Cloud Accounting for your Business
There’s never been a more crucial time to get closer to your business’s numbers to make safer business decisions...
At a time when the world of business has been disrupted by COVID-19, technology can help you get close to your important business numbers – profit and cash.
Now more than ever you need to know:
- Your business profitability to date
- Your forecast profitability over the next 3 or 6 months
- Your current cash position
- Your cash position over the coming 3 to 6 months
And almost on a weekly basis, you could do with this information updating.
Through using Cloud Accounting technology well and you will be able to make better-informed business decisions, all because you’re closer to your business’s performance numbers.
If you would like help getting started with Cloud Accounting or would like to improve on how you are currently using your Cloud Accounting system then get in touch with us by calling 01530 833474 or email firstname.lastname@example.org
- It’s no longer possible or desired to physically meet and hand over receipts, files of invoices and other physical records to your accountant or bookkeeper – who wants to (or should have to) handle boxes, files, paper, etc? The health and hygiene issues for both team and clients and the NHS are too important
- The need to be close to all the financial information about your business is greater now than it has ever been. In a time of uncertainty, as a business owner you need to know exactly how your business profitability and cash flow looks now and how it will look in the coming weeks and months. Everyone needs to feel certain about their business’s financial position – whether it’s good, bad or otherwise.
- Knowing how profit and cash looks now and in the future helps business owners (you) make well-informed and well-judged business decisions. And now is the time for good decision making based on financial facts, not guess work
- To successfully seek out new funding requires fast cash-flow forecasting and management accounts. Both of these reports require up-to-date and precise bookkeeping records (getting CBIL approval will require detailed financial reporting)
- As you furlough or layoff staff it might be harder to find people to help you pull these reports together. The technology can help you, your accountant can help you too.
The need to put cloud accounting technology to work for you and your business has never been so pressing.
The Covid-19 turmoil has created a new era for business owners and the way they use technology and work with their accountant.
Use a Cloud Invoice Automation Tool to capture your invoicing and receipts and then send your information electronically:
- Scan in the physical paper documents using a smart device (phone, ipad or pc)
- Set up email forwarding with your electronic invoices attached (PDF)
- Download documents to an agreed digital storage area that is linked to your Invoice Automation tool
- For invoices utilise your Cloud Invoice Automation Tool
- For expense management use tools that photograph receipts (using smart mobile phones) and then help you manage expense claims
- If you already use pre-paid cards simply shift to using pre-paid expense cards so staff don’t need to claim
- Also, use pre-paid cards as an alternative to using Petty Cash
- Use these streamlined processes to submit expense claims weekly or at least monthly
- Choose a Cloud Accounting Platform that you and your accountant will be happiest using
- Choose someone in your business to help manage the implementation and work with your accountant
- Move your historic data across to your chosen Cloud Accounting Platform
- Set up your Cloud Accounting Platform to work with your Cloud Invoice Automation Tool
- Get training on either your Cloud Accounting Platform or your Cloud Invoice Automation Tool so that you can be up-to-date every week
- Work with your accountant to get started
- Link your cloud accounting to a Cloud Credit Control System that will email clients pre and post invoice due date but with you in control of what happens when you want it to happen
- Set up your Cloud Credit Control System to work to your dates and priorities
- Choose when you want to pre-chase (before the due date) for due invoices and the wording you want to use
- Choose when you want to post-chase (after the due date) for due invoices and the wording you want to use
- To ensure your financial reporting is accurate and to avoid chasing customers unnecessarily be sure to reconcile your Sales Ledger weekly as a minimum
- Set up your Electronic Bank Feed into your Cloud Accounting Platform so that you can easily reconcile payments that have been received
- Raise Invoices in your Cloud Accounting Platform as soon as work has been signed off and send to your customers
- Be clear that invoice due dates are correct and clearly communicated on your invoices
- Ensure your invoices have bank details for easy payment and that you link any payment integrations you use
- If you take recurring payments, then ensure your Direct Debit system is in place and that it’s linked to your invoice so it’s easy to match up.
- Choose a Cloud Cashflow Forecasting Tool to synchronise with your Cloud Accounting Platform (be sure to make this decision with your accountant so that you’re able to support each other)
- Reconcile your bank and sales/purchase invoices every week as a minimum (some businesses do this daily)
- Ensure expected dates (not raised date or due date) on your invoices are updated weekly to give you confidence in the accuracy of your cash flow forecasting
- Work with your accountant to define scenarios (for example - increased/decreased receipts, increased/decreased wages, increased/decreased mortgage/rent, etc)
- Set up triggers to prompt timely decision-making on cash levels, sales revenue levels, profit margin issues
- Monitor your scenarios and triggers weekly to drive your business decisions and your confidence in the cash and profit performance of your business
- If funding is required, then your Cloud Accounting Platform will need to be up-to-date for the timely production of your financial reports for lenders
- You will need supporting cashflow and business forecasts with management and year-end reports, all made easier and quicker by implementing the 5 fundamental tools of cloud accounting
We believe that the five fundamental tools of Cloud Accounting are;
- Cloud Invoice Automation Tool
- Cloud Accounting Platform
- Electronic Bank Feed
- Cloud Credit Control System
- Cloud Cashflow Forecasting Tool
You have choices to make on each of these because there are several options.
It’s important you have your accountant’s support (and guidance) on the decisions you make because you’ll both need access to it and be using it.
- Choose a Cloud Accounting Platform that enables bookkeeping, compliance, HMRC returns and real-time data reporting. You have many cloud-based bookkeeping platforms to choose from. Choose a bookkeeping platform that works for both your business and for your accountancy firm too. Accurate and timely data-input is the key to cloud accounting and requires you and your accountant to work well together.
- Choose a Cloud Invoice Automation Tool that means every receipt and invoice can be scanned and uploaded instantly to your Cloud Accounting Platform. As with your chosen accounting platform that works for both your business and for your accountancy firm too. Accurate and timely data-input is the key to cloud accounting and requires you and your accountant to work well together.
- Put the technology to work so that you can access cash and profitability information about your business every week if you want to (every day if you really want to be that close). If you’re happy with monthly updates on your business profitability, cash and other key measures it still makes sense to set your cloud systems to be up to date weekly.
- This requires your Electronic Bank Feed setting up and weekly bank reconciliation on all invoices and payments so that you can see a true picture of your business every week
- You connect with your chosen Cloud Cashflow Forecasting Tool that helps you quickly and easily predict the future performance of your business
With your accountant work out other ways of using other cloud applications to make your other business processes quicker, easier and more efficient. Your accountant is aware of many more cloud applications that can link to the data in your cloud accounting platform to streamline your business and help you create a business you can operate smarter.