an ongoing basis can open up opportunities and equip business owners to amend pricing strategies or protect cashflow.

Using information and systems, which are tailored to the needs of the business, can help the management team to become more agile; allowing them to intervene appropriately on a daily or even hourly basis, to take advantage of opportunities or address financial issues.

  1. One size doesn’t fit all
Businesses often have varying priorities and operate differently, depending on the needs of the markets they are serving. Some businesses prefer to draw down up-to-date sales data to inform managers on a daily or weekly basis; allowing them to make decisions about which products to push or highlighting where prices need to be adjusted. Other businesses, which are operating at low margins, may need access to accurate cashflow information on a daily or hourly basis.

By downloading compatible apps and integrating them into a bespoke system, businesses can create a solution that matches the needs of the business precisely.

  1. Implementation
New systems are quick and easy to implement, so businesses shouldn’t waste any time in getting set up. Despite this, scrapping old systems immediately could result in some information being lost. Allowing a couple of weeks to trial and refine the system, or to assess if apps and other add-ons are delivering the data you need, can lead to a smoother transition.
  1. Interpretation
There is no use having more information if business owners don’t know what to do with it. It is important to take the time to understand what the new data sets mean, and how the insights they deliver can help to improve efficiency and drive business value.

By removing the need to input and process large quantities of data, the new system will buy business leaders more time to focus on the activities that make the most difference to business performance. It also frees up trusted advisers to add value to the business in other ways.

  1. Focus on business objectives
Online business accounting systems can do more than just improve efficiency; they can also help to ensure that business decisions are aligned with strategic objectives. Business owners should consider how improved access to data can support business operations and assist its business plan.

Read the full report on ‘Improving business accounting systems for SME owners’ here.

Oliver Finch is associate director and head of outsourced services at Menzies LLP.