No matter what sector you operate in, or type of business you run, whether it’s a start-up or an established business, the keys to growth are understanding how your business makes money and in making judgements on the future direction of your market.
By Hazel Burt, Partner and Head of Personal Tax Services at French Duncan Chartered Accountants.
Reliable data is paramount in maintaining this edge which leads to success.
The development of cloud based accountancy is having a profound impact on this process. It is enabling entrepreneurs to utilise real time data in their business decision making process. For example:
- Automated data input through direct bank feeds
- Scanning and automatic processing of purchase invoices
- A more direct invoicing process which presents an invoice at the point at which the service is completed
- A real time sales ledger, helping debt management
- More regular management information on profitability and cashflow
- Access to this info at any time, using any compatible mobile device
All these characteristics make for better decision making.
In addition, big changes are on the horizon in terms of tax and HMRC are working on their proposals for Making Tax Digital, including how compulsory digital record keeping and quarterly reporting for businesses and landlords will work. Most businesses and landlords are likely to be affected from 2018.
In the early stages of a business it is important to have key touchstones which maintain your confidence that you are on the right track. The speed and accuracy of this key data maintains the focus in those crucial early years.
For more established businesses cloud based accountancy allows a more structured approach to management information which makes it easier to delegate, while still maintaining the quality of the key management information.
So that sounds great, unless you are an accountant who used to do all this stuff!
It is clear to me that, as a result of this fundamental shift in how businesses access necessary management information, the role of the independent accountant must change and evolve to remain relevant to the business community.
In the past, accountants established their reputation on their ability to meet the compliance needs of their clients in meeting filing deadlines for accounts and tax returns.
In many instances this resulted in annual meetings to discuss management information which was six months out of date.
If clients adopt a cloud based approach then there will be more opportunities to advise clients throughout the year and provide a more pro-active service which focuses more on the future rather than on meeting the compliance needs of the past.
The ability to work alongside our clients, reviewing the same real time data, will provide more opportunities to assist business owners to make the right decisions more often.
So, it is a challenging time for accountants in practice. But, as entrepreneurs will tell you, with every challenge comes an opportunity! The challenge for accountants in practice is to maintain their relevance to owner-managed business in this period of change. To achieve this we need to be knowledgeable about the technology and focused on using the improved information flow to advise our clients on a pro- active basis.
Clacks Business Week sponsors French Duncan will be presenting the Benefits of Cloud Computing for Accountancy at Elmbank Mill, Menstrie 2:30pm on Thursday 24 November. Places at this FREE presentation are limited, click here to register and avoid disappointment.