In this month’s Fintech Friday, we provide our digital advisory team’s key takeaways from Xero’s annual conference, Xerocon, and reiterate why there’s a lot to be excited about for UK SMEs.
The events industry was one of the biggest affected by Covid-19. Yes, they adapted by hosting well put together virtual events but you can’t beat the buzz you get from being in a room full of likeminded people, all striving towards the same goals.
That is why we are so grateful to have been attendees of Xerocon London (20-21 July 2022). It was challenging getting there with the UK facing the hottest weather on record but oh so worth it when we got there.
To condense all that has been learnt into one blog is impossible but here are some of the key highlights that we think will be of value to the small and medium enterprises that we work with.
Look at the outputs
When we attended Xerocon in 2018, the focus was very much on the input side of accounting i.e. how to automate the process of capturing information in the account’s software. Dext Prepare (then know as ReceiptBank) was one of the main sponsors and we were blown away by how simple it was to digitalise the whole expense and payables function, saving our SMEs tons of admin time as well as a whole lot of paper.
This year the focus was very much on the outputs and how Xero has evolved into a valuable reporting and analytics tool. Of course, the inputs and the quality of data are still important but, having nailed that, SMEs now have the opportunity to log into Xero and get a better understanding of their numbers. Get your dashboard set up correctly and just a quick glance of Xero should tell you a story of how your business is doing. Get to know the reports and analytical tools and suddenly you have a business management tool, previously only available to larger businesses that had invested vast amounts in their accounting software.
The cashflow crunch
According to a recent study undertaken by Xero, 94% of UK businesses experience one month of negative cash flow each year while the average small business is cash flow negative for 30% of the year.
The first step in improving cash flow is to know your numbers. Use features such as the business snapshot or Xero analytics to get a good insight into the company’s current cash position and projected cash flow.
The second step is to take action. What could you do to improve cash flow today? Are you using automatic invoice chasers to chase your customers for payment? How easy is it for your customers to pay you? Would it be worth adding a payment service onto your invoice (this usually gets you paid twice as fast)?
A healthy cash flow is key to business growth so start allocating time to this today. Customise the Xero dashboard and get familiar with the ‘short term cash flow’ and ‘business snapshot’ tools in Xero.
Know your map
As a team we don’t often enjoy commuting, but on the train journey back from Xerocon we were buzzing. The journey home gave us uninterrupted time to discuss where we started as a practice on our digital journey, where we want to be and where on the map we are now.
As Deborah Meaden said in her keynote speech ‘You’ve got to look back to see how far you have come’. She also pointed out that what blocks people is an inability to read the map. So, our advice to business owners is to put some time aside to plan your journey, review the steps taken so far and make sure you know what direction you are heading. Get both your staff and your customers onboard. You may find a more inspirational setting than an Avanti train carriage but, wherever it is, ensure that you and your team get that uninterrupted time for planning.
Digitalisation is inevitable so embrace it. At Harold Sharp, we have made it part of our year-end process to carry out a digital review of each business that we work with. This is important due to the fast pace that accountancy is changing and with new apps hitting the market each week, we need to ensure that our clients are taking advantage of the tools out there which will help their business to create efficiencies and grow.
The app marketplace in Xero works by allowing businesses to customise their accounting systems, adding on features which are relevant to them. This unique ability to craft your system can be a real strength. In fact, Xero cited that those small businesses in the UK that connected 5 or more apps grew their sales by 4.3% compared to those that did not which saw a decline of 3.4%. With more than 50 app partners exhibiting at Xerocon this year, we have come back well placed to offer our clients advice in this area.
Make sure your accountant is onboard
As accountants in this digital age, our role is changing and we are now empowered with the skills and tools to be business advisors. We can check in with clients anytime, anywhere and view up-to-the-minute data on their business. We also have analytics and reporting tools to give us clarity on where the business is on its roadmap. And, above all, here at Harold Sharp we have a real passion for helping businesses achieve their full potential and to run their business smarter. So, use us wisely and together we can build a beautiful business.
Although this blog focuses on the ‘technical ability’ side of Xerocon, there was also a much softer side to with a heavy focus on modern leadership, wellbeing and sustainability which we are also taking back to the office. As your accountants and advisors, we are uniquely placed to discuss business obligations that go well beyond the numbers. To speak to us, call us on 0161 905 1616 or email us on email@example.com.