How cloud bookkeeping in Melbourne improves your cash flow

September 26, 2019

When clients come to us for bookkeeping in Melbourne, one of the first things that many of them ask us is what the most important part of their business finances is.

Is it the profit-loss statement? Expenses? Could it be the balance sheet?

While each of these are important, from a bookkeeper’s perspective, there’s one report that trumps all: cash flow.

Cash is the lifeblood of any business. As such, cash flow management is hands-down the most important part of bookkeeping.

Today, we’ll be explaining why that’s the case. What’s more, we’ll also explain how cloud bookkeeping holds the secret to better cash flow management!

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What makes cash flow such a big deal?

Why does cash matter? It’s simple: you can’t pay the bills any other way!

Say all of your customers pay on credit. You may be recording record revenue and profit.

The problem is that doesn’t translate to cash in the bank until the customer pays off what they owe. Until then, you’re left without anything to pay staff or keep the lights on.

Good cash flow management is essential, as it ensures you have enough money on-hand to cover your own obligations and expenses, while also giving you a buffer against emergencies or unexpected expenses.

Cash flow is determined by two factors:

  1. The amount of cash coming into your coffers (inflows)
  2. The amount of money you’re spending on expenses and capital (outflows)

It sounds pretty basic, admittedly. However, there are a surprising number of businesses out there who may be recording great sales, but still have major cash flow issues.

Bad cash flow management can sink even the largest businesses – remember the dramatic, cash flow driven collapse of OneTel?

Luckily, cloud bookkeeping can help small and medium businesses like yours keep on top of your cash flow.

Experience better cash flow with cloud bookkeeping

Live inflow and outflow monitoring

One of the hardest parts of cash flow management is keeping on top of your inflows.

Say you’ve just had a bumper crop, so to speak. This is good news – however, it can also make it hard to separate customers who’ve paid upfront with those paying on credit.

Not to mention, the extra work will also take away time you otherwise would have spent on your bookkeeping, making it even harder to keep on top of your cash inflows!

Struggling to sift through all your invoices?

Tired of making follow-ups via calls and emails chasing those who’ve paid on credit?

In addition to recording transactions, cloud bookkeeping platforms integrate with a wide range of systems and accounts, including your bank account.

The upshot? Real-time, live updates to your cash inflows and outflows.

You’ll be able to see each dollar that comes into your accounts, as well as every single expense, giving you real-time insight into how your overall cash flow.

Using this information, your cloud bookkeeping platform can generate on-demand cash flow reports and display your expenses in real-time. You’ll be able to adjust your spending and respond to cash flow problems before they turn into major issues.

Superior accuracy

Many business owners find themselves having to rush through their bookkeeping, just to avoid getting swamped by the amount of work on their hands.

In other cases, business owners may simply not be math whizzes.

There’s always going to be a certain degree of human error when bookkeeping is performed manually.

This can result in false alarms regarding cash flow, or worse, cash flow problems lying undetected:

  • Debts being misreported as received
  • Typos and other errors
  • Expenses being overlooked or left out

Since cloud bookkeeping platforms automatically receive and process data from your accounts and programs, it’s able to virtually eliminate human error.

This leads to more accurate cash flow reports and a healthier business.

Automated debt tracking

One of the biggest threats to good cash flow? Bad debts.

Say a debtor doesn’t pay on-time. That’s cash that you’re not receiving, which directly impacts your cash flow.

Alternatively, say a debt slips between the cracks, so to speak. You might simply forget that a certain customer is yet to pay, negatively impacting your cash inflows (and therefore, your cash flow).

Debt collection is one of the most challenging tasks a business owner can perform. Nobody wants to be known as an overbearing creditor.

Cloud bookkeeping makes debt collection easier with automated updates and reminders. This will remind debtors to pay, and can help improve your cash flow.

What’s more, it will also ensure that your accounts receivable aren’t forgotten about, or incorrectly classified as cash received.

Click here for more debt collection tips.

Not just cash flow – why bookkeeping services in Melbourne love cloud bookkeeping

Better collaboration

Take control of your financial data with easy accessible and real-time collaboration with your staff, financial advisor and bookkeeper in Melbourne.

Since cloud bookkeeping is web-based, all of you will be able to collaborate on your bookkeeping… without the need to travel to your bookkeeper’s office, or arrange a meeting.

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Massive time-savings

With all the automations that come with cloud bookkeeping platforms like Xero, MYOB and QuickBooks, you’ll never have to open a spreadsheet or whip out your pocket calculator ever again!

With all inflows and outflows recorded in real-time, you’ll be able to save hours that otherwise would have gone into your bookkeeping.

And that means more time to spend on your other responsibilities as a business owner!

Secured data back-up

Worried about your financial data and records being lost?

With traditional bookkeeping in Melbourne, a fried computer or a waterlogged filing cabinet can result in all your vital records (such as cash flow) being lost.

With cloud bookkeeping, all of your data is stored off-site on a secure server, with advanced security measures and multiple backups and redundant systems.

All of this ensures that your data is backed up and secure. What’s more, you’ll never have to worry about having to perform a manual backup!

Call Maximum Business Solutions for better bookkeeping in Melbourne

Take your bookkeeping to the cloud

Whether it’s a cash flow issue or any other issue with your business finances and record-keeping, cloud bookkeeping can be a huge help.

Be a smart cash flow manager. When it comes to bookkeeping in Melbourne, Maximum Business Solutions is the team to call.

We’re specialised in setting small and medium businesses up with advanced and innovative cloud bookkeeping solutions and platforms that eliminate the burden of bookkeeping.

Our team will also help with the transition to cloud bookkeeping, providing training and support until you’re confident with your new cloud bookkeeping system.

By the time we’re done, we promise you’ll never want to go back to the old way!

Need bookkeeping in Melbourne? Give our friendly bookkeepers a call on (03) 9589 0128, or click here to make a booking.