Over the last 15 years, fintech has enabled businesses to get up to the minute information on their finances, using a variety of platforms from laptops to mobile phones.
As a business owner using cloud-based accounting software you should be asking yourself the following questions:
- Do I know what my bank balance is today?
- Do I know how much money is due in from my customers and when it is due?
- Do I know what I owe my suppliers?
- Do I know what my profit was last month?
You may not know the answers instantly, but within seconds of accessing your cloud-based accounting software you should have the answers you need.
Although many people have adopted software, such as QuickBooks Online (QBO) and Xero, over the last five years, we are finding that many still cannot answer ‘Yes’ to the above questions.
For some, the information is readily available from their accounting software and just some training on how to access the information is required. For others, their accounting software is simply not being used correctly.
In our latest Fintech Friday blog, we look at the top 5 mistakes business owners make when adopting a cloud-based software:
- They do not activate bank feeds
With the new open banking regulations, more bank feeds are becoming available each month. If you have not got your bank feed activated, contact us to see if a connection to your bank is now available.
- They do not reconcile regularly
Reconciliations should be done daily or, at the very minimum, weekly. There are many things that can be done to make the reconciliation process easier, such as setting up bank rules.
- They still raise their sales invoices outside of the software
While cloud-based software has a default setting for sales invoices, there is functionality within the software to edit the format of the sales invoices to suit individual requirements. As a worse case scenario, if for some reason the sales invoices can be raised outside the software, they can be automatically imported into the software using an app.
- The processing of supplier invoices is not automated
The inputting of supplier invoices does not have to be a time-consuming task. By automating this process, you will be able to view instantly how much you owe and when it is due.
- The expense process is not automated
Possibly the biggest drain on a company’s time is dealing with paper expense claims. Cashflows are also distorted when employees submit a few months’ worth of expenses in one go. Automating this process will easily resolve this problem.
What’s the solution?
Ultimately, businesses need to stop viewing their accounting software as a tool to produce VAT returns and statutory accounts and, instead, see it as a valuable asset to their business. The last few months have seen the need for up to date information become essential to business owners, and knowing a company’s cash position is far more important than historical profit information.
At Harold Sharp, our commitment over the next few months is to enable our clients to get more out of their accounting software so that it is more than a compliance tool. Follow #morethanacashbook on LinkedIn or Twitter for more tips, tricks and common pitfalls.
If you want to know more about how you can extract enhanced real time information from Xero, QBO or Freeagent, then contact our Fintech Team today.
Concerned about the quality of data input? Speak to us about our digital health check offering – a one-off audit of your bookkeeping to ensure it is running as efficiently as possible.