Introduction to financial technology
When developing your business idea, or growing it to another level, it’s worth spending time learning and understanding what technology is available for the financial side of your business.
You can save time, money and better grow your business if you work out what your business needs, find technology to match and, importantly, make sure that all the software integrates.
The myriad of available technologies can be overwhelming.
Rob Phillips, Director of Innovation and Impact at CCIWA says you need to make sure that your financial products integrate with your Human Resources (HR) product, Customer Relations Management (CRM) system and whatever else you’ll use.
He believes the CRM is the foundation of your business because the information coming into that helps you to make money. His advice is to work out your CRM first, and then identify your preferred accounting program first based on compatibility.
Simon Chesson, accountant and business manager with AustAsia says choosing the right accounting system leads to less mistakes in data entry and creates better use of your labour.
“With the data entry you can have human error and then you’ve got to go back to rework everything. We were doing some work for a client with 12 staff, we put in a system and they told me they’ve now saved three days a month just on data entry just by having the electronic feeds. There’s just a lot of time saving,” he says.
In his opinion, the accounting package is the centrepiece of the technology stack and some of them have basic CRMs too.
He says some smaller businesses, or those with two or three big customers on the scale of Rio Tinto or a BHP don’t really need a CRM because their business is built on relationships.
“But a tradie or someone who runs a kids’ sporting academy for example, needs a robust CRM or an accounting system with a CRM to do invoicing as they go.”
Many businesses need an accounting system that can handle electronic payments, such as bulk payment to suppliers or employees.
Of the various accounting packages available, the three most popular are Xero, MYOB and Quickbooks. Then you can get apps to “bolt-on” or lay over the top to further enhance functionality.
In terms of cost, virtually everybody in this space has moved to a monthly subscription. Xero starts from $20 a month to couple of hundred dollars a month depending on what bolt-ons you add. MYOB Live is similar, about $20 to $150 and Quickbooks minimum is about $15 a month.
You can research each package online. Alternatively, some accountants look at your business, work out the best financial technology for you and can help advise and implement your total business technology stack.
“A lot of the design comes back to the type of business,” advises Chesson. “If you’ve got a business running contracts like a builder or a mining company, there’s generally things like progress claims.
“You’ve got to make sure that your accounting system ties in to how you’re running that project. That’s different again to a retail business needs to know how much stock it has on the shelf? So, a lot of this comes around to understanding what the business does and finding a solution that plugs in to that. You can get a lot of apps to help.”