Management
January/February 2003

Keeping Track
By Geoff Coy, Certified Practising Accountant

G

eoff Coy, Accountant, looks at the results of a survey into computerised record keeping to find out who benefits from what.

Recently, CPA Australia released the results of its Australian Small Business Survey. It showed that four out of five small businesses upgraded or changed their record keeping processes to deal with the introduction of the GST. The majority upgraded or changed both computer hardware and software. Furthermore, two out of three businesses that upgraded their systems experienced frustration with their new systems.

Accountants and other professionals have long held the view that using computerized accounting packages will provide businesses with superior data to enable them to be more efficient in managing their resources. However, there are other factors that may stop businesses from using computers for record keeping purposes. Some of the key findings are:

Computerised or Not Computerised

· For businesses using accounting software, the findings showed that 77% had been doing so for between one and five years and the majority used either MYOB or Quickbooks.
· The major influence on the decision to use accounting software was the introduction of the GST and that the major influence in the decision was their accountant.
· 18% of those surveyed made the decision because they felt that the benefits of computerizing their records would outweigh the costs.
· The majority of small business operators appeared to be satisfied that their decision to computerise their records had made their business more efficient.
· Almost three quarters of operators used their software to produce their BAS and 86% of the respondents said that computerized record keeping had helped them to meet the requirements of the GST.

For businesses not computerizing their records, the main reasons given were satisfaction with the present system, lack of computer skills and knowledge, cost and lack of time. There was also a tendency to opt away from computerized records by older and less educationally qualified operators and also from those in trade sectors.

As for their relationship with the accountant, approximately one third of business operators who use accounting software reported that the data entry was undertaken by an external person, usually their accountant. About one in six of the users believed there would be additional benefits in meeting with their accountant more often.

One third of the non-user group of business operators meet with their accountant on only one occasion per year, whereas two thirds of the user group meets with their accountant at least quarterly. This point was clearly related to both the size of the accounting firm and the small business and the fact that most non-user businesses only used their accountant for taxation matters.

The overall findings of the report indicate that there is a role for accountants, the accounting profession, industry associations and IT training professionals to encourage small business operators to computerise their record keeping process.

Recent Industry Developments
Recently Caltex implemented an interface between its back office system (AMS) and the MYOB accounting package. Caltex has stated that extracting the AMS information to MYOB will give better control and a potential reduction in accounting fees whilst at the same time there is an initial commitment in both time and cost as well as a continued commitment in time. In doing so, Caltex is warning its dealers that taking on the AMS export option is an added responsibility in day-to-day bookkeeping and record management.

The key point made by Caltex is this: "Managing your own accounts is an ongoing commitment. If you don't put the effort into maintaining the accuracy and the reliability of data going into MYOB, then MYOB won't automatically sort the problem out for you."

The Federal Government also supports the view that using computerized accounting packages will allow small businesses to meet their GST obligations and at that the same time provide the business operator with superior information to enable more efficient financial management.

Choice of Software
And finally, having been a user of both MYOB and Quicken products for both client and practice over a 10 year period, I have personally found both products offer advantages and disadvantages and are more suitable to some industries and operations than others. But, for ease of operation and maneuverability, Quicken wins hands down.