We all look for ways to do more with our time. So we can use our time efficiently to move our business forward.
If you are anything like me though, days go by in a blur. We look up from our desk at 18:00 and wonder where has the day gone. The same applies to our teams. Everyone has great intentions but gets bogged down with mundane routine parts of their job, that although important and critical, are not driving the business forward.
While whirling away at our everyday tasks we often forget to look up, take a look around and see how the world has moved on. Are there new ways of working, new ways of doing things, a new technology that could help us do mundane tasks quicker, more efficiently, more cost effectively and with better quality?
Running your bookkeeping can be one of those tasks that take up an inordinate amount of time, something that has to be scheduled. Something that is critical, but something that takes time. Bookkeeping is also one of the areas of modern day business that has been revolutionised by technology.
Throughout this article, we will explain how modern day technological advancements in financial accounting have now become mainstream. These advancements are not just available to large business but every business type from sole trader through SME up to large corporations.
Take a moment to think about the daily grind of bookkeeping for your business. The key tasks: data entry, invoice filing, receipt filing, bank reconciliation, storage of paper, payroll, etc.
Wouldn’t it be great to have a technology solution that will help those processes and tasks? Solutions that allow for easier data entry, automated bank reconciliation and electronic storage. How much time could you save each day, week, year? What else could you do with your day?
How would you like to access your bookkeeping system from anyplace at any time? The modern day ‘cloud‘ accounting solutions are accessible via a web browser from any internet-connected device – PC, laptop, smartphone, tablet, etc. Think of the freedom and benefits this offers.
Wouldn’t it be great to be able to give access to your accountant to all of your financial business transactions, without leaving your desk? No more backing up software files to CD or DVD, no more sending huge boxes of paper receipts. Just give your accountant a login to your accounting solution and they will have access to all of your transactions from anywhere at anytime. There are huge benefits for your business, but also massive benefits for your accountants. Ultimately they can work on tasks for your business quicker, with all the information they need to hand.
Modern day bookkeeping and financial accounting solutions are creating immense value for all types of companies all over the globe right now. It’s time for you to take a deeper look.
So let’s look at some of the solutions available.
Most modern day financial accounting software systems and the ancillary products are now usually cloud based systems. A company hosts them, and you access the system via an internet browser just as you would any other website. The systems are secure and robust, and the vendor takes care of all the hardware, software, upgrades, backups, etc. In summary, you rarely have anything to worry about from a technological angle.
You only pay a small monthly license fee based on the amount of users of the system your business will have and in return you get access to the accounting solution.
To fully leverage the new technology available there are several components that make up a reliable, robust, modern day accounting solution:
- The core financial accounting and bookkeeping software – the part that allows you to enter your transactions against your ledger, run profit and loss reports, keep control of creditors and debtors, account for VAT and let you know how your business is doing from a financial perspective.
- Receipt / Invoice Scanning – this allows you to move your paper storage and records from paper and vast filing systems to all digital files stored and accessed online. You can now scan your receipts and invoices and keep them electronically. Solutions are available for scanning from a smartphone right up to high volume scanners. Most of these receipt scanning solutions either will come as part of your core online financial accounting and bookkeeping system or will integrate with it.
- Cloud storage – there are always files, documents, etc. that need to be stored electronically. Cloud-based storage solutions are now really mainstream and offered by a host of well known providers. You can now store all of your documents in the cloud so they are again accessible from anyplace at any time with an internet connected device. These storage solutions also usually integrate with your financial accounting solution too so that you can cross-reference documents against your clients, suppliers, etc.
- Tracking Time / Billable Hours – Tracking time is critical in many businesses. If you are a service business you will usually charge for time spent working for a client. Therefore, time tracking and billable hours tracking are critical for accurate customer invoicing. Time tracking is also important for other business types too. It allows you to work out the profitability of projects more accurately and ensure the best allocation of resources. Cloud-based time tracking solutions are sometimes built into cloud-based financial accounting systems but are also available separately (with integrations to the accounting solutions). They allow employees to quickly and easily record time spent on a project, from any place, even from a phone. There are no longer any excuses to not fill in the ‘timesheet’.
- Dashboards – sometimes, especially if you are running a business, you just want a snapshot into the health of your business at that time. How are your sales going, what is your profit and loss year to date, what is your creditor and debtor position? To satisfy this need there is a multitude of software solutions, some integrated, some not, that will give you a dashboard for your key indicators for your business. The dashboards are usually customisable, so you can focus them on what is important for you. You can use the dashboards to identify trends (positive or negative) and then drill into the details when you want to take a closer look.
- There are a growing number of other solutions available too – software solutions for financial modelling, specific industry solutions, etc. while the focus of this article is financial accounting biassed solutions, it is worth mentioning the availability of other software to help automate and enhance other areas of your business. Take a look around; you will be amazed at the advances that have been made in the last five years.
Costs are always a consideration regardless of the type of business you run. The good news is cost of software has decreased dramatically over the last few years, and almost all software is now within the price range of even the smallest business.
Long gone are the days where buying software meant probably an equivalent amount of spend on server hardware and backup solutions. Most modern software is now accessible over the internet, and all each user of the software needs is a web browser and internet connection. The software providers now have the responsibility for the hosting, server hardware, backups, etc.
Another positive is that the upfront cost of software has virtually disappeared in most industries. The majority of accounting software these days is sold on a monthly subscription basis and licensed on a per user per month fee basis.
Obviously like with most things in life the more (in this case functionality) you want, the more it will cost, but, the extra cost is limited and is tiny when you weigh against the massive gains the software will bring.
Starting solutions for accounting software that covers the basics start at around £7+VAT per user per month ranging up to around the £25 – £30 +VAT per user per month.
Functionality does vary by vendor – but you will be able to get at least the core accounting functionality, with reports VAT management, integrated bank feeds, etc. within the above fee range.
Adding in further integrations like receipt scanning and cloud storage could add £10+ per month, but again well worth the investment.
Modern day cloud based accounting solutions help to automate and streamline your key accounting processes. Compared to the manual way of conducting the same process, you will see the return on investment from these solutions is impressive.
Financial data needs to be secure. That’s a given. Your business depends on it. You would not give your businesses deepest financial details to just anyone.
The good news is all cloud-based financial accounting software providers know this. Security of your data is their number one concern. They go to great lengths to make their applications secure.
Most providers use security standards and encryption that is equivalent to those of banks. Quite often the data you store in these cloud-based systems is as secure as it being hosted internally within your company.
Although security should always be a concern and prominent in your mind, you can be sure that these modern cloud-based systems are very secure.
There is a caveat though. Just as if the data is stored in your local business environment the data stored in the cloud is only as secure as the principles you use personally. So always use strong passwords (a mixture of characters, letters, numbers with a combination of uppercase and lowercase), never share your password, never use the same password for more than one system.
If you ensure you follow security best practices, your data will be much safer.
Data in silos is often pretty limited in value. Although perhaps this is not as true for financial accounting software, it is important that at least some of the data in your financial accounting system can be shared with other systems and vice versa.
Most cloud-based applications now have API’s. In simple terms, this means that they allow software to software relationship with other cloud-based systems.
Let’s imagine you have a cloud-based CRM system. When one of your sales team wins a new deal, you wanted the details of that new account (name, address, email, telephone number, etc.) to be passed directly to your financial accounting system, automatically, without manual intervention.
Well, this is one small example of easy automation and easy integration. Providing you are using a modern cloud-based CRM system and one of the leading providers of cloud-based bookkeeping software this type of automation is often available as a standard feature and can be setup in less than five minutes.
There are hundreds of integrations available for some cloud based bookkeeping solutions. From CRM to Customer Support, to messaging applications, email notifications, etc. Integration allows for massive amounts of automation and is just one of the huge range of benefits this new era of cloud based software has.
So are there limitations? Of course. But not many.
When you subscribe to one of these cloud-based services, you must be aware that it is a standardised service. Although some providers allow individual customizations, most features are standard across all of the vendor’s customer base.
This standardisation has advantages and disadvantages. You get to benefit from standardised systems and if features are added for one customer they are added for all.
The disadvantages are if you want something slightly different, than the norm, this may not be possible.
Our advice would be to set your expectations accordingly. We work with many clients and have never come across one client where the features of one of these cloud-based accounting systems were not adequate for the customers needs. More often than not there are far more features than needed.
The only other real limitation is that as these systems are cloud-based an internet connection is necessary to access the system. These days however unless you are on a plane regularly and have no internet access this is never an issue.
If you are convinced cloud-based bookkeeping is the correct way to take your business forward you should start to think about how you can implement it within your business without massive impact.
We have a series of recommendations for you to make the process easier:
- Write down your minimum requirements. What must a system do for your business for it to deliver value? Start with the ‘must haves’ and then layer on the ‘like to haves’. Importantly write it down. It will be a useful reference when it comes to vendor selection.
- Assess the marketplace for suitable vendors. Use Google as your friend here. Search for providers.
- Shortlist providers that appear to fit your requirements.
- Talk to your accountant. Although not 100% essential it is an awful lot easier if your accountant is familiar with the solution you choose. Quite often your accountant will be very knowledgeable in this area. Listen to them, they will have seen many clients go through the transition.
- Sign up for a free trial – most cloud-based accounting providers have a free trial available. Use this to your advantage. Sign up for trials for the providers on your short list. Make sure the solution delivers what the providers say it delivers. Make sure it is intuitive and easy to use.
- Decide if you will manage the transition in-house or you will outsource the implementation to a third party, or a mixture of both.
- Treat the implementation as a project. Have key dates in mind, resources, be clear on who does what when.
- Choose your provider and make the commitment to turning your trial account into a full working live version.
- Choose the key dates. Will you migrate at the end of a financial year? What historical data will you take across to the new system etc.?
- Start the migration – setup your chart of accounts, client records, supplier records, etc. ahead of time. Again involve your accountant early. They will be able to advise on the optimum setup for your business.
- Invest in training – training is the key to realising your investment. Make sure your training is customised to the people and their roles within the business and importantly their particular use of the system.
- Make it a collaborative project. Make sure everyone feels part of the project team, is aware of what is expected and above all the benefits it will bring to them as individuals and the business as a whole. This buy-in from the team is crucial to get full use of the system and leveraging everything it has to offer.
- On cutover to the new application make it an event – communicate well. As a business owner communicate your expectations.
- Have support on hand – make sure you can get questions answered quickly. There are bound to be things you are unsure of or elements for which you will need help.
- Review – after implementation and go-live schedule a time to review. How did the project go? Is it delivering the benefits expected? Is everyone trained? Is everyone using the system? Are there any outstanding tasks etc.
- Regular ‘move forward’ sessions – when your new system is implemented schedule quarterly meetings where you talk about more you could do with the system – further integrations new reports, new ways of working. Constantly try and push forward. Don’t let the system stand still.
Choosing A Vendor
The myriad of cloud accounting solutions and vendors in the marketplace sometimes make choosing the correct solution appear complicated.
Start with a list of your requirements and match each vendor against those requirements. If a supplier is a 90% fit but there are just a few elements missing that can’t be provided, don’t worry. Usually, these gaps can be filled with plugins or integrations to the vendor’s system. So try to get as close as you can to your ideal solution and then look for additional components that may help tick all of your boxes.
Do some due diligence on the vendor – how large are they? How long have they been in business? Do they have strong financial backing? How many clients do they have? While size is not everything it is important to know that your chosen vendor is not going to go out of business anytime soon.
The most important element is does the solution feel right. Look through the vendor web sites, check the website content – is it helpful? Does it look professional? Look at their support pages – are they helping people quickly? If it feels right to you, then you are probably not too far off the best solution for your business.
As we mentioned above – when you are reasonably happy, start a trial. Most vendors offer 30 day free trials where you can take a hands-on look at what you will get should you move forward.
What if I want to move from a cloud-based accounting solution? Can I take my data with me? – Yes, every vendor we know of allows full export of your data. Though you should obviously check prior to committing.
What solution does DKP recommend? We recommend Quickbooks online. We are an authorised partner for Quickbooks and we like this system, it is simple, straightforward to use and is feature rich.
Can I import historical data into a cloud based bookkeeping service? Yes – usually you can use import various formats to get data into the cloud-based solutions, and some vendors even offer a migration service.
In wrapping up, we firmly believe that the technological advancements over the last few years have meant incredible strides forward regarding financial accounting solutions for business. You owe it to yourself and your business to take a look, see the benefits for yourself and then start to implement those benefits in your business. You will not look back.
Good luck with your project and please do let us know if you need help or advice at any stage. We are here to help and can be contacted here.