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Have you felt the force of the digital age in your finance department?

24 August 2020
Gavin Hooker
Digital & Tech, Cloud Accounting, Accounting & Compliance, Structuring a Business, Building a Business

Cloud accounting has been talked about for the last decade, however, the benefits of cloud accounting for businesses had not really started making an impact until HMRC’s Making Tax Digital initiative made digital tax a must for businesses from April 2019.

There are still many businesses that are yet to automate or at least change some of their processes so that they are getting the most out of their systems, such as automated bank feeds or collection of invoice payments.

The businesses that have continued to operate like they always have done, have, during the recent circumstances, struggled to meet demand or allow more time to diversify and explore other markets.

So what should be automated?

Well this is different for each business and not everything needs to be automated, but those tasks that do not require a human decision to be made can generally be automated.

The easiest place to start with automation in terms of a business’ finance function, is the bookkeeping. How many hours does your purchase ledger clerk currently spend manually entering purchase invoice details into your accounting software? A better approach would be to get a computer to analyse the data of the invoice and the purchase ledger clerk to check the data that has been extracted and approve the invoice for posting and payment – job done! This gives that staff member more time to take on other duties that the business needs, perhaps those that have been on the “to-do list” for a long time!

Another element is credit control, are you forever chasing debts that are overdue? How easy have you made your invoice for payment would be the first question? Our earlier blogs go through how you can make your credit control system better:

Cashflow problems? How do I build a better credit control system?

How to use Technology to Reduce Debtor Days and Improve Cash Flow

What are the benefits of automation?

Not only is it the time savings that we have alluded to so far, but also there should be a significant reduction in errors. The level of accuracy of machines compared with humans is significantly greater.

A higher level of detail adds real depth to those management reports, which in turn leads to more informed decisions being made. Also by using automation, in the main tasks can be carried out quicker and therefore management information can be made available sooner than before. You are not waiting months after the end of a reporting period to find out how your business performed in that period, it can now be a matter of weeks!

By automating at least some of your finance function, this can improve your business’ adaptability and resilience to sudden changes.

I’m sold, how do I automate everything?

Whilst it may be easy to think that everything can be automated at the flick of a switch, this is not always the case and it is vital to understand how each element of your business works and how automation might be integrated.

There is a vast array of apps available allowing businesses to automate almost everything in their finance function, but not all may work for your business and not all may work together or with your current system.

It is best to sit down and not only plan the switch over a period of time, but also investigate the specific needs of your business and review available apps to find the best ones suitable for your business.

What you’ll end up with is your accounting system at the core with apps integrated into the system either directly or indirectly through other apps. This is what is known as an app stack and each one is different for each business.

How can Friend & Grant help with my business’ automation?

This is an area that we specialise in. Not only do we set up Xero or Quickbooks online and provide training, but we can look in-depth at what your systems and processes currently are and how they can be improved to make sure that you are getting the best from your system, either by implementing additional apps or making changes to your current set up. We will recommend and introduce apps as and when suitable to make sure that processes stay streamlined and efficient.

We will look to make continuous improvements for your finance function and if you wanted to look at new ways of selling, for example via e-commerce, we will work with you to make sure whatever approach you take the data can be automatically fed into your system.

If you are interested in finding out more about cloud accounting and project implementation or are thinking there are improvements that could be made to your current system, contact our cloud champion, Gavin Hooker.

The content in this blog is correct as at 24/08/2020. See terms and conditions.

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