The change which has taken place in the world of accounting software over the last 10 years has been nothing if not seismic, as innovative cloud-based solutions have transformed how people work. It’s not just about the benefits of being able to work anywhere and on any device. There are literally hundreds of apps which, when linked with your accounting app, will revolutionise not just how information is collected and entered, but, maybe even more importantly, the insights which can be gained which then inform the decision making process.
But with so many options and apps available the choice can be bewildering, and often the last thing any business wants to change is the accounting system. After all, it’s probably been running quite happily in the background for years. The accounts team are busy, entering the information from all those bits of paper which they’ve had to track down, but the reports are produced (eventually), the VAT Return gets filed on time and the bank is happy. It’s a bit annoying to have to download information into spreadsheets and then analyse it because it’s not readily available in the format which gives the necessary insights – but it’s been working that way for years, so why change?
It’s a fact, any change is going to be disruptive – but moving your accounts to the cloud really can make a profound difference to your business, and if the transition is planned and well-executed then the benefits will outweigh the short-term disruption.
Let’s have a look at a typical scenario and compare how changes to processes through the adoption of cloud technology could transform your business.
You’re running a sales business, with a team on the road, following up leads, meeting customers, generating sales, incurring expenses; information is sent back to the accounts office for processing – sales invoice production, stock allocation, expense claims, credit card receipts. The accounts team collect all this information, along with bills which have arrived in the post and via email from suppliers. Everything is then entered onto the system, and the paperwork filed for future reference. The bank account is reconciled, weekly or monthly depending on time. There’s always a peak in activity around the month end, with the payroll being processed once all timesheets and expense claims have been received and approved. Statements are sent to customers once a month, once the receipts have all been posted, and then credit control call customers with overdue balances. You’re not sure how much profit you’ve made this year – you thought you were doing OK, but the bank balance isn’t as healthy as you’d expect. The reports don’t really give much information, but to find out the detail you have to go through all the files to track down documents.
What are the problems here?
• Sales invoices are not going out to customers on a timely basis, thus delaying receipt of monies owed
• Stock levels are not up to date or easily accessible by the sales team, running the risk of committing to orders which can’t be fulfilled or holding too much stock
• The bank balance on the accounting software doesn’t match what’s at the bank, so cash availability can’t be determined easily
• The accounts team are spending time chasing receipts from overdue customers
• The level of manual processing is time-consuming, and at busy times is more likely to lead to errors
• Time is spent filing paperwork – and then going through it to find information when queries arise
• Reporting is late and not detailed enough to give real insights for informed decision-making
So what cloud-based apps are available to really make a difference?
• Accounting – linked to your online banking, updated in real time with the information integrated with other apps listed below. Unlimited users have access rights dependent on business requirements. They can work anywhere, on any device, at any time. Credit control automated within the accounting app to send out reminders and chasing emails
• Inventory – stock levels tracked in real time; sales invoices raised by the sales team on the road, which feed into the accounting app
• Expenses – photos taken of receipts as the expense is incurred, added automatically to expense claims which can then be approved as required
• Timesheets – filled in throughout the month and authorised so that any variances can be reflected in the payroll
• Bills – automated data entry for supplier bills, including automatic download of bills from online portals such as utilities, mobile phones etc. Copies of all paperwork are attached to the online transaction for ease of viewing should queries arise
• Reporting - synced to your accounting data to produce up to date customised reports, including cash flow forecasts
By using a combination of apps as described all the information required by the team will be accessible by them from wherever they are; the accounts team will benefit from efficient working processes and management will have up to date real time information at their fingertips.
Most of the apps listed above can be used by any business, whatever the nature. But if you have industry specific requirements then those needs too can be met. Whatever your needs - e-commerce, retail, property rental, hospitality, professional services, time recording, construction, manufacturing, tourism, not for profit – the list goes on – there’s an app for that!
Using a combination of apps, all talking to each other and exchanging information, can result in a system closer in nature to some of the full Enterprise Resource Systems available, – but at a fraction of the cost. Scalability can be achieved by adding in functionality as and when required, and of course you can remove it as well, should your business needs change. And you get the other benefits of working in the cloud e.g. no need for expensive hardware upgrades and always working on the most up to date version of the software.
It’s important to understand that cloud software is not about taking what you do now and just entering data into a different software package. It’s about both gaining efficiencies by adapting your business processes to the new improved technology and gaining real time insights to help you and your advisors grow your business. Yes, change can be daunting – but the long-term benefits will far outweigh any short-term issues.
To find out more please contact Hilary Dyson, (Hilary.firstname.lastname@example.org) or your usual AAB contact.
To find out more about our Cloud Accounting Team, click here.