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Author Archive Michael Pendred

Which ERP solution is right for you? Cloud or Onsite?

Selecting the right ERP system for your business does not have to be a complicated process, but you should consider the pros and cons of each option for your business – onsite or cloud-based? There is rarely only one solution for every business, and it does help to discuss the specifics of your situation and your goals with a professional ERP specialist (for current clients, or if you’re a new customer email sales@horizonbiz.com.au).

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A cloud-based ERP system can only be accessed online, and requires little maintenance – which is usually included in your monthly cost but its efficiency is dependant on the speed and costs of your company’s internet provider. An onsite ERP is one that your business hosts on a server on the premises, and maintenance is up to you and your IT team.

When you’re choosing between an onsite ERP or a cloud-based one, there are several factors you’ll need to keep in mind. Remember that the right system for you will work with your business as it grows.

  • Consider the cost of each option. Cloud based options are considerably cheaper upfront than onsite ERP’s but are ongoing.
  • Consider the reputation and plans for development of the software provider. Do you know of and trust the company name?
  • Consider installation and support – is this local (ie; can people come to you to help your team with updates, configuration and training) or is this only provided online/overseas/interstate?
  • Remember that you’ll need to update and upgrade your software
  • Consider the system you already use, how your staff use this and what would work best with it
  • Consider the size of your business and how it could grow
  • Have a plan for natural disasters
  • Consider the start-up costs and necessary work
  • Consider the speed and accessibility you’re looking for

COST OF ONSITE ERP VS. COST OF CLOUD BASED ERP

Generally, for an onsite ERP, you’ll have a high investment cost in addition to maintenance and upgrade costs, while a cloud based ERP requires a monthly subscription based on a package that you choose. However, you will need be dependant on factors such as internet speed for repetitive processes. For example, inputting invoices.

With an onsite ERP, you are responsible for the cost of the server and hardware, maintenance, the software, IT personnel to maintain both hardware and software, and more. However, this investment does become more cost effective in time with most large systems paying for themselves within a two to three year period. Also, the speed of your server will, for the foreseeable future, outpace your internet processing speed. This is particularly important if the majority of your business accounting activities take place onsite. You will also need to consider what other software applications you use in your day-to-day business. It is easier to ‘bolt on’ products to an onsite ERP system plus if you use other industry specific software (for example CAD) that needs a server anyway, the costs of maintaining a server will still exist.

If you choose a cloud based ERP, your regular ongoing costs may be higher, but the monthly subscription rate will include the cost of maintenance, hardware, software, and whatever the plan you choose includes. One of the major benefits of Cloud is the access to information from anywhere – great for your on the road Sales Team, work from home staff or Directors.

REGULAR UPGRADES AND UPDATES

When you host an onsite ERP, you are responsible for your own maintenance, including having an IT team to update software, install new hardware, and ensure that the settings are appropriate for your business. Both onsite and Cloud systems will need access to a dedicated team that understands how to configure the system to your needs.

As part of your monthly subscription for a cloud based ERP, upgrades and software updates should be taken care of for you. Your service provider should ensure that your business always has the newest version, and that the settings are customised to your business needs.

New versions for onsite ERP systems may require assistance by Support or a consultant – which is great if you have access to a local team.

All updates (think of Apple!) tend to come with fixes and potentially their own issues. This is less of an issue when an onsite ERP where versions can be ‘tweaked’ without having to wait for an online fix/update.

SPEED AND AVAILABILITY

As part of their service, cloud based ERP systems are usually as fast as your plan provides, and they are made available at all possible times. Generally, this should include a backup plan included for natural disasters, updates and upgrades, and any downtown will be scheduled at a natural low traffic time.

Maintaining your own onsite ERP system means that your own IT personnel will manage speed and availability of your system. In order to fully protect against natural disasters, you will likely need two separate servers with matching data in two different locations. As your hardware gets older, upgrades will be necessary to maintain the speed you want.

CONSIDER WHAT FITS YOUR BUSINESS

Whether you choose to host your own ERP or use a cloud based one may depend on the system you are already using. For example, if you don’t have a server, or a place to house one, a cloud based ERP might be more feasible. Do you have the IT team to maintain an onsite ERP? Choosing a cloud based one may make their jobs unnecessary.

Consider each of the items in this list based on the current size of your business, and the rate at which you’re growing. The investment required to house your own ERP system may or may not be worth it, depending on your business.

3 Tips to ensure you meet your EOFY targets on time

As we begin a new year, it’s time for cleaning out the old, making new resolutions, and getting organised. It’s the middle of the fiscal year, and you have six months until finances need to be in order for tax time and EOFY goals need to be met – so now is the perfect time to make sure that you are on track.

PERFORM A MID-YEAR SALES & FINANCE CHECK-UP

When it comes to mid-year check-ups, your accounting and business software (like the MYOB Exo Enterprise Accounting Software) can give you a snapshot of your current situation, help you evaluate where you stand and make a plan for the second half of the year in preparation to meet your EOFY targets.

Review your actual sales figures over the last six months and compare these to the forecasts you made at the beginning of the year. Are you on-target? Do you need to take action to boost sales over the coming months to meet your EOFY goals? This task can help you figure out your priorities for the coming months and even help you to make decisions about marketing strategies and budgets for the rest of the financial year to boost sales.

Your accounting software can also help you in tracking deductions, allowing you to take action to adjust your deductions and ensure your business is on track with your financial plan.

REVIEW YOUR ESTIMATED TAX PAYMENTS

It is so important for small businesses to make sure that they are paying estimated taxes correctly. Underpayment can lead to direct penalties, but overpayment can hurt your business financially by shrinking your cash flow during the year, leaving you less to work with.

Estimated taxes are only estimations, usually based on your tax payments from the previous year. However, mid-year is a great time to recalculate your taxes, especially when you have exact numbers for half of the year already. Your estimated tax payments for the second half of the fiscal year can be more accurate with a re-evaluation of your estimated payment amounts.

REVIEW YOUR FILING AND DOCUMENTATION SYSTEM

Keeping your business records and important documents organised can make a huge difference when tax time does roll around. One of the most stressful parts of filing taxes can be going through receipts, documents and expenses, so make sure that the filing system you currently use has been working for the first six months of the fiscal year. Consider making a backup copy of your records thus far, and check in with employees to ensure that they are keeping accurate and organised records.

This way, when the fiscal year ends, you will be able to understand and evaluate your financial year, file your taxes accurately, and avoid an audit!

Talk to us today to find out how a MYOB Exo solution can help your business to improve systems and meet targets. Call us on (08) 9328 1678 or fill out an online enquiry form and we’ll get in touch!

8 Tips to balance cash flow for seasonal business

Managing cash flow and adequate financial planning are important in any business, and every business has seasonal peaks and low periods. Seasonal businesses that do most of their business during one season and may even close at another time of year need to take extra care when creating a reliable financial plan to help carry them through the low season. Christmas is a slow period for many businesses (aside from retail of course!) as companies close for the holidays and customers take to their homes to spend time with family – so what better time of your to look at some useful cash flow tips?

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There are various ways to create a financial plan, and depending on your business, whether your business operates for 12 months every year or it is closed for part of the year, your financial plan should be customised to your business. Consider the following tips when creating your business’ financial plan.

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1. BUDGET FOR YOUR FUTURE

Running a seasonal business means that you already know that some of the time, you will have more money coming in, while other times there will be less coming in. Budget yourself, and always plan for the future by looking at either your own financial history, or research from other companies. Understand your fixed and variable costs, and know when you can cut back on variable costs. Make a potential forecast, budget your spending accordingly, and save enough to cover your expenses at the low points.

2. USE YOUR OFF-SEASON TO GROW

If you know that you have a low season, you will have both less work to do, and less money coming in. Instead of taking a vacation or twiddling your thumbs waiting for business to pick up, take the time to strengthen your business. Work on your marketing plan, build a financial plan, try new products or services that might help your business bring money in during the low season, or take classes to increase your know-how.

3. MAINTAIN YOUR CREDIT

No matter how much planning you do, there is always the chance that you may need to take out a loan. Make sure that you pay your bills on time, keep open lines of credit, and do not build up a large amount of debt, especially during your high season.

4. BUILD RELATIONSHIPS WITH SUPPLIERS

If you are trying to save money on purchases, find one company with whom you work well. Pay your bills on time, and ask about discounts for buying in bulk. You can also negotiate the terms of your payments with suppliers. Rather than paying a lump sum, try arranging a payment plan with a supplier.

5. SIMPLIFY YOUR INVOICING PROCESS

Make sure that your invoicing process includes a partial payment up front, or that you don’t send out products until you have received payments. Minimise the risk of giving out free products or services to your business by planning ahead.

6. INCENTIVISE ON-TIME PAYMENTS

Similar to building relationships with suppliers, if you have loyal customers, offer rewards for things like paying bills on time or early, loyal purchases, or buying in bulk. Maintaining your customers is just as important to your business finances as is saving money on your expenses.

7. OUTSOURCE OR FIND GREAT SOFTWARE

If financial planning is not your strong point, it is important to hire someone who excels at it, outsource your financial planning, or find a DIY financial planning software that can simplify the process for you. Software like the Exo Finance – Core Module allows you to run your business’ finances, accounting, stocks, analytics and performance, and more, even remotely.

8. CONSIDER LOANS CAREFULLY

If it comes down to it, and a loan seems like the best option to cover low periods of cash flow, discuss your options with a financial planner, and know what your loan is for. Make sure your loan fits your financial plan, you will be able to pay it off in the high season, and that you stick to a budget or use financial software to help you control spending, collect balances due, and maintain relationships with both clients and suppliers.

5 Tips to increase the conversion of Quotes into Sales

Conversions are the bottom line of business – the end goal.

Granted, there are no shortcuts. You have to produce well-structured quotes and tenders that provide compelling reasons to choose your company, and you have to do it consistently over the long haul.

But no matter how well prepared your quotes and tenders are, they never hit the mark 100% of the time, so there’s always room for improvement. There’s also the issue of prospects taking their time to sign on the dotted line and make your proposal less than a pressing priority.

So, how do you strike the right balance, and increase the conversion of quotes into sales? Here are five tips to boost your trustworthiness and your conversions.

1. USE CRM

A good knowledge of your prospects enables you to develop quotes that target their specific need, but where do you get, store and sort information about your contacts? A customer relationship management system can be a powerful tool in your quote-to-sale armoury.

MYOB EXO CRM Module and other similar solutions can offer you complete visibility and let you record your prospect’s quote likes and dislikes, their location, their spending patterns, age and gender, tastes, needs and buying habits. This will give you a detailed picture of their spending power, giving you the opportunity to modify your quotes and devise them according to their liking.

2. LEVERAGE CUSTOMER MANAGEMENT SOLUTIONS TO ADDRESS LEADS EARLY

An article published in The Harvard Business Review pointed out that leads addressed within the first sixty minutes are seven times more likely to develop into meaningful conversions. Prospects may have questions about quotes, product features, the stock available, etc. These need to be addressed quickly if you want to see an uptick in conversions.

Doing all this requires a unique customer management solution, such as the one found in EXO finance. Companies can use it to manage all the customer contact details to manage quotes, invoices, orders, stock, inventory and more, along with sales and marketing activities. Such solutions can help you comprehensively understand your customers and manage your companies and quote contracts; the sales staff will love the real-time stock updates as it will enable efficient addressing of prospect queries.

3. IMPROVE QUOTES BY USING OLD PROJECT JOBS AS A TEMPLATE

You can manage the profitability of your projects and jobs in real time by providing direct visibility of all your process, input and time costs, including labour hours, materials, equipment hours and consulting hours.

This is possible through job and project costing solutions that enable you to identify any variances and make appropriate quotes. And by reviewing previous jobs in areas like job resources, cost types, cost groups, job types, job resources and, most importantly, quote terms, you can save time on complex projects.

4. INTEGRATE SALES MESSAGES

Integrate marketing and sales messages into your proposal. Since quotes are a part of the sales process, you need to reinforce the reasons to choose your company versus one of the competitors.

If you don’t provide them a reason to choose you, you could end up being a textbook example of a poorly handled sales proposition. So ensure that your prospects don’t simply base their decision on the quoted price.

5. INVOLVE THE KEY DECISION MAKERS

Once you identify who key decision makers are, talk to them and involve them in the sales process in order to expedite the quote for the prospect. This also lets you handle any avenues for buying objection with the prospect involved.

Once there is an agreement, send the quote document promptly in a professional manner. Talk it through with the person who is responsible for the ultimate decision. While it’s not always possible to do this, it doesn’t hurt to try getting input of key decision makers.

How to successfully implement a change of Accounting Systems

Your accounting system effectively documents all the activity in your business and provides critical information to make good business decisions. If you’ve outgrown your accounting system and you’re moving to a new and improved model (like MYOB Exo!), it’s absolutely necessary that the transition is as seamless as possible so no information falls through the cracks.

To successfully transition to a new accounting system, you need to consider these factors:

CHANGE MANAGEMENT

A smooth transition starts with preparing your staff for change and guiding them through the process. First, communicate why your firm is moving to a new accounting software system. While the transition might require a lot of work on behalf of some key staff members, explain that your business will benefit from the new system in the long run.

Once you’ve explained why you’re making the transition, train your staff to implement the change. Schedule some time and verify that your current accounting procedures are documented. Work with your software provider to create a plan of conversion. Ensure that all stakeholders (accounting and finance staff, operations, senior management and even sales if your accounting system is linked to your inventory or job costing functions) are involved in planning the conversion.

UNDERSTANDING YOUR UNIQUE BUSINESS

Your company has processes that are unique to its particular industry. A retailer, for example, accounts for inventory. On the other hand, a manufacturer must account for raw materials and work in progress. You need to consider your unique business processes and how they link to your accounting structure in order to implement a smooth software conversion.

TEST YOUR NEW SYSTEM

Ideally you should have a transition period in order to test the new system is tracking data in the same way as the old system and avoid missing anything out. Run a set of transactions concurrently through your current and new system and review the results to ensure they are accurate.

Consider a denim jeans manufacturer for example. They decide to run transactions through their new system, at the same time, they process data through their existing (live) system. If their new software is operating properly, they should get the same accounting results as their current system produces. In this case, that means that the same dollar amount of denim is moved into production using both accounting systems. Both programs also post the same number of units, the same sales intake, same profit figure etc.

A FINAL SET OF TRANSACTIONS

Before you implement your new system, generate a set of adjusted financial statements at the end of a particular period. That “clean” set of financials will be your starting point for a new system. At the end of October, for example, you print a trial balance and post your accounting adjustments. Once you’re satisfied with your adjusted trial balance, you generate October financial statements (balance sheet, income statement, etc.).

GOING LIVE

Say you decide to go live with your new accounting software on November 1st. You’ve communicated the November conversion data to your staff. Each person in the organisation has provided his or her input on the implementation process. Your staff has a new operations manual and has trained on the new software.

At various points after software implementation, you analyse the results that are generated by the new software. You use your October 31st accounting data to ensure that November accounting activity is posted correctly.

These tips can help you have a smooth transition to your new accounting system.

WORK WITH AN EXPERT

Consider working with an accounting software expert to help you with the implementation process. We are available to talk through your particular situation with you and provide advice to help make your software switchover seamless. Contact us at (08) 9328 1678 or via our contact form and we’ll get in touch!