New Zealand's push towards a cashless economy
In recent years, New Zealand has been pushing towards a cashless economy, with more and more businesses adopting electronic payment systems. While this shift towards cashless transactions brings many benefits, it also presents challenges for small businesses and their bookkeepers. In this blog, we’ll explore what this push towards a cashless economy means for small businesses and their bookkeepers in New Zealand.
Adapting to new payment systems
The move towards a cashless economy means that businesses need to adapt to new payment systems. This includes accepting electronic payments via credit and debit cards, as well as mobile payment platforms like Apple Pay and Google Wallet. This requires businesses to invest in new technology, such as card readers and point-of-sale systems, which can be expensive. However, not accepting electronic payments can result in lost sales, as more and more consumers prefer to pay electronically.
For bookkeepers, this means that they need to be proficient in using these new payment systems to record transactions accurately. This may involve training and upskilling to use the latest accounting software to ensure that all transactions are recorded correctly.
Reducing the risk of fraud
Another challenge for small businesses and their bookkeepers is the risk of fraud. With electronic payments, there is a risk of fraudulent transactions, such as chargebacks and identity theft. To mitigate this risk, businesses need to implement secure payment systems and regularly monitor their accounts for any suspicious activity.
Bookkeepers need to be vigilant in monitoring transactions for any signs of fraud and ensuring that all transactions are accurately recorded. This includes reconciling accounts regularly and reviewing financial reports to identify any discrepancies or unusual activity.
Streamlining bookkeeping processes
While going cashless presents some challenges, it also offers benefits for small businesses and their bookkeepers. Electronic payments can help to streamline bookkeeping processes, making it easier and more efficient to record transactions and manage finances.
For example, electronic payment systems can automatically record transactions, reducing the need for manual data entry. This can save time and reduce the risk of errors, allowing bookkeepers to focus on more value-added tasks.
In addition, electronic payment systems can provide real-time financial data, giving businesses and their bookkeepers instant access to up-to-date financial information. This can help to identify trends and patterns in sales, allowing businesses to make more informed decisions.
Improving cash flow management
Another benefit of going cashless is that it can improve cash flow management for small businesses. Electronic payments are processed quickly, meaning that businesses can receive payments more quickly than with traditional cash transactions. This can help to improve cash flow, allowing businesses to pay bills and expenses on time and invest in growth opportunities.
For bookkeepers, this means that they need to be proficient in managing cash flow, including monitoring accounts receivable and payable, tracking expenses, and forecasting cash flow. This requires a deep understanding of the business’s finances, as well as the ability to use accounting software to manage cash flow effectively.
In conclusion, the move towards a cashless economy in New Zealand presents both challenges and opportunities for small businesses and their bookkeepers. While businesses need to adapt to new payment systems and be vigilant in managing the risk of fraud, going cashless can also help to streamline bookkeeping processes, improve cash flow management, and provide real-time financial data. By embracing the shift towards a cashless economy and investing in the necessary technology and upskilling, small businesses and their bookkeepers can reap the benefits of this growing trend.