By James Poyser, co-founder of inniAccounts
No matter what stage your company is at, building efficiency into your approach to doing business will help you keep a tight handle on your finances, and in turn accelerate your performance, rate of innovation and open up opportunities for growth.
One of the best ways you can keep your overheads down is to use the cloud. Today all sorts of business applications are being developed to take advantage of the technology. The real growth area is accounting.
Many of the articles written to help you make a decision on which cloud accounting package is best focus on what the technology should deliver. While that’s important, there is far more to it. This guide will help you navigate the practicalities of adopting cloud accounting in terms of managing your business not just your finances.
What’s the long-term plan? If your goal is to have a large customer base and take on employees then you need to think about how an accounting service will handle your growth. How easy will it be to run payroll, file expenses, integrate pensions, and invoice in real-time as the demands go up? And will you be able to see your financial position, cash flow and tax position without having to run complex reports? Having built-in real-time flexibility could make a difference of thousands of pounds upwards.
Security, continuity, mobility. Once you know what you want in the short and the long-term you can start to assess the packages. Top of the list should be access to your service anytime, anywhere – at your desk, on your mobile – and security. Your records should be safe and provision should be made for ‘force majeur’ – if you doubt that the supplier could handle a simple power cut then you should be looking at other solutions.
How will it help you manage external change? This is an important one as change can be forced upon you. The Summer Budget introduced an ambitious Living Wage – how will you cope with that sort of change, and how could you plan for it now? That isn’t something that can be done by number crunching alone. It will require professional advice so you navigate policy correctly. Make sure you’re working with a partner that will do the thinking for you and steer you to decisions that make commercial sense and can be planned for.
Take advantage of trials. Put your shortlisted tools through their paces. The trial should show you how easy it is to use the solution and demonstrate how little help you need to run the day to day. The most important help should be the advice you’ll get to grow the business, and help you keep the your bank balance and the tax man’s happy so test that at the same time.
Select a solution that’s intuitive. The whole point of adopting a software as a service model is that you will save time and energy that can be invested in what you do best. If it is clunky and hard to navigate then it will slow you down. Really, you shouldn’t be aware of the technology, and the smallest of things such as error messages written in plain English can make the biggest of differences.
Understand the model. There are lots of ways accounting services can work and it’s important to assess which model is right for you. For example, some follow an indirect model whereby the software developer uses a network of accountants to sell on their behalf. This keeps the software price down but does mean that the accounting wrap , extent of the service you get and its price will vary from accounting practice to practice. You’ll not only be weighing up the package but also the accountancy.
The other model is one that combines software with an accounting wrap in one. This usually means that the software will be constantly updated according to customer feedback, which will give you a greater ROI as you’ll be able to benefit from innovation directly. You also get hands on professional advice when you want to do financial planning.
Get personal. Running a business isn’t just about today’s balance sheet it’s also about the future numbers, not just of your company but for you as an individual. For example, if your game plan is to grow your business and exit for early retirement then understanding how you manage Capital Gains tax from the start will greatly influence how much you take home at the end of the sale.
You won’t be able to achieve that sort of planning through software alone, so choose a provider that takes the headache out of the humdrum and puts effort into the long-term. And look for one that values relationships and gives you dedicated consistent support from the same qualified individual. I’d underline qualified at this point, make sure they are not trained to perform a support role but hold accounting qualifications.
Price should be transparent – think keen not mean. Check that the headline price is the price you will pay and that there are no hidden costs for things like tax returns for example. As a general rule of thumb, the more transparent the pricing, the better and more keen the service will be. It’s also true that you pay for what you get. Sometimes a lower price means you’ll make a sacrifice on the quality of professional support, guidance and advice you’ll receive, or there will be restrictions on the features you can access. If the supplier appears to be running a lean machine, then it could be an indicator that it’s also being run as a mean one too.
These eight checkpoints are all designed to dovetail your business plan. You shouldn’t invest in anything unless you know it is fit purpose and will grow with your business. By taking such a pragmatic and long-term view of moving to cloud accounting you can be sure to get return on your investment and achieve the financial and operational efficiency gains it promises.