How to use Thriday with your existing accountant
For some business owners considering Thriday, you may have a question mark about what this means for the relationship with your accountant. Because Thriday automates banking, accounting and tax, does that mean your accountant is no longer required? This article breaks down the role of an accountant and what it means for your business after you sign up for Thriday. The results may surprise you.
Accounting as a profession has a long history. Merchants and traders used early forms of accounting to record transactions and track money flow. During the industrial revolution, the need for more detailed financial information led to the emergence of professional accountants. In the 20th century, accounting became regulated with the establishment of professional bodies and the creation of standardised accounting principles. More recently, new software such as Xero and MYOB moved accounting into the digital age and made it easier to maintain accurate records.
Becoming a certified accountant takes many years of practice. First, they must complete a degree in accounting or a related field. An accountant will then begin working in an accounting firm to gain practical experience. The final step is to complete a professional exam, such as a Chartered Accountant (CA) or the Certified Practising Accountant (CPA). After passing these exams, you're certified. It's a lot of work, and it should be noted that this training and education is required for a reason. If professional accounting standards are not maintained across the industry, then reporting will become inconsistent over time and businesses, investors, and the economy will suffer.
What an Accountant Does
Whilst each accountant has their areas of expertise, and some specialise in particular industries or business types, an accountant will typically support a business in the following six areas:
- Reconciling transactions: Accountants ensure all your financial data is entered into accounting software to maintain ledgers and reconcile accounts.
- Financial reporting: Accountants are responsible for compiling financial data to create accurate and meaningful financial statements, such as income statements and balance sheets.
- Tracking budgets: Accountants help businesses create and monitor budgets to ensure they make the best use of their money.
- Tax compliance: Accountants ensure that their clients comply with tax laws and that all necessary BAS and tax returns are filed on time.
- Auditing: Accountants may conduct internal or external audits to ensure that financial records are accurate and that an organisation follows established financial procedures.
- Strategic advice: Accountants can use their knowledge to provide insight and guidance on critical business decisions, such as financial planning, cost management, and investment strategies.
Accountants play an essential function in the economy and have for centuries. The absence of professional accounting would significantly hinder the functioning of businesses, making it difficult for them to operate effectively and make informed decisions. Without strong accounting standards, there could be significant financial mismanagement and fraud. This would make it difficult for investors and other stakeholders to trust the financial information provided by a business when they need to reach an investment decision.
Now that you know more about accounting, its history, purpose, and what an accountant does, it's time to understand more about Thriday and its role.
History of Accounting
To understand Thriday, it's important first to understand the recent history of accounting in the Australian market. Before the launch of accounting software in the late 80s, accounting was entirely conducted on paper files. Businesses would literally take printed bank statements, journals, and a shoe box of receipts to their accountant for a face-to-face discussion on their books.
When personal computers emerged, new applications emerged; one of those pieces of software was MYOB. When MYOB was released, the era of accounting software was here. For the first time, accountants could store data and reports on a computer and create reports ready for printing and filing. MYOB grew in popularity as it made it easy for accountants to track, edit and maintain their client's data.
In 2006, Xero took accounting into a bold new era. One of the challenges with accounting software at the time was importing transaction data from bank accounts into accounting software. With the launch of bank feeds (the ability to give permission for Xero to pull data from an online bank account) and cloud computing, the 3rd generation of accounting software was born.
Xero removed the need for an accountant and business owner to be chained to a desk, and improvements like bank feeds meant that getting a snapshot of everything happening in a business was much more accessible. As a result, Xero proliferated quickly and became very popular with accountants.
While MYOB and Xero have made things easier, they were primarily designed for accountants to use. They took paper reports, moved them online, and replaced statements with bank feeds, but ultimately the accountant still has to sit there and perform the same six functions they always did. Now instead of just paying an accountant for help, you also had some expensive new software to pay for as well.
Thriday Launches a New Era
Thriday saw that whilst software had emerged to take accounting from paper to online, the fundamental role of the accountant had yet to. It was still the very same thing ancient merchants and traders were doing hundreds of years ago. Recording data, reconciling it and producing reports. Indeed in the 21st century, with artificial intelligence, incredible computational power and machine learning, there was an opportunity to evolve. You can type any question into ChatGPT to get an answer, but you still have to reconcile your transactions manually???
Thriday decided to forge a new path and has taken an entirely novel approach to accounting that focuses on the small business owner. Using artificial intelligence, Thriday's unique value proposition is eliminating financial admin that currently relies on the business owner, a bookkeeper or an accountant to do. To achieve this, Thriday has integrated banking, accounting and tax into one platform. When your register for Thriday, you get issued a business bank account* and Visa Debit card*. As you transact and receive payments, data is categorised automatically and fed into the Thriday 'bookkeeping engine', which interprets the data, augments it with third-party data, and determines the appropriate tax treatment for that income or expense.
With Thriday, there is no need to reconcile data between different platforms as everything is housed in one place. This not only improves accuracy and reduces manual handling but also saves business owners hours each week on financial admin. Thriday is a powerful and robust platform that does the books in real-time using a combination of cloud computing, artificial intelligence, and the latest machine learning technology.
In addition to real-time accounting, Thriday allows businesses to see the health of their business at a glance showing their predicted tax and cashflow positions, as well as lodge their BAS to the ATO. Insights and processes that are instrumental to making smart business decisions and saving time.
In the same way that you don't trawl the internet manually for websites, you 'Google' them, and you don't put your finger in the air to predict the weather; you use an app, Thriday does what used to be complicated and time-consuming automatically. So what role can an accountant play if you are using Thriday? Well, let's go back to where we started. Remember, there were six things an accountant did:
- Reconciling transactions
- Financial reporting
- Tracking budgets
- Tax compliance
- Strategic advice
Thriday can support you with the first four items. On Thriday, your bank transactions are reconciled automatically, tick. Financial reports are available for download in real-time, tick. You can create multiple sub-accounts to budget and monitor your spending, tick. Thriday will also notify you when your BAS and tax are due and allow you to lodge them to the ATO. Big fat tick! As a result, you should still use an accountant for audits, strategic advice, and any of the first four you want help with. It's up to you!
You see, Thriday doesn't detract from what your accountant does; it frees up time for your accountant to work on more strategic areas. This is the beauty of Thriday. It reframes the role of your accountant so that they do less bookkeeping and do more strategy. This can include identifying the best structure for your business, succession planning, acquisition and exit support, investment advice, and financial planning. In this case, your accountant would pull all the information from Thriday to help them consult you on the strategic guidance you need.
Reframing the Role of an Accountant
Reframing the role of an accountant makes a lot of sense for all parties. Accountants dislike simply pouring over numbers all day long. This type of work is mundane and provides little strategic value. For business owners, it's a more efficient use of your money. We liken it to hiring a personal trainer. You wouldn't pay for a personal trainer every time you go to the gym. The cost would be too exorbitant. The better approach is to use a trainer once a week to ensure you are doing things the right way so that you can implement those techniques yourself. You can think of Thriday as the scales and the personal trainer as your accountant. To lose weight, the business owner needs to hit the gym, the accountant needs to train them, and Thriday can calculate how much weight they have lost.
There are many benefits of having someone trained in accounting to help manage your finances. An accountant can do more than just crunch numbers as Thriday can. They can provide valuable advice on how to run your business more efficiently. Some of the advantages of having an accountant are:
- Expert knowledge: Accountants are very knowledgeable about tax laws and regulations, so they can help ensure that you can minimise your taxes legally.
- External perspective - An experienced accountant can review your finances with fresh eyes and offer valuable insights into how you compare with similar businesses.
- Reduce Stress - Dealing with finances can be stressful. Having an expert handle this task for you can reduce stress significantly and give you added peace of mind.
Ultimately, the decision of whether to hire an accountant sits with you. The good news is that whatever decision you take, Thriday can eliminate the time that you waste on financial admin. If you have a simple business, you may decide an accountant is not required and that you can go it alone with Thriday. If you have a more complex business, there are many advantages that come with using an accountant for more strategic work. Accountants can bring expert knowledge, provide perspective, and reduce stress while helping ensure that your business operates as efficiently as possible. No matter the choice, Thriday is an excellent tool for streamlining your banking, accounting and tax.