Many small and medium-size companies do a large part of the financial accounting tasks on paper and manually. That costs time and money. Accounting and Bookkeeping provides a remedy. What makes it so attractive for borrowers, clients and suppliers and how it optimizes accounting processes.
From the e-balance sheet to the e-bill: Legal requirements and electronic procedures help ensure that Accounting and Bookkeeping Services in Australia becoming more and more popular in medium-size companies. The financial administration in particular is driving change in order to facilitate tax collection and reduce bureaucracy. One example of this is the e-balance sheet introduce in 2013 . In order to meet their specifications, the companies first had to retrofit technical equipment. The procedure is now consider establish and, thanks to automate processes, reduces the administrative effort for everyone involved. The scope of the e-balance sheet is continuously being expanded. Since the 2017 financial year, companies had to electronically submit the asset schedule with their annual tax accounts .
Ease of work for borrowers: digital financial report
But the private sector is also relying on electronic processes: the digital financial report start in April 2018 . This is a procedure use by the Australian banking industry for the direct electronic transmission of balance sheets and income-surplus invoices to banks and savings banks as part of the credit check.
The credit institutions are legally obliged to analyze the economic situation of their corporate customers and to have their financial statements presented to them. So far, companies that have applies for a loan have mostly submit their closing data in print form or in images (e.g. as a PDF file). The banks and savings banks record them manually and process them with the institute’s own analysis systems.
The digital financial report reduces the time require and the process costs for reporting companies (borrowers). In addition, there is no longer any error-prone media discontinuity that has so far often led to queries from the bank. The credit process has accelerate significantly.
With regard to the scope of the report and the depth of information, nothing has change as a result of the introduction of the electronic procedure. In addition, the digital financial report takes into account banking secrecy and data protection requirements. The reporting company decides for itself who receives its data, when and to what extent.
Another good news for credit customers: The digital financial report is base on the XBRL taxonomy, which is already use in the e-balance sheet. Since all accounting companies in Australia should now be equip to present their annual financial statements in XBRL format, the electronic procedure does not entail any new technical and organizational requirements. Accounting and Bookkeeping does not have to mean constantly new investments in technology – once the appropriate infrastructure is in place.
The heart of Accounting and Bookkeeping: the e-bill
Directive 204/55 / EU of the European Parliament and of the Council obliged all contracting authorities in Europe-wide procurement procedures to receive and process invoices electronically. With the invoice standard EN 16931-1: 2017, the European standardization body (CEN) has developed a European core format for electronic invoices.
The European requirements should be implement step by step in Australia by November 2020 at federal, state and local level. Since November 27, 2020, all billers (suppliers) have been obliged to issue electronic invoices to public clients of the federal government.
With the Tax Simplification Act 2011 , the Australia legislator had already remove obstacles to the electronic exchange of invoices. Among other things, the signature requirement has been abolish. In addition, paper invoices and electronic invoices have been treat the same under VAT law since then.
With the E-Invoicing Act of April 4, 2017 , Australia transpose Directive 2014/55 / EU into national law. In addition, an e-invoicing ordinance was pass in October 2017 , which regulates the implementation. In contrast to the EU directive, this regulation expressly obliges companies (billers) to send their invoices to public clients electronically. There are only a few exceptions to this – for example for invoices with an amount of up to 1,000 euros.
Practical advantages of Accounting and Bookkeeping for small and medium-size companies
Small and medium-size companies usually do not yet fully benefit from the advantages of Accounting and Bookkeeping. Not because the finance department doesn’t know what it is doing, but because it sticks to the establish manual and paper-base processes out of habit.
The following three areas offer plenty of potential for saving time and reducing costs through the target digitization of work processes in financial accounting.
Accounting and Bookkeeping # 1: Using a DMS to optimize the handling of documents
Let’s look at document management: In many accounting departments of medium-size companies, employees lose time and energy because they have to laboriously search for invoices, delivery notes, contracts and other documents in files and piles of paper. This applies to day-to-day business, but also to special situations such as an audit. Here it often means a lot of work for the accounting department if the auditor only wants to see all the invoices from the previous year. Then it is time to turn around the files and hope that all documents are file in the designate place.
A document management system (DMS) significantly accelerates access to information. With the help of a DMS, the accounting department can compile all relevant information with a simple query and forward it to the auditor or management.
A DMS is more than just an electronic archive – it also improves the handling of business documents:
- The software categorizes the documents from financial accounting that are require to be retain according to user specifications and automatically saves them digitally.
- Protocol and security mechanisms help you to meet the requirements of the Numbers pro for audit-proof archiving.
- In addition, the digital workflow makes work easier for everyone involve in cross-departmental processes such as the approval of invoices.
Accounting and Bookkeeping# 2: improve asset accounting with integrated software
Another area with work processes in need of improvement is often asset accounting. Many small and medium-size companies record and manage their fix assets manually using an office program. This is prone to errors and time-consuming. The solution: use an asset accounting integrated into the financial accounting software. You can then manage the assets directly in accounting without having to open a separate program. You can have depreciation calculate automatically and post with cost centres or cost objects.
integrated software for asset accounting. You have access to all inventory data on the depreciable assets at all times and you can create up-to-date evaluations.
Integrated asset accounting also enables to digitally transmit the asset overview together with the e-balance sheet to the tax office. The system transfers the commercial balance sheet values store in financial accounting to the data schema of the e-balance sheet. It automatically pre-fills the valuable positions in the schedule of assets. This saves the accounting staff time and prevents data entry errors.
Accounting and Bookkeeping # 3: automate recurring bookings
The third area where a digital solution can save you time and reduce the error rate is recurring bookings. These include, for example, rents, leasing instalments and premium payments. Entering such regular booking cases anew every time is bothersome and inefficient. The accounting staff not only lose working time as a result. They also risk incorrect entries, which lead to additional work. By using appropriate financial accounting software can that be avoid. Similar or identical postings (“recurring postings”) are create once in closing groups and document folders. A placeholder for the retrieval date can be store for each recurring booking. In addition, a short description and a note can be enter for each call group. Thanks to such functions, employees keep an overview and gain time for more productive tasks in the area of financial accounting.