The Evolution of cloud software for the finance process over the last few years
Since beginning my career in accounting 6 years ago the industry has seen major dynamic changes. With the explosive growth of Xero and other cloud accounting software it’s safe to say that we are saying goodbye to the days of the traditional financial services business model. Gone are the days where SME business owners would have a locally based accountant, recommended to them by their family or network, to whom they would hand over their paperwork to in bulk for them to handle their accounts and taxes.
There have been two main driving forces in the growth of cloud accounting. First, there has been a massive increase in flexibility and opportunity: nowadays the business owner, and the accountant can be in opposite ends to the country. This flexibility creates far more opportunities for both parties to grow their network base. Business owners can now run their business from work, home, or even on the go.
The other main driving force is that the underlying data is now more readily available and timely. With desktop accounting, it was a hassle for clients to get records to their accountant, so that would usually only happen once a quarter at best. With cloud accounting software being connected to bank feeds and other financial tools, all the data is synced at least once every 24 hours.
The introduction of cloud based accounting has allowed us to access information quickly and easily, presenting the opportunity to give advice weekly, monthly or quarterly, rather than annually.
The benefits of using cloud accounting to its full potential and how we have used these to assist clients?
Cloud accounting has been available for years now, but what I tend to find with many new clients is it is not being used to its full potential. Efficiency is key, but the duplication of work seems to be common. What an accountant should, and what we strive to do, is work with the client to understand the business and create a seamless accounting process for the client producing clean records at minimum cost and time. Xero and other accounting packages offer thousands of add ons, both industry specific and general that can be integrated with the accountancy package to streamline the process. The accounting software should always be the heartbeat of the operation and the add-ons that are available can add huge value in addition to just the numbers.
We have integrated many of these add-ons into our clients’ businesses to refine their accounting process and with there being so many to choose from, it allows us to tailor it specifically to their needs. There are so many businesses that may operate a job management system, a stock system or even a simple cash flow spreadsheet away from the accountancy package, and what cloud accounting has allowed us to do is implement an add on specifically for these tasks, thus saving the client time, which can be invested elsewhere to grow the business.
The future for cloud accounting?
From last April, all UK businesses that had a taxable turnover above the VAT threshold of £85,000 were required to use the government’s Making Tax Digital (MTD) service to keep and submit records digitally. This was the beginning of what will ultimately be a much more efficient tax-collection system.
Once the full MTD initiative has been implemented, probably by around 2023 or later, self-assessment as we know it will fade into history and businesses could be filing quarterly tax returns automatically from their accounting systems. It is now as important as ever to have an accounting system that seamlessly integrates with the business and collates all of the available information.
The accounting industry, like many others is forever changing and it is imperative to have an accountant that is adapting with it too.
Here at Fabulous Financial we pride ourselves on the service that our team of highly trained and qualified finance professionals offer to a range of clients. We take the time understand your business, what you want to achieve and how we can assist you along that journey.
Be in business for yourself, not by yourself. Contact us today, so that we can support you on your journey.
About the Author
Connor Hehir is a Finance Associate at The Fabulous Group. Connor began his career in finance as an apprentice, completing his AAT qualification and continued his training through to ACCA which he hopes to complete next year. Connor has a wealth of experience on Xero and Quickbooks , he is a certified advisor for both and works closely with clients to begin using cloud based packages and provide ongoing support. Outside of the workplace Connor is a keen golfer and plays off a handicap of 4.