Episode 74 - FS360 Podcast - Assisting Small Business - Part 2

Modern small businesses have performance tools readily available to them, but for Evolve Online Bookkeeping’s Natalie Grohn, it’s about leveraging these tools for sustained success.

Speaking to Gavin Nash on the FS360 Podcast, Grohn explained the role that Evolve and Xero could play in a small business to ensure it is performing at an optimal level.

Low use of technology and a lack of young entrepreneurs mean that Australian small businesses rank last or near last in a host of vital indicators, according to a recent CPA Asia-Pacific (APAC) small business survey.

Last year, 40.9% of Australian small businesses enjoyed growth, compared to the APAC average pf 59.6%. Fewer small business are expected to enjoy growth in 2024 than any other captured nation.

Two factors are driving this, the first being that Australian small businesses lag behind in their adoption of new technologies and their want to adapt to the changing tech landscape.

The second is the lack of young Australians entering the business market. The survey found that Australia has the lowest proportion of businesses run or owned by people under the age of 40.

Where Evolve could help is through leveraging the use of these modern-day technologies to ensure businesses are thriving.

One key area is budgeting, with Xero’s budget variance report a strong tool to assist small business owners.

“You can easily download a template and then put in all your budget numbers and then easily load it back into Xero,” Grohn said.

“You can create different budgets to report against in your management accounts. The importance of this is that in preparing the budget itself you’d be able to have a look at your numbers and get to understand them a little bit more.

“That means you’ve got comparators month-on-month, year-on-year, to report your actuals against your budgeted projections.

“The various reports in Xero that you have available to you, number one being the budget variance report. A very simple set up so that you can actually run these reports at any time yourself.”

Xero offers charts and graphs to assist in tracking performance across gross profit, net profit on sales and debt to equity.

Through months of transactions in Xero, a range of graphs would be available on the business dashboard to assist in reviewing business performance.

“As part of our service, we provide all clients with a monthly management accounts pack. Within that pack can be various reports, they can be specialised like … a budget variance report,” Grohn said.

“Or it could be just simply a profit and loss and a balance sheet, your aged receivables listing and your aged payable listing and an executive summary.

“It’s sent out from Xero and it’s to all our clients, but it can be tailored to clients’ needs.”