1) Embrace Receipt Reader Software
What is Receipt Reader Software?
There are various receipt reader software products that attach themselves to your accounting software. Your accounting software being products like Xero, QuickBooks, and MYOB – the three most popular ones in Australia, and there are others. For example, Xero has a piece of receipt reader software called Hubdoc. There are other types of receipt reader software like Dext, and Easyscan , and there’s a whole range of different ones.
Basically, how receipt reader software works is you either take a picture of an invoice or receipt, or you can email the software a copy of a PDF, invoice, or receipt, and it will open that document, read the data from the document, and then populate fields that match up to your accounting software. It can even be auto-published directly into your accounting software.
There are a lot of people out there who are still manually typing purchases, into accounting software. Or they might be uploading a picture, but they’re still filling out the fields, whereas this software is AI technology that will read the fields and populate all the parts of the accounting software that are needed, like GST coding amounts and supplier name. It will even look at bank statements and match it to bank statements. Yet there are a lot of businesses still out there that are not taking advantage of that software, which has been available for many years now.
What’s The Biggest Advantage Of Receipt Reader Software?
The biggest advantage of using receipt reader software is time. We will regularly meet with a client and find out that they’re spending about five hours a week working on their accounts payable (aka Supplier invoices). And most of those five hours will be spent actually keying the data into the accounting software. In a lot of cases, the processing time can be halved.
That’s an average of 2.5 hours saved every week or 10.75 hours each month. You can get into this software for as little as $30 a month, with the typical cost of paying someone to manage your accounts internally sitting around the $35 an hour mark, and most bookkeepers are charging somewhere between $50 and $70 an hour. So if you’re paying an accounts person or bookkeeper to do this work, and it can be done in 40% less time, then all of a sudden, it’s a very, very viable option.
2) Ensure All Users Are Using Two Factor Authentication
What Is Two Factor Authentication?
Two-factor authentication is a mandatory thing for accounting software, and it’s becoming mandatory on most other platforms that people are using. A lot of CRM systems, job tracker systems, and timesheet systems, these sorts of systems are all moving to compulsory two-factor authentication.
Basically, what it means is that you don’t just have a login or password; you have an actual separate authenticator app, which you type a code into. And that way, you ensure that only the people who should be getting in, can access it. It’s a lot harder to get hacked when using two-factor authentication. There are still a lot of businesses out there not using two-factor authentication on things like their bank accounts, things like their job system software. And there’s some older style accounting software that still doesn’t have two-factor authentication on it. So it’s really important to set that up and know that your data is secure.
The Consequences Of Not Having Two Factor Authentication
We know examples of people that have gone into people’s accounting software and put a different bank account onto their sales invoices. Customers are paying the invoices but the money is being deposited to the new bank details.
3) Never Trust Emails Or Texts Relating To A Change Of Bank Account Details
Always Verify A Change In Bank Details
People may have received an email from a supplier saying, ‘please note, our bank account details have changed’. A lot of the time, they are legitimate emails. However, unfortunately, there are scammers out there who prey on the fact that people will trust that they’re receiving an email from the actual source.
Get In Touch With Your Original Point Of Contact Within The Business
As the accounts department for some businesses, our policy is that if we ever get advised by anybody from the business that there’s been a change of bank account details, we go back to the person, the source of the business. So if it was the sales manager who engaged the supplier in the first place, then we go back to the sales manager. If it was the CEO or the owner, we go back to that person. We’d go back and find the phone number that we have on file for that particular person, and that’s the person we contact directly. And we say we’ve been advised to change your bank account details. Can you please confirm your bank account details?
We even came across a scammer once that had not only changed the bank account details but they changed the phone number on the sales invoice to their phone number. So people were ringing up to even verify the bank account details, and they were getting the scammer, and the scammer was verifying their own details.
These are the sorts of things that are happening. Thankfully, they’re not happening that regularly. But, in a way, it’s because they’re not happening that regularly that people aren’t hearing about this stuff. So people should be picking up the phone directly to their contact at the supplier and asking them directly to just confirm their bank account details. And that’s a process that we undertake, and we educate other accounts teams to undertake. Just extra security.
4) Review Access & Delete Old Staff
Remove Subcontractor Access As Soon As Their Contract Ends
It is just amazing how many times we will come on board as the new bookkeeper for a client, and not only do they have the old bookkeeper still on the file, which might be fair enough in a changeover period, but they’ve also got staff that are no longer with the business. They may have changed accountants, yet they’ve still got the old accounting firm on there. So people aren’t creating a process when staff or subcontractors leave where they go through and actually remove people from their systems.
User Access Control Technology
There are products such as Gatekeeper available to simplify the process where staff and subcontractors don’t actually have to have logins and passwords; they just get access to a system. What happens is that the person gets a log on to the Gatekeeper system, and then they get access to the different portals that they need access to for their work. But then when that person leaves, we’ve just got to remove one access, and they’re automatically removed from all the other portals that they might have had access to.
Over the years, you would inadvertently give staff banking log-ons, you would give them your Telstra log-on, you would give them a log-on to the WorkCover system, the ATO, accounting software, you name it. So having the ability just to be able to shut them off from that in one step is very attractive.
With Gatekeeper, the end-users don’t actually have to know the passwords. They just get access to a system that allows them to log into that portal, and the password automatically populates in, so they don’t even have to know it, which is obviously a lot safer for the business.
The Dangers Of Neglecting User Access
We’ve been aware of a situation with a client where, unfortunately, the business owner passed away, and they didn’t have a system in place. So one particular staff member managed to extract about $30,000 over about a six-month period out of the business’s bank account, putting it in as some sort of expense. Just through that lack of system, and they would have kept getting away with it. It was only that one of our staff actually started to demand receipts for some of the stuff, which led to exposing the fact that they were just defrauding the business.
5) Send Out Invoices Quickly And Chase Them Up
We are constantly amazed at the number of businesses that don’t finish work and actually get their invoices out to the clients straightaway. In one case, I had a plumber who came on board with us, and he had work that was two and a half months old that had been completed, and no invoice was sent out at that point, which is just ridiculous. So he had about $60,000 worth of invoices that he hadn’t actually sent out for work that had been completed. It’s amazing how these businesses still have cash flow.
Again, it just comes down to systems and processes. You have to have a system so that as soon as a job is finalised, then an invoice goes out.
Chase Up Invoices Often & In Multiple Ways
The next stage of that is to ensure that you’re following up and chasing up, and it doesn’t have to be anything aggressive. In fact, one of the tips that we give to all our clients is to get someone other than yourself or other than the person that’s delivered the product, which could be an accounts payable person within the business, but someone a little bit independent. It could be the bookkeeper, or you could outsource it altogether.
Have someone reasonably independent contact the client and just say, ‘Hi, just calling from [business name], we sent you an invoice. I just wanted to double-check that you’ve got that invoice’. When they confirm one way or the other, we say, ‘and when can we expect payment on that?’. When they tell you what date they think they’re going to pay you, you then follow them up the day after that, and you, again, just friendly, remind them. If you do that, if you ask those two questions, I guarantee you will get a much better result with the collection of monies from people.
Document Every Email & Call
The important thing is that you document each time that you make contact with somebody. So you would have sent them an email, you would have picked up the phone, had that friendly conversation, you sent them a reminder email, you would have picked up the phone again and had a friendly conversation, and you document those times.
Then if people make a decision that they’re not going to pay you, and then they pull out other reasons for why they’re not going to pay you, you’ve got documented evidence of all prior communication. This makes it so much easier if you do have to escalate it beyond you to go down a legal path to recoup that money. Lawyers love that level of detail.
That documentation of evidence shows that you’ve done the right thing, you’ve sent the invoice out, you followed up, you’ve documented when you’ve done that. That makes it a very easy process for someone like a debt collection lawyer to manage. The good thing about doing it this way is that you actually avoid debt collection lawyers much more often because you end up recovering 95% of everything that you need. So you’re not dealing with overdue invoices that haven’t been paid.
If you can’t do that with every single invoice, it’s very important to do it for your larger invoices or the invoices beyond a certain amount to make sure they’re paid on time and to keep the cash flow on track.
Chasing money does not need to be an exhaustive exercise. Most of these phone calls are five-minute phone calls. You’re not going to be on the phone for too long with these people. It actually can be chased up very economically, very professionally, and very friendly.
I thoroughly recommend that people put a process in place that just chases people up. As I alluded to earlier, one of the biggest stumbling blocks for owners of businesses is that they’re chasing their own money, and they’re emotionally involved in the product delivery. It’s much better to have someone completely unemotionally involved in the process to do the chasing of the money.
My name is Gary Somerville. Our business, BAAS Bookkeeping, is a full-service bookkeeping and accounts support business. We can be your whole accounts department, or we can also just take on a piece of your accounting or finance work. We specialise in BAS lodgements, collecting monies from your clients, regular financial reporting, Payroll, and Accounting Software Training. We would love to have a no-obligation conversation with anybody who would like to know more.
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