How the cloud transforms workflow and processes...
... from onboarding, to accounting and tax, and beyond
The problem: Accountancy firms struggle to drive a fluid flow of information around their organisation. This can become worse when team members and clients want information on the go. Their technology is often unlinked, and processes can be both manual and inconsistent.
The solution: Cloud-based workflow solutions are able to communicate, share, approve and signoff on information/documents and more – all in a paperless environment. This could be from client onboarding; to managing their compliance needs; through to analyzing client information to provide more valuable, forward-looking, services.
These tools provide accountants:
Ease of access
They don’t require accountants to be in a specific location or environment, and information can be available on any device – mobile or desktop.
No upfront or high overheads
With the cloud there is no pricey, one-time or high overhead cost. It’s a ‘pay as you go’ model.
Low monthly access fees
You can access the appropriate resources for your need at an appropriate monthly fee. You’re not spending excess money on superfluous accessories and applications.
Cloud tools are ‘responsive’ to a practice’s needs
This model allows for constant upkeep and improvement. Moving away from a hosted solution means that clients can expect good service and improving product features.
The outcome
As you look to transform your accounting practice, look for an affordable, flexible and scaleable digital transformation tool.
One Paper Lane is helping accounting firms of all sizes digitise workflow and automate their client work, with little coding required and deployed rapidly. Data and real-time analytics can then be accessed to improve business performance.
Who we are and what we do
We are One Paper Lane, the digital process automation and collaboration platform of the future. We are launching in the UK at Accountex on stand 490.
Our technology will enable you to streamline, automate and improve your processes. It can work together with your existing software, apps and tech tools.
We have already helped accountancy and other professional services firms increase productivity and improve both the client and team member experiences.
Visit us and our UK partner, practice advisers Foulger Underwood, at Accountex. Alternatively, for more details, contact Julia Whistler at [email protected]
Managing change in an evolving industry
As the industry evolves with the rapidly changing times, your practice will have had to adapt to big and small, internal and external pressure to transform.
Change is constant and relentless and requires your employees to change how they communicate, learn new skills and transform their perspective on their work. In addition to adapting to new ways of working, your employees will have had to maintain focus on the day job and remain calm and professional.
What to do with an IT change
One change that might leave businesses feeling anxious is a software change or full suite migration. It’s easy to underestimate how much behavioural change is needed to successfully implement software or process changes. It is more important than ever to manage change when IT is at the heart of the transition.
Managers tend to focus on the software and logistics rather than people who will be operating the new systems.
To succeed you need to:
- Invest time and resources in training for your employees on how to use the software or new processes and how it will improve the way they operate.
- Spend time explaining the new processes and bring people onboard as change ambassadors.
- Develop your employees' collaborative capability both with the software provider and colleagues who may be help with the transition.
- Create regular opportunities for employees to feedback on the progress of the transition.
- Ensure that you’ve managed expectations of employees, particularly during transition phase as some might expect immediate success.
- Ensure that everyone is using a common language so that the transition plan is fully understood by all.
- It is helpful to appoint one project manager to oversee the process from beginning to end. This person will be responsible for pulling together all the different processes and ensuring that it keeps on track.
Taking the plunge
If you are about to initiate a change in your practice, it’s important to remember that change can take many different forms and there isn’t a one size fits all plan to ensure success. Before hitting the ground running, businesses should analyse what other changes are taking place within their business and whether programmes dovetail or detract from each other.
Communication is key
Designing a communications strategy should be central to your change programme planning. The key to communicating change successfully is to create a story that demonstrates a vision, reduces uncertainty and creates a deeper understanding of the journey. Doing these three things could be the difference between a change which achieves its targets and one that fails.
Empathy and culture
Change and an organisation’s culture go hand to hand. When leading change, you need to bring people with you on the journey. Your aim is for your employees to feel valued and empowered through the changes, rather than disinterested and irritated. The true secret to success is considering your organisation and the most important assets, the employees, in context.
If you are considering changing your software suite, visit Wolters Kluwer at Accountex Stand 1060 for more tips on how to manage change in your practice.
How to maximise the value of your business
When it comes to maximising the value of your business, there’s a lot more to consider than meets the eye. An uncertain market creates the opportunity for businesses to review their strategic options with a view to unlocking embedded value and accelerating growth.
There are a number of options business owners may consider when appraising, looking to increase or ultimately, realising value.
Questions we are often asked, along with our answers, are outlined below:
1. How might I value my business?
Business valuation is very subjective depending on the size and nature of the firm. However, recent transactions in relevant sectors involving similar-sized businesses provide a great basis for determining defensible valuation ranges. Looking at multiples achieved by companies in your sector that are listed on the public markets are also a good indicator. Naturally a significant discount factor should be applied to account for the much-reduced liquidity of privately-held shares. In addition, you could use a discounted cash flow.
2. Who might buy it?
Depending on what stage of the lifecycle a business is at, buyer options tend to vary. Fast-growing and earlier stage businesses may be suited to venture capital or private equity funds. Whereas, for more steady-state businesses, trade sales are often optimal. For smaller businesses, it may be more appropriate to look to high-net-worth investor groups that look to invest modest capital in a range of companies.
3. What might I do to increase the value of my business?
If you or your client are considering selling a business in a few months or years’ time, rather than right away, taking advice as well as investing that time and effort now can positively impact the value of the business at the point of sale.
This may include managing working capital effectively, optimising the capital structure and ensuring an appropriate debt/funding structure. Owners may also look to acquire relevant businesses, expand into new and more popular markets as well as integrate a strong Tier 2 management team who can readily take over so that as an owner you can gradually step back from the day-to-day running of the business.
4. How long will the process take?
Each transaction takes a different amount of time, largely depending upon the complexity of the business being sold, the intricacies of the transaction and also drivers to the disposal process. To run a full process with a view to achieving maximum value, it might take six to eight months.
5. How much tax might I pay?
Even if not a full disposal it is possible under partial exits to apply Entrepreneur’s Relief which is currently 10%, albeit successive governments have legislated restrictions as to its application on share disposals. With repeated political pressure to scrap Entrepreneur’s Relief, significant changes could be made to this relief in the near future which may eat 30% or more of an owner’s value on exit if the rates begin to approach comparative income tax rates.
Quantuma is an independent advisory firm which helps organisations and individuals overcome a range of operational and financial challenges. Established in 2013, we have over 170 employees across the UK and Cyprus. www.quantuma.com
Quantuma are at Accountex on Stand 331.
What's hot at Accountex 2019?
Major conferences and events are always a great opportunity to take the pulse of a profession and get to grips with the concerns, opportunities and debates that are percolating within it.
So, as iwoca returns to Accountex for a third year, we thought it was worth assessing the major topics we expect to crop up in conversation when more than 8,000 accountancy and finance professionals meet up for the annual Accountex London conference.
1. Outsourcing: is it worth the risk?
It’s clear that accounting outsourcing is on the rise. But the profession seems split on whether this is a good thing. On the positive side, in-house staff can untangle themselves from some bookkeeping, accountants can be used on more worthwhile tasks and structural skills gaps can be easily bridged. On the other hand, the lack of centralised project management means your firm risks inefficient and disorganised systems, a lower standard of service and, inevitably, unhappy customers.
2. Where is cloud accounting leading?
Like many other industries, accounting is fast migrating to the cloud and the benefits are clear: real-time processing allows for more accurate reporting; multiple users can access the information at any one time; and the software as a service model (SaaS) is cost-effective. But what’s next? As the tax system becomes more digital, among others, we look forward to catching up with iwoca partner Xero to hear more about the future of accounting in the cloud.
3. Automation vs the human touch
Much like the cloud, automation technology is sweeping the accounting sector. The opportunities include lowering costs, off-loading tedious or repetitive tasks – such as data entry – to machines, and freeing up staff to focus on more creative or challenging projects. But it remains to be seen if this switch leaves firms out of touch with their clients and losing the nuanced and very human understanding of their customer’s businesses.
4. The power of trust
A conversation that will undoubtedly stem from that of automation is how intrinsic trust is in the sector. First and foremost, clients need to know their advisors have accurate and reliable advice, but beyond that is a need for them to trust in their accountant’s data security, skill-set, planning for the future and good old-fashioned honesty. Trust is one resource that’d hard won and easily lost.
5. What's coming next?
We're also looking forward to discussing what you, Accountex attendees, think are the incoming trends ready to disrupt accounting. So whatever your teams are focused on, make sure you visit iwoca (Stand 870) to have a chat about the future of the sector, and find out a bit more about us.
Predictions for the future of accounting
The past 18 months have been another year of change for accountants, with many important moves - from Making Tax Digital for VAT being introduced, to IR35 affecting the labour market....
Making Tax Digital
Past
Making Tax Digital (MTD) is a key part of government’s plan to make it easier for taxpayers to get their tax right and keep on top of their affairs, moving tax information (and collection of taxes) online. All tax jurisdictions across the world are moving in this direction and APIs are the way of the future!
Following the implementation of MTD, HMRC has removed access to the “direct tools” submission for VAT (over 90% of VAT returns were submitted in this way). Accountants and businesses therefore need to submit VAT returns directly from their chosen software from April 2019, for those above the VAT turnover threshold £85,000.
Prediction
More people will transfer over to bookkeeping packages but not as many as HMRC would have wanted when they first announced the legislation. This is largely because software companies have developed “Bridging software” as a cheap short term solution. By April 2020 everyone will need to link their underlying transactions, however HMRC currently cannot see if a transaction has been linked which may make the process impossible to police.
IR35
Past
The Consultation Document (issued in May 2018) considers the effectiveness of the off-payroll working in the public-sector reforms introduced in April 2017 and, unsurprisingly, concludes that the new rules have been effective in reducing non-compliance.
Last year saw public sector workers move into direct employment role, following the rule change in April 2017 for a variety of reasons but mainly pressure from the end user, despite the fact that HMRC’s data shows that “the CEST tool delivers a self-employed outcome in ONLY 60% of cases”. The fear is that large companies in the private sector may take the same approach and, following the introduction of the new rules in April 2019, there will be ‘blanket decisions’ whereby workers will be forced into false employment arrangements.
As many celebrities work on a freelance basis IR35 has reached the headlines many times with BBC workers being pursued. HMRC’s aggressive (and apparently incorrect) interpretation has recently been highlighted by Lorraine Kelly’s success in a £1.2m case brought by HMRC claiming she was “inside IR35” when she clearly wasn’t.
Prediction
Many more cases will become public as contractors, end clients, recruitment agencies and, more likely Accounting providers gain more confidence to challenging HMRC due to their erroneous and aggressive interpretation of the rules.
The Off Payroll working rules will be extended to the private sector in the tax year beginning 6th April 2020. To be water-tight, you should have a record of your review attached to each contractor’s record which will probably mean using some kind of software solution.
Take it from someone who has conducted a number of IR35 cases, your chances of success against HMRC are high as long as you have an appropriate audit trail of your IR35 review process.
Watch this space for more guidance which HMRC has promised to publish soon!
My Digital Accounts are at Accountex on Stand 263
What’s the industry doing to stop failure?
50% of small businesses are still failing after five years. What’s the industry doing to change it?
“Advisory services” - the 2019 buzz phrase within the accounting profession. Every conference, event, blog, tweet, article and workshop is telling you that you should be doing it. Without it you’re failing your clients, failing your firm, ultimately just failing!
But, what is not being said about advisory services is that, as they stand today, you fail if you try and give it to every client.
Why?
Time. Garnering insights to position the value to every client (however small) takes time, building PDF reports takes time, educating those just starting out takes time, selling to every client takes time, talking clients through every report takes time, emailing out takes time, meeting monthly takes time. Even just educating yourself with ebooks like this takes time.
In an accountancy practice where time really is money, you simply do not have the time to do it.
How do we know this? We’ve supported over 1,200 accountants to roll out traditional advisory services to their clients with our Futrli Classic product. Most hit capacity at around just 10% of their portfolios. Leaving 90% without.
Yet every client would benefit from help and without it, they can struggle.
Look at the stats. 50% of small businesses are still failing by year five. This needle hasn’t changed in spite of tech advances because the 10% of clients that are given advisory services are the 10% that were probably getting the help before and can afford to pay for your time to provide it. It’s now just better with real-time information, easy to read dashboards and future-focused metrics.
But with no change, no added services, no support going to the 90% - nothing has changed for these small businesses and it is here that the failure rate remains.
Think of your own portfolio - based on these stats, up to 50% could fade away over the next fi years giving you a treadmill of new business headaches but more importantly closing the door on someone's dream, affecting their families and of course the communities they exist in. With 99.3% of all private sector businesses (at the start of 2018) being small businesses, the impact to us all is massive.
About two years ago we started looking deeper. Looking at how we can help these small businesses grow, moving towards needing month end management information packs, PDF reports, scenarios. And how do we help you move them into a space where you can advise them (for a fee!)?
Introducing the Futrli Platform. It helps small business owners who aren't ready to pay for advisory services understand more about their businesses. It does the heavy lifting of data analysis behind the scenes, and discovers, interprets and prioritises what they need to focus on today. A simple, beautiful and smart daily newsfeed keeps them on track each morning supporting, nudging them to into further insights and knowledge.
Starting with what they’re comfortable with, the first product to launch, Flow, reveals insights around their customers. How dependent they are on each one? Are there any risk areas? It shows how much they are owed or owe. Then, using AI, it will reveal cash flow predictions and forecasts, identifying areas of the business that are under or over performing. Once they have this up to date view of their cash flow, they can start to link their non-financial metrics to get the full picture.
This is the piece of the puzzle that was missing. This is how you affect your 90% and move the needle on their success.
The first four products in Futrli Platform to launch are:
Newsfeed - bringing together the day’s priorities
Discover what your clients need to know today across every data source and Platform product.
Flow - the cash flow management system
Flow helps small businesses who are stressed about not getting paid and how much they owe by using the power of AI to understand customer and supplier habits.
Predict - forecasting like you haven’t seen it before
This is forecasting totally re-imagined. Predict helps small businesses see the impact of their decisions, by combining their knowledge with machine learning to forecast their future.
Playground - scenario planning made simple
Playground stops your clients making decisions in silos with informed scenario planning. Bring teams and information together for coordinated decision making and execution.
See founder and CEO, Hannah Dawson, demo the platform on stage at Accountex on Wednesday 1 May, at the Business and Finance Theatre at 12pm. And to get on the preview list and be one of the first to explore Futrli Platform, head to preview.futrli.com
How you can solve your clients’ growing pains
As the business and finance landscapes evolve, staying ahead of the curve becomes more and more important. But there’s one thing that will never change: your clients’ desire to grow their businesses.
The accountancy profession has always been a trailblazer in finding innovative approaches to business growth. You are uniquely placed to support your clients through their growth plans, helping them navigate whatever forks in the road might crop up. Here are a few key points on how you can drive your clients’ growth.
Find the right outcome for your clients, not the right clients for your outcome
No two businesses are the same, but in the past banks have offered businesses one-size-fits-all business loans and not much else. But things have changed.
Following the 2007/08 financial crisis, banks became less keen to lend but businesses still needed finance. As a result, the innovative alternative finance sector emerged and has been growing from strength to strength ever since.
What this means for you and your clients is that you don’t have to settle for a straightforward business loan that might not be the right option for your clients’ unique requirements. As their trusted adviser you should assess your clients’ specific circumstances and help them find the right solution for them, rather than settling for something that doesn’t help them achieve their growth goals. Alternative finance gives businesses of any shape or size the finance that suits them, whether they’re capital-rich, need to fund a new vehicle, trade with customers on credit... It’s finance that moulds to each business’s needs.
Add value to the support you provide
Your clients come to you because of your experience and your authority on financial matters. So by using your knowledge you can shift your position from being their reactive accountant, there to help out when things aren’t going so well, to their proactive adviser, helping them grow their business.
Meeting regularly with your clients and making sure you’re up to date with their accounts will help you to gain a greater understanding of the businesses and to spot any opportunities for growth. This will also help you to notice any potential cash flow issues long before they become an issue for the business.
It’s all about helping clients to make a success of their business by giving them a proactive service – it’ll help their businesses to grow, strengthen your relationship with them and make the partnership profitable for them and for you.
Conrad Ford is Founder and CEO of Funding Options, Europe’s leading online marketplace for business finance. Funding Options helps businesses find the right funding for their situation. Whether they want to grow, they’re fighting for survival, or simply need to pay a tax bill, @FundingOptions is helping the small walk tall.
Funding Options are at Accountex on Stand 1145
Top 2019 accounting trends
The biggest factor impacting the accounting and finance professionals in the years ahead is likely technology. 2018 saw an enormous rise in accounting and bookkeeping software, and the trend is continuing. Statistics clearly reflect this shift.
The global accounting software market will be worth around $11.8 billion by 2026. Subscribers continue to climb. Xero users grew by 24% over the past 12 months, QuickBooks Online subscribers grew by 41%. In addition to these statistics, top accounting firms hit a record £15 billion in fee income in the UK last year.
Here are a few of the top 2019 innovative accounting trends:
Automated accounting
Investing in accounting software is a trend that is not going anywhere; digitally tracking and recording account information means better accuracy, fewer errors, and greater organization.
- Invest in an accounting software that best fits your business needs
- Easy accessibility means the input of exact data
- Elevated speed equals less cost
- Simplicity of apps revolutionises traditional bookkeeping methods
Focus on cash-flow consulting
We know that small businesses are what drive the global economy. In the United States, more than half of Americans work for or own a small business. At the start of 2018, there were 5.6 million small businesses in the UK alone, which accounted for 60% of all private sector employment. Having enough cash in the bank means maintaining an accurate cash-flow forecast at all times.
- Plan for the long-term by keeping an eye on your cash flow
- Make crucial decisions about investments
- Support the growth of your business by employing adequate staff
(Keep) using the cloud
Certainly the idea of using cloud-based services isn’t new; it was huge in 2018. And it’s not going anywhere. Firms around the world are continuing to use their services to move and securely store massive amounts of data.
- Improve efficiency and enhance security for your business and your clients
- Become more proactive and collaborative by switching to the cloud
- Easily and quickly create and analyze reports and data
- Access data wherever you are
- Innovation in cloud-based services means that investments are expected to spike by 50% over the next four years
Focus on people
With all of this focus on automation, how can your firm stand out from the crowd? The answer might surprise you. By using accounting technology to work better and more efficiently, you can free up time to really focus on your valued relationships.
- With the help of technology, advisers can spend more time with clients, employees, and their accounting network
- Relationship-building will help your business grow
- Build better alliances with app partners, other accounting businesses, and employees
Take some time to personalise for an extra touch, and give some thought to specialization to stay competitive. A whopping 67% of accountants are feeling that the industry is more competitive than ever before.
eBillity are at Accountex on Stand 920
An app stack to put you in financial control
The importance of financial controls for financial service outsourcing (FSO) organisations
FSO organisations have a unique demand for financial controls because of:
● An increased time and effort to communicate and coordinate with multiple decision makers on the client’s side. This is because the decision makers are remote, but are nonetheless involved in daily authorisation activities.
● A demand for shared accountability for decision making with clients. This helps make sure they are not solely responsible for erroneous or fraudulent payments in such cases where they could not get timely approvals on the client side.
● The need to have exceptional data quality - all the correct coding, Bills matched with the corresponding POs, timely reviewed and approved Bills – in order to be able to deliver high value services such as cash flow forecasting, and financial advisory.
Keys to efficient financial controls: Digital and fully automated processes
Xero’s latest Cash Flow App Advisory Playbook outlined the importance of Data Automation. Modern cloud technology has been widely embraced, and manual interventions and paper-based processes all but eradicated. Functions such as invoice submission, practice management, client management, and approval management have all benefited.
To take the first step towards Data Automation, you must introduce digital data capture and cloud data storage for accounting documents.
Once you have your data in a digital form, you can start introducing Data Automation, which is essentially an extension of data digitisation with workflow driven data validation and decision control. This makes sure that your accounting data is complete, verified, and auditable.
Building a Xero-based Bill Automation app stack
A Xero-based Bill Automation app stack consists of the following:
● Xero as the cloud accounting platform. It should be used for cloud data storage, centralised document management, and accounting.
● Digital data capture tools, such as Receipt Bank, Datamolino, AutoEntry, and Hubdoc.
● Online approval workflow apps, such as ApprovalMax. This should establish the multi-tiered and fully automated approval workflow, based on the approval criteria pulled from Xero - for example: Supplier, GL code, Amount, Tracking Category, etc.
Results of introducing financial controls for accounting and bookkeeping practices
There are a number of benefits to introducing financial controls, such as:
● A streamlined client communication and strong authorisation process for all financial documents, including POs, Bills, Credit notes, etc.
● A fully automated and notifications-driven authorisation process for multiple remote budget holders and decision makers on the client side.
● Positive profitability by ensuring data quality through timely review and approval of all financial documents.
● Higher client satisfaction due to better transparency and process agility.
● A reduction in time and costs, and improvement in audit quality using automated audit reports attached to every Bill and PO.
● Improved cash flow analysis by taking into account pending POs and Bills which require approval and that are not yet reflected in Xero.
ApprovalMax will be at Accountex on Stand 471.
Four keys to success with workflow software
A workflow is a formal customised business process, a method multiple team members with differing responsibilities can use to feel confident they understand each other, agree on how work will be handled, and are able to measure and plan based on consistent results.
The most important critical success factors for implementing a workflow solution happen before you configure or use workflow software.
Document your existing workflows. By objectifying what you and your team actually do today, it becomes much easier to spot areas where you can improve efficiency. The less you make assumptions about what others do, the more accurate you will be. The more accurate you are, the better your new workflow will be adopted by all of your staff.
Focus on:
- What starts a workflow?
- What tasks happen in each step and who performs them?
- What ends a workflow?
Write a goal statement. Once you and your team document an existing workflow, revisit the intended goal of that process.
What does success look like when the workflow is complete?
When all pertinent members of a team document and agree on what a successful outcome is, achieving consensus on a standardised process is simple because all of the decision makers have already agreed on where they are, where they want to go and can consider each of the possibilities quantitatively.
Add, change or adapt. With a documented existing process and clarity regarding what you are trying to achieve, the next step is to adapt and improve the existing process by eliminating redundancy and including the capabilities of new tools.
This step is not only an intellectual exercise.
Subject matter experts should consider it to be hands-on and iterative. The idea is to reveal the best method possible at your firm.
Review for consensus. Incorporate the findings in Success Factor 3 (above) into your documented process and meet with all relevant staff to confirm that everyone involved believes it will work.
Until consensus is achieved, have subject matter experts return to Success Factor 3 (above) to re-tune the process until consensus is achieved.
Doc-It Inc will be at Accountex on Stand 936 (1-2 May, ExCeL London.