Systems planning pays dividends for new businesses

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Published on the 24/03/2014 | Written by MYOB

The formative years of a new business can define future success or otherwise. Selecting the right processes and support systems, and resourcing them appropriately, are critical factors in building long term value…

Each year around 300,000 new businesses are formed in Australia and around 50,000 in New Zealand. Most are established within the first few months of the year, as entrepreneurs are motivated to head out on their own after weighing up the opportunities available with another year in their current job.

For many, the start-up phase of the business lifecycle is very similar. Limited resources and constrained capital compete with the entrepreneur’s energy and enthusiasm. It’s exciting, stressful, yet often extremely rewarding.

Because so much of the work in the start-up phase falls to the business owner, most veteran entrepreneurs describe the stage as the hardest they have ever worked. However, a few key decisions about the structure of the business and accessing the help available can make all the difference – not only to a successful launch but also long-term growth and profitability.

Getting the right help
One of the key relationships any new business owner should form is with their accountant. The right accountant offers much more than simple compliance services. They can provide a broad range of strategic advice and business benchmarking that will be instrumental in establishing a successful operating structure, trading terms, contracts and a range of other fundamental systems.

Rather than waiting until the first tax returns need filing and taking a past-year perspective, working with a forward-looking accountant right from the start-up phase can make an enormous difference to the business.

Using the right tools
Establishing a relationship with an accountant early also allows a new business to access the latest productivity-enhancing accounting and business management technology. With start-ups no different to any business owner in always being on the lookout for saving time on admin, these modern solutions should always be considered.

MYOB’s cloud accounting system, the browser-based MYOB LiveAccounts, is designed specifically for local start-ups and small businesses. LiveAccounts enables businesses to manage compliance, track expenses, and create invoices from an easy-to-use online system. Starting from less than $1 a day, the affordable, cloud-based software can be accessed anywhere and at any time – reflecting the real-life requirements of a busy start-up.

The software – like all of MYOB’s online solutions – is also expressly designed to promote collaboration between a business operator and their business advisor. Working together in real time on the same set of data allows accountants and other financial advisors to help businesses respond quickly to any changes or opportunities, while at the same time eliminating errors and associated costs.

Significant cost savings can also be made through the use of one of LiveAccounts’ most popular features: bank feeds. The system, which automatically creates and allocates transactions, saves business operators a great deal of time – an average of 10 hours per month according to MYOB’s latest client study.

Supporting growth
One size does not fit all when it comes to the individual development of a business. As it takes on staff, diversifies products and services, and even enters export markets, its needs evolve. The business owner and their team need a more powerful, feature-rich solution to manage the growing complexity of the business.

In recognition of that, MYOB has built its reputation as New Zealand’s leading provider of accounting software by offering choice for every stage of a businesses’ development.

The cloud-enabled MYOB AccountRight range is the next step up from LiveAccounts. A product suite offering four modules, it offers all the freedom and convenience of working on (and saving) your data online, coupled with the processing capabilities and added security of the desktop. With features like inventory management, time billing, multiple currencies and deeper reporting, AccountRight can help growing small businesses cope with every new step in the path to expansion.

Using the right software platform also enables business operators to introduce better operational practices, such as identifying bad debtors to improve cashflow, while freeing them up to focus more on business development.

Bursting at the seams
For some local businesses, significant growth means a major increase in complexity. For many, the first signs they are outgrowing their current accounting software come in the form of a slowly increasing awareness of limitations.

It may be that critical information becomes harder to find and/or more frustrating to report on in the manner that’s now required. It may be that stock levels are climbing and staff now can’t get a clear overview of what is where. It may also be that the growing number of departments are using different systems that don’t talk to each other – requiring an increasing amount of data entry.

Vital information
Good information is critical to running a successful larger enterprise. MYOB EXO Business, a fully integrated financial and business management system, is designed for the increasingly complex demands of growing and mid-sized businesses.

The system makes the ‘big picture’ available to the managers that need it, in the manner they require it, while offering a deeper view of line processes. Unique management dashboards offer a graphical representation of the real time performance of the organisation – ensuring CEOs and senior managers are always in touch with key aspects of the entire operation.

The system is offered in a series of compatible modules: Finance, Job Costing, Point of Sale, Fixed Assets, Customer Management, Reporting and Inventory Control. The modular design provides even greater flexibility for businesses to add to the system as and when they need to.

The key asset – and major cost – of most growing businesses is their workforce. Working alongside EXO Business, MYOB EXO Employer Services offers businesses of up to 1000 people greater control over staff administration. The system not only enables larger operations to capture time and manage payroll, it also provides a vehicle for better staff communication – a vital aspect of business growth and development.

The right information at every stage
2014’s crop of new business owners are right now taking the first steps on a journey that will transform their lives, and contribute to the diversity and growth of the entire economy.

How well they succeed in the coming months and years will often come down to the decisions they make during this formative period – particularly in terms of the fundamental processes and systems they adopt for their business. How well they succeed in creating a saleable business will also depend in many respects on these early decisions.

Business operators who select an accounting system that can grow with them, with a choice of options that will meet their individual needs, and a clear upgrade path as they evolve, will have created the foundation for lasting success – however they define it.

Getting the right advice along the way will also ensure they make the most of every advantage.

Visit myob.com.au or myob.co.nz for details on MYOB’s range of accounting and business management software – used by around 1.2 million businesses in New Zealand and Australia. The website also provides information on choosing the right accountant and a list of nationwide Approved Partners who can help select and install the right software and systems for your needs.