Archive for July 2009

why should business owners understand MYOB?

In the very busy world of running your own business it seems that you are now also expected to be the bookkeeper as well.  Sometimes we have no choice especially when we first start out, but a wise man once said “In the business world, everyone is paid in two coins:  cash and experience.  Take the experience first; the cash will come later.  ~Harold Geneen”.

With this in mind, why would you choose not to at least understand MYOB, or any other software package you choose to keep track of your business financials? As a small business owner myself, with a young family, I understand the pressures of just getting through the day to day work load without having to extend myself to extra training. I had to learn to use the computer, the internet, email, so having to learn the MYOB software was just daunting. But I have seen the need, done the MYOB training, and am reaping the rewards through being able to see the trees before the forest.

Why start a business in the first place?

I could have quite easily gone out to work for someone else and at the end of the day, left my troubles behind and headed home with money in my pocket.

I wanted the challenge and I had something I knew I could sell. Is that enough though? No, all business owners need to take responsibility for their business and there are so many responsibilities that we need to undertake.  Customers, Suppliers, Employees, Taxation, GST, Government Legislation, Work cover, Licenses, Equipment, Leases, Loans and the list goes on.

Having said that, why do we always seem to leave the financials of running a business to last? It’s really the most important part and getting to understand the financial side should be a first priority.  So many people say to me I have an accountant to do that stuff, but they only see him once a year if lucky, or they have a bookkeeper to do all the data entry and trust that that person is doing the right thing. I have had clients over the years (who because they didn’t know how to use their own software) have lost their businesses due to misappropriated funds by the bookkeeper. Not that I am saying all bookkeepers are dodgy, by all means they can be a massive asset to the business, it’s just that you as the owner are taking the risk and therefore should be educated.

I say get some MYOB training, even if it’s just the basic understanding of being able to read the reports generated by the software. You will find that the time spent in learning your MYOB software will repay you many times over and your business will benefit from your training and skills.

Why would you backup MYOB data?

I get asked a lot about backing up MYOB files, when, where & how.  I must say that I always tell my clients (and their staff) or students that it is critical that you backup every time you enter data.

Why, you ask?

Because MYOB like any other data, software or hardware can be prone to failure.  Now it may not be the MYOB software itself, but a virus or other outside influence, such as power outage, could attach itself to the MYOB data and corrupt it.

Many people do not service their PC’s like they should (you wouldn’t treat your car like that) and any hardware failure could make it impossible to retrieve the data.  Where are you then?, stuck on the highway with no RACV, because you did not keep an up to date backup copy of your MYOB data. This could be extremely time consuming and expensive with re-entering all that data over again!

If you do make backup copies of your data, do not leave them on your PC or in the same place as your PC.

Why you ask?

Because, if they are on your PC and it is stolen, not only is your PC gone but so is your data. If your Office or Home has a fire, it also burns up your back copies, so you must take your backups off site and away from your PC for storage.

Critical Backups.

You should also take end of financial year and end of payroll year MYOB data backups separately. This is because MYOB discards some information from the previous year’s work so that the data file does not become too large.

Mark these backup data files accordingly in case for any reason you need to restore the data to look at discarded information such as payroll data.

These ends of year data backups should definitely be kept securely as they are your financial records for that year and as such should be kept for a minimum of five to seven years under current law.