Preparing and lodging a tax return, and keeping up with your finances, are necessary evils.
But gone are the days, and nights, leading up to tax time spent wrestling with piles of receipts and invoices, trying to make sense of it all.
With the introduction of cloud accounting, keeping track of your small business’s finances has taken a turn down Easy, well, Easier Street, and it looks like it’s going to be an even smoother ride from here.
Megan Faraday-Bensley, director for business advisory and taxation and small business specialist at Prosperity Advisers, said most small business were embracing cloud technology, and warned those who weren't might get left behind.
"The take up rate of cloud solutions is increasing exponentially," she said.
"The cloud software market is a constantly evolving platform and businesses need a nimble solution that can keep pace and change as software continues to evolve and emerge.
"If you are running a business and you have not brought the cloud and the technology surrounding it into your life you are limiting the performance of your business.
"Right now, the cloud is still your strategic advantage. Very shortly, it will be your strategic necessity as the way the world works and collaborates fundamentally changes."
Xero managing director Trent Innes said some new innovations and updates to the Xero range of products would come into effect this year, with most being unveiled during the company’s annual roadshow.
“Xero Tax helps drive paperless efficiency and introduces time-saving measures that make tax-time less painful for accountants, bookkeepers, and small businesses,” Innes told The Huffington Post Australia.
“The innovation has seen significant uptake in the past year -- from 450 to 1370 enabled practices. More than 1 million lodgements have been made, a figure that’s up significantly from 300,000 this time last year.
“For the 2015 financial year to date, registered agents using Xero Tax have lodged income tax returns for clients resulting in income tax refunds exceeding $357 million, much of which was pumped back into the Australian economy.
“As small businesses account for approximately half the economy, some $150 million is expected to have wound up back in the hands of small businesses.”
Cloud accounting has transformed the way accounting and bookkeeping firms keep small business on track, with Sue Hart of Synergy Bookkeeping saying it had opened up a "whole new world".
“Our old manual folders, with elastic bands with dog-ears full of signed and lodged BASs and printed copies of emails have been replaced with electronic storage within the client job on Xero Practice Manager using Xero Tax," she said.
"Since adopting Xeropractice tools, we never looked back and it’s become an integral part of our operation.
"Without it, we wouldn’t have the continued growth or financial outcomes we now see.”
Some of the new features of Xero Tax include:
- Integrated worksheets and smart grids to make it easier to capture and calculate GST for Xero and non-Xero clients;
- Support for e-sign powered by Adobe Document Cloud for all income tax returns and activity statements;
- An integrated cover letter, and optional comprehensive substantiation declaration;
- Integration with Dropbox for Business for document storage;
- Support for the ATO’s new Cloud Authentication process enabling setup via a three minute automated telephone call;
- E-signatures alone save up to 15 minutes per tax return or activity statement, significantly cutting down paper forms and giving more time back to registered agents and small businesses around Australia.
Innes said Xero’s annual roadshow, during which the company met with more than 8000 accountants, bookkeepers and tax specialists over three weeks in 21 locations across Australia, was a great way to connect with those who use their products -- and gain valuable input and feedback about potential changes and add-ons.
“We love getting out on the road celebrating our mutual success, sharing some of the amazing new innovation coming down the line and most importantly spending time 1:1 with our partners and customers,” he said.
“While we always keep them updated about product updates, new accounting and add-on partners, as a company it’s important to create opportunities where you’re able to strengthen those relationships in person and hear their feedback on your product.
"Some of our best features have come after we got feedback on the pain points our partners and their clients were facing.
The future -- and your sanity -- is in the cloud
While Innes realises the move to the cloud may be daunting for some small business owners, he encouraged them not to rule out the possibility.
“Cloud accounting has rapidly taken off among Aussie small businesses, as more and more business owners recognise the value of a paperless system and the ability to do their accounting anywhere, on any device,” he said.
“A lot of people fear the cloud, yet they aren’t sure exactly what it is they are afraid of. For business owners hesitant to make the move, I’d recommend doing the research before you write the option off.
“If you’re using a desktop or manual accounting system, you’re likely not aware of how much time and stress you could be saving yourself and your staff. Sit down with an accountant or bookkeeper and map out your system -- exactly how much is being spent, the costs, and the pain points.
“They will be able to advise you on how all of this will look if you were to shift to the cloud and what’s required to make the move. You’ll likely be surprised at how simple and seamless the process is!”
Innes, who is new to the MD role at Xero, said one of his key interest areas was making sure small business are educated about the best ways to become efficient and effective.
“I strongly believe that if a small business understands their numbers, they are likely to be more successful,” he said.
“When people don’t understand or feel on top of their finances, the accounting side of the business often becomes daunting and stressful.
“While Xero does the hard, repetitive grind of compliance work and provides timely insights, it’s incredibly important for business owners to learn how to manage their cashflow and are across it at all times, in order to make smart day-to-day business decisions.
“Education will be a huge focus for Xero this year — it’s crucial for small business owners to feel that they have control over their finances, which inevitably makes the process more enjoyable.”
Innes said a number of other developments to Xero products had been announced during the roadshow, that include:
- Xero HQ -- A redeveloped client manager for partners to use to access Xero files. It syncs information automatically with Xero client files, Xero Tax, Xero Workpapers and Xero Practice Manager and will combine features from mobile platforms such as alerts and notifications to bring up the information they need quickly;
- New activity statement -- a statement pulling information from the client file to auto-populate the return within 90 seconds;
- Partners can now send an activity statement to clients to be signed electronically. The quarterly business activity statement (BAS) is the most used form in Xero, so adding electronic signatures will cut down 15 minutes from each client;
- Alerts and notifications -- we are building a broad notifications platform that shows alerts covering banking, payroll, GST & BAS, Workpapers and E-Sign, followed by Xero Tax and others. The alerts are more useful than a simple reminder, they include links taking you to the screen requiring your time;
- Dropbox -- Xero Tax will automatically store electronically signed files in the relevant client’s folder in your Dropbox account;
- ATO -- It will take less than three minutes to connect Xero Tax to the ATO, as the ATO is abolishing the AUSKey digital certificate and replacing it with cloud authentication, which will be added to Xero HQ;
- A conversion service that will allow partners to transfer MYOB Tax data into Xero Tax.