We’ve all done it – sat in conferences, listening to inspiring keynotes, making notes about things you know will change how you work, how happy and motivated your workforce will be, how much money you’ll make.
Back at the office you tackle the email backlog – and all those thoughts, ideas, inspirations can get displaced by the day-to-day, the mundane. In the last two weeks I’ve attended an event dubbed ‘Coachella for accountants’, another one which most certainly was not, and an engaging food and drink event where the memorable line ‘Nothing tastes like a Scottish tomato’ was delivered.
Plenty to take away from those events, but, actually, despite the very obvious differences, there were common themes. I have worked in the accountancy profession for years, in roles ranging from training with a big firm, self-employed management accountant, software consultant, through to my current role specialising in cloud accounting.
I’ve worked with many different businesses but it seems to me that whatever their objectives (not-for-profit, lifestyle, global domination) each one ultimately faces the same challenges.
They are all built around operational and financial processes.
Those processes should enable those objectives to be achieved, but so often businesses are hindered by those very systems which should be working for them.
Time and time again I see businesses, particularly owner-managed ones, and especially start-ups, who have been so engrossed in the business – the operational processes – that the financial side becomes something to be done later, when the VAT needs doing or the bank shouts loudly for the dreaded MI.
How many businesses have started with a great idea only to founder or, worse still, fail due to cash-flow problems which they didn’t see coming – or couldn’t avoid.
But it’s not just small and medium-sized enterprises – multi-million pound turnover global organisations with highly complex operational processes can still have financial processes which are a mystery to anyone other than the finance team, and are almost certain to include dependency on spreadsheets somewhere, most likely for reporting (or expense claims, we all love Excel expense claims).
And exploration and production businesses, with the need for complex processes such as joint venture and FRS accounting, opt from the outset for complex ERP systems, with the associated high related capital expenditure costs.
The common theme which unites these businesses is the need for reliable financial and operational insights. Without those you are operating in the dark, unable to make informed decisions.
Over the last 10 years the world has changed, with the increase in cloud-based technology impacting on our personal and business lives.
Cloud accounting software has enabled businesses to break free from expensive licensing agreements, moving to subscription-based software. This obviously assists with cashflow but, more importantly, it delivers a product which is technologically-advanced and intuitive to the 21st Century user who is accustomed to being constantly connected through multiple devices.
It delivers flexibility, too. Remember, your accounting system does not need to be a system for life.
Save the capex until you need to migrate to industry-specific software.
And as businesses adopt new technology so too will HMRC.
By now every VAT-registered business should be aware of the changes coming next April, when VAT Returns will have to be submitted through so-called ‘functionally compatible software’. Making Tax Digital (MTD) for VAT will be followed by MTD for other taxes, and businesses need to be ready for this.
Those businesses who have adopted the new cloud technology have nothing to fear. They will always have the most up-to-date version of the software without paying for expensive upgrades. But will those businesses with complex ERP systems, or expensive bespoke systems which have not been updated?
So why ‘No leaves on the trees’? Well, the good thing about winter is it enables you to see clearly because there are no leaves on the trees.
Take the opportunity. Use technology to strip away what’s blocking your view and see what your business needs to make it fit for the 21st Century.
Hilary Dyson, head of cloud accounting, Anderson Anderson & Brown LLP
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