Home – New Forums Money matters Do You Use Accounting Software?

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  • #999136
    Tact
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    Hi All,

    I just had a consult with an established business ($300K+ revenue) whose records were in an absolute shambles. It appears their previous tax agents had been doing estimates on all lodgements and simply making up numbers. To put it gently, the business was not doing well.

    I suggested that we set them up with some software and was met with a suspicious “we’ve been running businesses for 20 years and none of our other accountants had any ‘software'”.

    My question is, is there anyone on here who has a successfully scaled business and still uses pen, paper, calculator and a shoebox full of receipts? Is it because of privacy…simplicity…habit?

    #1217977
    meraki
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    Lol, did you kindly point out to them that their records were in shambles due to the paper and pen system? And that they could save money on fees? :)

    I haven’t had a client who didn’t want to use an online software system once the benefits were rolled out to them – mainly the cost they would save on bookeeping and accounting fees.

    #1217978
    arrowwise
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    It continues to amaze me just how many businesses are using very primitive (or lack of any modern day IT / accounting systems), but in their words are very profitable and successful operations.

    I ordered a roller blind from a company the other week. They claim to be in business for over 30 years. Email bounced when I sent the order. Had to order via SMS. Banking details given by SMS. Some other person texts me to choose from colour chart. The shocking service continues and delivery runs late but in order. I am still waiting on my Tax Invoice with multiple follow ups.

    I’m not sure how these operations will sit in the next 20 or 30 years, however their old way of operating seems to work despite many of us in the more modern world not understanding how.

    I am sure we all know plenty of businesses operating in a similar manner.

    #1217979
    bb1
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    Just because some business’s are still doing thing with an abacus, shoebox and other primitive methods, it doesn’t mean they cant be efficient and still workable.

    I know a couple of business’s who are using software, but because of their own or their book keepers incompetence, they are in a shambles.

    It’s not the tools that we use, its how we implement and use those tools.

    #1217980
    Tact
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    arrowwise, post: 262895, member: 54026 wrote:
    I’m not sure how these operations will sit in the next 20 or 30 years, however their old way of operating seems to work despite many of us in the more modern world not understanding how.

    In the last 10 years, IT has completely revolutionised the market. I have two clients in the construction space. One uses engineering software to quote jobs and churns out quotes while the other still goes old school. Exact same industry, completely different time allocations and profit margins.

    Just because it works, doesn’t mean your competition aren’t doing it better.

    #1217981
    El Arish Tropical Exotics
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    I’m not a high tech person, I rarely use a cellphone and have no My Gov account because there seems to be SMSing involved. I loathe that the government is forcing me into using a thing I’ll probably charge once every six months (and probably miss my messages from them) but there is no way around it.
    Same with the ATO. Honestly, I’m not sure how you could even swing it if you employ someone. The way super is paid has totally changed and has to go through a provider and starting in 2018-19 you need to lodge employee earnings every “pay event” (currently only companies with over 20 employees have to do it) via software. If you are a micro employer you’ll be able to do it quaterly Having said that I love Quickbooks, it makes my life so much easier. I was sold on it way before the forced migration that is on it’s way. Here’s a link to the ATO changes.

    #1217982
    Tact
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    I have a feeling that small businesses will be even slower to hire new staff now that there’s another layer of paperwork and potential penalties if you do it wrong. I eat tax returns and poop contracts and even I think it’s a bit much.

    #1217983
    bb1
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    Tact, post: 262906, member: 79642 wrote:
    I have a feeling that small businesses will be even slower to hire new staff now that there’s another layer of paperwork and potential penalties if you do it wrong. I eat tax returns and poop contracts and even I think it’s a bit much.

    Business has bought these changes onto themselves by ripping of their workers.

    #1217984
    El Arish Tropical Exotics
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    bb1, post: 262907, member: 53375 wrote:
    Business has bought these changes onto themselves by ripping of their workers.

    I agree, it’ll be impossible to make it up as you go along or screw anyone out of super. A downside will be a growth in $$$ in hand and possibly dodgy “contract” work.

    #1217985
    Greg_M
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    El Arish Tropical Exotics, post: 262909, member: 6734 wrote:
    I agree, it’ll be impossible to make it up as you go along or screw anyone out of super. A downside will be a growth in $$$ in hand and possibly dodgy “contract” work.

    ^
    This

    In the end dodgy contract work will win.

    It’s simple, the overhead of employing someone legitimately makes it almost impossible to do in most industries/sectors.

    In construction it now costs around $80 per hr to put an idiot inside the gate. That’s without site allowances and allowing almost nothing for administration and fixed overhead.

    The reporting requirements to all the different authorities are many, and most have onerous penalties for slow reporting and payment. Often payment is required in 14 days …in an industry where standard payment is 45 to 60 days, often not at all…the result is a cash flow nightmare.

    I don’t agree it’s always about bosses ripping off workers, a lot of it is about bureaucrats justifying their existence and salaries.

    e.g. an associate had 4 workers on “contract” paying them $45 to $60 per hr plus super, plus work cover. He was also providing 4 star accommodation and living away costs (project was about 1.5 hours travel from home). It was on average about 50 to 60 hrs per 5.5 day week.

    Not a bad earner imo for some young blokes looking for a chance.

    A random audit by Fairwork Australia decided he was in breach of an Enterprise Bargaining Agreement (the project was not an EBA required site)…the upshot was a $30K fine.

    Do you think any of them still have a job?

    Maybe in some sectors you can still get by with paper ledgers and being a good bloke paying the award, but I think your days are numbered.

    #1217986
    James Millar
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    Tact, post: 262890, member: 79642 wrote:
    Hi All,

    I just had a consult with an established business ($300K+ revenue) whose records were in an absolute shambles. It appears their previous tax agents had been doing estimates on all lodgements and simply making up numbers. To put it gently, the business was not doing well.

    I suggested that we set them up with some software and was met with a suspicious “we’ve been running businesses for 20 years and none of our other accountants had any ‘software'”.

    My question is, is there anyone on here who has a successfully scaled business and still uses pen, paper, calculator and a shoebox full of receipts? Is it because of privacy…simplicity…habit?

    The premise of scaling a business inherently involves the efficient use of scarce resources. I suggest that anyone claiming to be committed to scaling but that is also resistant (not cautious) to new technology is completely misguided.

    In saying that, I know the type you have described and I’m almost certain that they are not committed to the development of their business. My guess is that they have reached a point in their life where they don’t have great aspirations to develop the business. 20 years, several businesses, several accountants and $300k turnover – that is a lot of jumping around. They may have achieved their goals which is of course completely fine but they are unlikely to develop much if operating in a competitive market with that mindset. And how many accountants are there that don’t advocate the use of software?

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
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