What can Cloud Accounting do for my business?
With most of the information now on the cloud, your discussions with the accountant can now be elevated to the next level - focusing on strategic goals for the business. You identify key challenges to business acceleration, discuss and mitigate financial risks to the extent possible and have a more positive, open relationship with your finance person.
The only thing that breaks this flow of things? That folder on the side of your desk space called “Receipts”. Open that at your own risk – scores of paper scraps usually fall out. They range from coffee shop bills to scribbled notes from cabbies. The only thing you want to remember from these are the conversations you had and the people you met – not; the need to squirrel them away “to be passed to the Accountant”
The big advantage
Most people I know are very comfortable with their tech. Banking apps are common, we check bank balances easily, comfortably and on the go. This can be achieved with your business numbers too - with a bit of process to get things flowing correctly.
Many small business owners I know are constantly worried about their monthly finances. They don’t have a way to see the business numbers apart from what’s in the bank. There are constant lingering questions., Am I actually making money? What is the opportunity cost of me doing this business? As much as you’d like to think of a business as separate from the individual, my experience as an entrepreneur has taught me this is far from the truth. It’s very personal.
The risk you take to come out of a comfortable monthly wage is intensified when you have personal commitments.
Certainly - knowing the numbers that make or break your business should be a priority.
A collaborative platform
When it comes to keeping your transactions accessible, it’s hard to beat the cloud. It’s easy to set up and run and most of them come with handy phone apps.
Top apps like Xero also claim enterprise grade security. Once you have the relevant information captured in the system, accessing them to make informed decisions become habitual.
We had a client who came from a traditional system and had to put aside hours and hours to prepare financial reports for their investors. Having a legacy system was a large part of the problem. It was near impossible for them to give the right kind of access across the Board. This would have enabled people to get the information they need direct from the software - when they needed it.
Workflows that encompass complex relationships
A large part of the work we do is to customise layouts and what general accounting software provide to suit a company’s specific needs. Businesses today more than ever have broader needs – irrespective of their size. There is hardly a start-up or small business I know, that does not have global business relationships – be it customers, suppliers or general support systems. You need workflows within a business that accurately reflects this.
A lot of young companies have adopted cloud as a part of their workflows, simply because they identify that having one system is not bringing the right efficiencies. And these businesses have transactional needs that differ only in scale; not complexity from their larger counterparts.
Selecting an appropriate cloud platform allows for more specialist connector apps to be integrated to it. This in turn can create virtual finance departments that mirror those from larger enterprises.
Sholto Macpherson, An Australian business tech journalist, articulates why SAAS companies like Xero have achieved record growth levels serving the small company niche sector. In his 2017 article for CPA Australia, he writes, “Accounting software has moved beyond crunching bank reconciliations. It can now connect you to other business software and financial services, and automatically feed data to add-ons to update information and cut out tedious administrative work”
The Xero eco-system for example now boasts over 500 specific apps that cater to a variety of functions and industries. And this number is growing.
Enhances the personal touch and strategic discussions
With most of the information now on the cloud, your discussions with the accountant can now be elevated to the next level - focusing on strategic goals for the business. You can identify key challenges to business acceleration, discuss and mitigate financial risks to the extent possible and have a more positive, open relationship with your finance person.
The final word
Ultimately a finance function cannot centre around a system alone, you always need people to reiterate and make sense of the numbers in relation to the business as a whole. And the cloud allows the focus to be on the facts that add value to a business. It allows numbers to be a natural part of the decision-making process- not the hindering, stuttering agenda item that founders hate to get involved in.
Note - This article was first published in spotonmagazine.com based in Bournemouth