Modern small businesses have access to a variety of performance tools, and for Evolve Online Bookkeeping’s Natalie Grohn, the focus is on effectively utilizing these resources to achieve sustained success.

In a discussion with Gavin Nash on the FS360 Podcast, Grohn highlighted the potential contributions of Evolve and Xero in ensuring that small businesses operate at their highest efficiency.

According to a recent CPA Asia-Pacific (APAC) small business survey, the limited utilization of technology and a shortage of young entrepreneurs have resulted in Australian small businesses ranking at the bottom or near the bottom in several critical performance indicators.

Last year, only 40.9% of Australian small businesses reported growth, significantly lower than the APAC average of 59.6%. Projections for 2024 indicate that fewer Australian small businesses are expected to achieve growth compared to other nations surveyed.

Two primary factors contribute to this trend. First, Australian small businesses are trailing in the adoption of new technologies and their willingness to adapt to the evolving technological landscape. Second, the data reveals a concerning lack of young Australians entering the business sector, with Australia having the lowest percentage of businesses owned or operated by individuals under 40.

Evolve can play a pivotal role by leveraging modern technologies to foster business success.

A notable area of focus is budgeting, where Xero’s budget variance report serves as a valuable tool for small business owners.

Grohn stated, “You can easily download a template, input your budget figures, and subsequently upload it back into Xero.”

“This process allows for the creation of multiple budgets that can be referenced in management accounts. The significance of this practice lies in the opportunity to analyze your numbers closely during the budgeting phase.”

“By doing so, you will possess comparators on a month-to-month and year-to-year basis, enabling you to assess your actual performance against your budgeted expectations.”

Xero provides various reports, with the budget variance report being particularly beneficial. The platform's user-friendly setup allows business owners to generate these reports independently at any time.

Xero also offers visual analytics, including charts and graphs, to monitor critical performance metrics such as gross profit, net profit on sales, and debt-to-equity ratios.

As businesses engage with Xero over time, a comprehensive array of graphical representations is available on the business dashboard, facilitating performance evaluations.

“As part of our service, we provide our clients with a monthly management accounts package. This package includes various reports, which can be tailored to specific client needs, such as a budget variance report,” Grohn explained.

“It may also encompass standard reports like profit and loss statements, balance sheets, aged receivables, aged payables listings, and executive summaries, all generated through Xero and personalized for our clients.”