Welcome to the realm where accounting meets technology, reshaping the way small and medium-sized businesses handle finances. In this straightforward guide, we’ll dive into the impact of accounting tech and how you can apply it to your business in a no-nonsense manner.
If you’re looking for solutions to common accounting challenges or keen on delving into financial reports, technology has your back, and we’re here to help you make sense of it. Navigating this tech landscape might seem daunting, but our aim is to simplify the process for you.
The challenge: your clients are paying late
Cashflow is the lifeblood of any business. If your clients don’t pay their invoices on time, this can have a knock-on effect on your business operations and overall financial health.
Last year, analysis from cloud accounting provider Xero showed that around half of the invoices issued by small businesses were paid late. Over one in ten (12%) of these invoices were still outstanding a month after they were first issued. If you’re facing this problem in your business, you may struggle to pay your own bills.
This can lead to strained relationships with suppliers – and you could even incur costly late-filing penalties from HMRC. So how can tech help?
The solution: automated invoicing
While there’s no quick fix for late payment culture, using tools like automated invoicing can help minimise the impact on your business.
Automated invoicing allows businesses to schedule client invoices in advance at a specific date and time. This not only saves you time manually issuing invoices yourself but also encourages prompt payment by getting invoices to your clients as early as possible and chasing them for payment so you don’t have to.
If you regularly use repeating invoices for customers, you can offer auto- pay/direct debit as an option. This allows customers to set up automatic payments for goods or services that you regularly invoice them for, ensuring money enters your business even quicker.
The challenge: you spend too much time on accounting tasks
Good financial management calls for accurate, up-to-date business records — but staying on top of your books can be time-consuming. If you and your team spend hours on routine recordkeeping tasks, you may not have time to focus on bigger-picture strategies.
The solution: track business transactions automatically
Entering your financial data doesn’t just take up a lot of time — it can also increase the risk of human error in your accounts. Linking your bank account to your accounting software means that transactions are tracked automatically, reducing manual entry and giving you more time for essential tasks. Recent tech upgrades mean your software can even categorise transactions, saving you even more time.
The challenge: you want to make better business decisions
Effective decision-making requires an in-depth understanding of your company’s fiscal health. If you want to implement a solid business strategy, you’ll need to do much more than balance your books and meet your obligations.
The solution: combine technology with accounting experience
Grant your accountant access to your cloud accounting, and they become collaborators on your team. Working on real-time data means they can provide accurate and timely support, making collaboration seamless. Your accountants should also be up to date with the latest industry trends and economic changes, so they should be able to interpret the data for you so you can make better decisions.
So, here’s a quick recap, and remember, if you’re not there already, it’s never too late to start.
■ If you want to future-proof your business, you should embrace technology – but you also need to understand its limitations. Do your research and speak to your accountant before making the final decision.
■ Consider add-ons – do you use payroll, have an inventory system, or need a time-tracking function? Each business is different, so there are thousands of solutions out there that can integrate with your cloud accounting apps.
■ Always opt for a cloud-based solution for easy collaboration and access to live data.
■ Automate financial processes to free up your time.
■ Ask for support from your accountant – if your set-up is right from the start, it makes your life and theirs easier in the long run.
We’re here for more than just crunching numbers. Whether untangling tax queries or exploring new tools, we’re your go-to support team. Count on us to make accounting software straightforward and effective.
For any queries, contact Sarah Kite at skite@cottonsgroup.com, who will be able to advise on the best technology solution for your business.
Find out more at www.cottonsgroup.com
