“By using Xero and Figured with farmers, we can get them to account for things as they are happening which provides them with useful real time information, to help them make more informed decisions.”
Bridget Telfer’s farming customers at Chrisp & Davidson were using a range of different systems to record their accounts, which meant that she had to import this data into her practice’s own accounting system each time. The frustration that this caused was that often the accounts would end up significantly different to where the client thought they were.
“Often the client wouldn’t have accounted for debtors or creditors, or they thought that they had a very profitable year, but in fact they had sold a bulk of their capital stock, and had not accounted for the effect this would have on their profitability”, Bridget explains.
“We would also have issues with getting accurate stock reconciliations that matched with the opening stock on-hand the previous year”.
By shifting her clients to Figured and Xero, they’re now able to account for transactions as they happen, rather than after the fact, so they always have a clear picture of where their finances stands.
Less time in the office, more time on the land
Bridget was aware that for most of her clients, messing around with their accounts was the last place they wanted to be spending time. “Many clients would almost avoid doing the bookwork until GST time, then they would struggle to find the time to get it done, rush things, and make mistakes”, says Bridget.
“By not doing their accounts regularly, it meant that when they wanted to review a budget, for example, they would first have to catch up on all the coding since the last GST period before they could even start on a budget.”
Since transferring her clients to Xero and Figured, Bridget has been able to shift her clients’ mindset of dealing with cash, and instead has moved them into 'accrual thinking' to deal with invoices as they arrive. From this, payments, budgets and GST are easily managed without having to handle the invoice multiple times.
“We have used this accrual-based accounting as a way of helping clients manage their time better when it comes to their accounts. Often it is much easier to find five minutes to deal with 2-3 invoices that came in for the day, rather than trying to put aside three days at GST time”, Bridget explains.
“Figured and Xero means that our clients now don’t have to worry about spending hours in the office. They have more time to spend working on their business, rather than on compliance.”
Looking forward vs looking back
Because other accounting systems were not able to offer a real-time view of finances, Bridget found that in the past, discussions with clients were always very focused on what had already happened. She’s now encouraging her farming clients to look to a better way of managing their finances with Figured and Xero.
“Going forward, we want to get clients less focused on what has already happened, and more focused on what is coming up, their longer-term goals, and how they can achieve these. For example, we are able to model the effect of change in value of livestock to show the clients the real financial benefit or downside of selling capital stock, or increasing stock numbers, on their bottom line”, Bridget explains.
“By having accurate information about what is happening now, they can make more informed decisions about the future!”