5 signs that you lack good financial visibility in your product based business
As a business owner, are you certain that your financial management is effective and efficient enough to make the best strategic decisions? With our 20+ years of experience in finance and operations, follow along as we delve into 5 key indicators and solutions to elevate your financial management.
The Dashboard Dilemma
A lack or absence of a well-structured dashboard is one of the primary indicators of poor financial visibility. Many businesses find the task daunting, considering some data extraction can be complex and time consuming. However, a comprehensive dashboard is essential for visualising and understanding critical financial data, such as revenue, expenses, profit margins, and cash flow.
Pro tip: Investing in a user-friendly dashboard can provide real-time insights into your business's financial health and empower you to make informed decisions.
Spreadsheet Constraints
Whilst spreadsheets can be a handy tool for data organisation, relying solely on building DIY spreadsheets to consolidate financial data can massively hinder growth. Although this may seem like a cost-effective solution initially, it’s prone to errors, lacks automation, and becomes increasingly cumbersome as your business expands.
Pro tip: Adopting dedicated financial management software will save a lot of time, reduce manual errors and provide comprehensive financial visibility tailored to your business's needs.
The measure of Success
Lacking a clear understanding of what to measure is another sign of insufficient financial visibility. Without well-defined Key Performance Indicators (KPIs), it becomes challenging to benchmark your performance, track progress and identify areas for improvement. Each product-based business is unique and determining the appropriate metrics to measure can depend on factors such as industry, target market, and business goals.
Pro tip: Consult industry benchmarks and define KPIs that align with your objectives to gain better financial visibility, which will then help you find what dashboard would work for your business.
Fragmented Financial Insights
If your business needs to access multiple different software for accounting, inventory management, sales tracking, and other functions, it becomes challenging to consolidate the data efficiently. This fragmented approach often leads to inefficiencies, errors, and a lack of holistic insights.
Pro tip: Consider implementing an integrated reporting platform that provides centralised access to all your crucial management data.
Lack of Real Time Insights
If your financial visibility is limited to periodic reports or outdated data, you’re missing out on valuable opportunities to make proactive decisions. Waiting for month-end or quarter-end reports can significantly restrict your ability to respond to emerging trends, identify potential issues and seize growth opportunities. Real-time insights empower you to take immediate action, adjust strategies, and ensure financial stability in a rapidly evolving business landscape.
Pro tip: Explore solutions that offer real-time reporting and analytics to gain a competitive edge.
Do these situations sound familiar? It could be prime time to invest in the recommended tools to ensure efficient data management and visibility - an upfront effort that’s guaranteed to prevent future chaos. Embrace the change and drive business growth!
By Aasiya Azeemali
Kounteq Ltd powering QURK will be exhibiting at the Accountex Summit in Manchester on the 19th of September 2023 at stand no J12.
You can register for a free ticket here.
Swoop solves the funding problem for accounting firm
Gravitate Accounting used to dread clients asking about funding. Now they see it as an opportunity to delight business owners
Sam Newton, Founder at Gravitate Accounting, says that the Sheffield firm prides itself on being “hands on” with the 200 plus clients on their books:
“We’re a three-year-old, up-and-coming digital accountancy practice. We don’t just do a set of accounts. We’re in contact with our clients monthly, producing KPI reports, management accounts and so forth. At some point, every business will have a need for cash.”
In the past, being asked to find funding had presented Sam and his colleagues with a dilemma:
“As a smallish firm, we didn’t have the resources to research funding in-house. We would have to speak to their bank or other funders and try to find them a good deal, but how does that work? Do you charge the client an hourly rate? And can you charge them at all if you don’t find something suitable?”
All that changed when Sam found Swoop, which uses clever matching technology to scour the market and highlight options that meet the needs of cash hungry businesses. Sam says the change has been dramatic:
“Now we just upload all the information onto a portal that Swoop provides, giving them all they need to approach various lenders. With their in-house knowledge, Swoop can target specific lenders and come back with deals for our clients.”
Swoop can handle all kinds of funding from simple credit cards to complex commercial mortgages – and plenty of little-known specialist products from niche lenders along the way. Accountants can also use the platform to find grants that their clients may be eligible for and reach out to a network of VCs for potential investors.
Sam says that when his clients ask about funding, it’s no longer a problem as Gravitate Accounting now has the right tools to help:
“With Swoop, we’ve got a really good solution in place where we can get some pretty quick answers. We’ve got a good enough relationship and trust in the guys at Swoop for them to run the conversation and do the best for our clients.”
If you are an advisor, click here to find out more about how Swoop for Advisors can help you meet the funding needs of your clients across grants, borrowing and equity: Swoop for Advisors
By Swoop
Swoop will be exhibiting at Accountex Summit Manchester on the 19th September 2023 on stand D6.
You can register for a free ticket here.
The danger of overheard conversations
Moneypenny’s head of the finance sector Louise Wilson explains why telephone confidentiality should be front of mind.
Picture the scene: a receptionist in an accountancy practice takes calls at a front desk with a seating area beside them. Sitting in this space means it’s entirely possible that you might hear the telephone conversations being made or received - including who the receptionist is talking to, who they are transferring calls to and which services the caller might need, perhaps insolvency support, audit expertise or tax advice.
Overhearing a conversation can be completely accidental, but it can also put the accountancy firm in a difficult spot, especially since the introduction of GDPR (General Data Protection Regulation) which has made all businesses more aware of just how crucial confidentiality and data protection is to regulators, business and clients alike.
Louise Wilson heads the finance sector at Moneypenny, which provides telephone answering and live chat support to hundreds of financial services and accountancy businesses in the UK.
Here she explains why firms must ensure client confidentiality isn’t compromised due to poor phone etiquette.
She says: "The ICAEW1 advises that accountancy firms follow confidentiality guidelines and ethics as standard to ensure client information remains strictly private.
“Open offices and visitors waiting in reception mean conversations can be widely heard, and whilst it’s likely not done on purpose, confidentiality can be compromised. Something as simple as announcing a caller’s name as they’re being put through can increase the chance of private information being overheard by others.
“While most people may not do anything with that information – others might. No one likes the idea of a competitor overhearing that you need insolvency advice or for someone you know to be privy to your private matters. And if you’re the one sat in reception listening to all this, it will make you question the firm’s commitment to privacy and confidentiality altogether.
“Privacy is hugely important for clients and a lapse in good practice can cost both clients and reputation.”
Disclosing client names and details
Simple details like taking a client’s name or business name, who they wish to speak to or even the nature of their call such as insolvency, tax advice or audit support can be considered confidential information that they might not want others to know.
Whilst it’s important to note this information for records and keep it safe, saying these details out loud in a public and open office could compromise privacy; especially as regular clients or members of the public might end up privy to information they shouldn’t.
It can be tempting to take as much information as possible from a client over the phone, but GDPR calls for businesses to minimise the amount of information they collect. If you’re noting down more data than you need from a client, you could be in violation of GDPR and put yourself at risk of data leaking simply because there is more of it. The only data that should be collected is what is considered necessary for conducting business with clients.
Protecting client confidentiality
Keeping details private is one of the most important responsibilities of financial services businesses. In fact, it is one of the fundamental parts of the ICAEW code2, which calls for those in accountancy to “respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose”.
Louise offers some advice for accountancy firms to keep client confidentiality front of mind and comply with both the ICAEW code and GDPR guidance: “Ensuring staff know how to handle calls discreetly and to transfer or take messages without sharing too many details can avoid potential breaches from happening. Simple measures can include asking call handlers not to repeat sensitive data when taking notes, moving those answering calls away from spaces the public has access to, and changing phone practices so that calls are put through without being announced.
“Additionally, using a third-party answering service that isn’t based in your office is also very effective. This means all calls are handled off-site by trained professionals so there’s no danger of visitors to the office overhearing private calls. It also frees up in-house receptionists and front-of-house professionals to concentrate fully on delivering great client care and hospitality to those visiting, as well as helping with wider office duties.”
Louise adds: “Accountancy firms know how important it is to keep sensitive financial data private, but many probably haven’t considered what information can become public simply by being overheard. Ensuring privacy is not only key to complying with a variety of financial guidelines but also crucial to showing clients that you respect, value and protect them. That’s how you create the most positive and professional client experiences.”
Moneypenny provides telephone answering and live chat services to hundreds of financial services businesses and is trusted by the UK’s top accounting firms, including five of the top 30.
Established in 2000, Moneypenny is the world's market leader for Telephone Answering, Live Chat, Outsourced Switchboard, and customer contact solutions. More than 21,000 businesses globally benefit from Moneypenny’s mix of extraordinary people and ground-breaking technology.
For more information, visit https://www.moneypenny.com/uk/accountancy-answering-services/
By Moneypenny
Moneypenny will be exhibiting at Accountex Summit Manchester on the 19th September 2023 on stand H5.
You can register for a free ticket here.
How to identify and prevent invoice and CEO fraud
According to the trade association UK Finance, 4 out of 10 companies in the United Kingdom are still unaware of the risks of invoice fraud. At the same time, a 75% increase in invoice and payment request fraud has been detected in the last 3 years, leaving businesses of all sizes with substantial financial losses.
It can happen to anyone. Between handling multiple documents at the same time, processing several invoices simultaneously, and having the pressure of a payment due date coming up, you can mistakenly approve a fraudulent invoice without notice.
Luckily there are solutions that can prevent you and your business from these malicious practices. In this blog, we will explain the difference between CEO and invoice fraud, provide real-life cases, and equip you with effective solutions for invoice fraud detection.
Invoice fraud vs CEO fraud: What’s the difference?
Invoice fraud and CEO fraud are two closely related types of fraud. Using a fake invoice to deceive a business into paying for goods or services that were never received constitutes invoice fraud.
From 2013 to 2015, for example, a man posed as an employee of a tech company and emailed fake invoices to Google and Facebook. Over two years, he acquired more than $120m before he was caught.
By posing as someone from a legitimate company, he could trick employees into paying the invoices for things they'd never ordered, sending the money directly to his bank account.
Similarly to invoice fraud, CEO fraud is when criminals pose as people in higher-up positions and trick employees into sending money for never rendered services.
For example, using a fake email address, a criminal posed as Shark Tank Barbara Corcoran's secretary to trick her bookkeeper into paying $388,000 via wire transfer. The fake email address was just one letter different from the secretary's, making it difficult to spot.
How can you protect your company?
According to the 2023 UK Finance report, invoice and CEO frauds remain significant threats to UK businesses.
In 2022, 6,729 businesses were duped through authorised push payment scams, resulting in approximately £77 million in losses. Notably, invoice fraud accounted for 44.8% (£34.5m) of those losses, while CEO fraud contributed 16.8% (£12.9m) of the £77 million total.
Financial crime expert Hinesh Shah underscores the need for businesses to strengthen online security, stressing the importance of businesses actively guarding against potential threats.
Here are some of the ways you can detect and prevent invoice or CEO fraud:
- Establish regular communication with your vendor
- Keep track of unusual vendors’ activity
- Double-check the payment information
- Use two-way matching to compare invoices with purchase orders
- Use invoice processing software with automated fraud detection
Do you want to safeguard your organisation from financial fraud? Join Klippa at stand B10 during the Accountex Summit Manchester to learn about our software. Prevent the risks of invoice fraud while saving time from repetitive manual tasks!
By Klippa
Klippa will be exhibiting at Accountex Summit Manchester on the 19th September 2023 on stand B10.
You can register for a free ticket here.
How to explain Anti-Money Laundering (AML) checks to your clients
Money-Laundering is still a real and present threat in the UK. HM Revenue & Customs recently hit hundreds of UK businesses with money-laundering fines, with the penalties for breaching these Anti-Money Laundering rules coming to a staggering total of £3.2 million. To help combat this activity, it’s increasingly important for your firm to have robust AML procedures in place.
But how do you convey the importance of these AML checks and procedures to your client base? Will they understand the need to comply with these checks, and how should you communicate the value of protecting the financial integrity of their company and your firm?
In this post, we’ll outline:
- The value of explaining AML checks to your client base
- How an engaged client base helps your Money Laundering Reporting Officer (MLRO)
- Your template for outlining AML checks to your clients
The value of explaining AML checks to your client base
Including an explanation of Anti-Money Laundering (AML) checks when onboarding new clients to your accounting firm is a must. With the regulatory environment being strengthened, it’s important that your clients are aware of the need for these AML checks, and that they know what’s required of them when you request data, documentation and financial information.
We know chasing clients to complete checks is one of the biggest time sinks during onboarding, so explaining the requirement for these AML procedures is vital.
- It helps to build trust with clients – when clients understand the reasons for AML checks, they are more likely to trust that the firm is taking their security seriously. This can help to build a strong relationship between your firm and your clients.
- It helps to prevent compliance issues – if clients are not aware of your firm's AML requirements, they may be more likely to make mistakes that could lead to compliance issues. By explaining the AML checks to clients, you can help to ensure that clients are aware of the rules and that they’re complying with them.
- It helps to improve efficiency – when clients understand AML checks, they can be more proactive in providing the necessary information. This can help to speed up the onboarding process and free up your MLRO to focus on other tasks.
How an engaged client base helps your Money Laundering Reporting Officer (MLRO)
There’s an obligation for your firm to have a dedicated Money Laundering Reporting Officer (MLRO) to manage your AML processes. For your firm's nominated officer or any member of the team for that matter, explaining AML checks to your clients helps to keep them educated and engaged by the process. This can have a number of advantages for you and your firm.
These benefits can include:
- Reduced workload – with written explanations about AML procedures during onboarding, you can help reduce the amount of time you need to spend explaining the rules to clients. This can free up time to focus on other tasks.
- Improved communication – a clear explanation of the AML process and associated checks can improve communication between the person in your firm managing the process and the clients (or potential clients) you’re dealing with. This enhanced insight into the AML process helps ensure there are no misunderstandings about the rules and that clients are aware of their AML tasks and key responsibilities.
- Increased compliance – detailed explanation of AML regulations can help ensure that clients are complying with the rules, and also being proactive about it. This can help to protect the firm from legal liability and financial penalties and reduce the risk of penalties for clients. If you’re doing this and it’s also included in your AML policy, it’s only going to look favourable in the eyes of your supervisor during a practice review if you’re demonstrating this sort of proactive education.
Your template for explaining AML whilst onboarding clients
Overall, explaining AML checks to clients is a valuable way to build trust, improve efficiency, and reduce compliance risks. As such, building an education component about AML into your client onboarding should be a key part of your firm’s AML compliance programme.
To make things easier, we’ve drafted an AML template for you, that explains in simple terms why AML checks are needed, and what the client’s responsibilities will be.
Here’s your template to use, revise and customise for your clients:
Dear [Client Name],
As part of our commitment to maintaining high standards of integrity and compliance, we want to explain the key reasons behind the Anti-Money Laundering (AML) checks we carry out.
These AML checks are part of our onboarding process and an ongoing regulatory requirement we have as accountants to help combat financial crime. These checks help to protect our firm but also make sure that we’re working with the business, and people who are who they say they are, and so we might know any risks that could be present.
To help you understand the why, and the value of these AML checks, we’ve summarised some of the key points below.
Key reasons we carry out AML checks:
Regulatory Compliance: Conducting AML checks ensures that we comply with the UK's legal obligations, and helps us as accountants to protect the legitimacy of the financial system in the UK.
Risk Mitigation: AML checks help us to identify potential money-laundering risks associated with clients and transactions, allowing us to implement appropriate measures to mitigate these risks and compliance issues.
Enhanced Security: By identifying and preventing money laundering activities, we protect your business from potential financial losses, reputational damage and possible legal consequences – as your accountant, it also gives us a picture of what we’re dealing with.
Better Decision-Making: AML checks provide us with a comprehensive understanding of your business activities, so we can make informed decisions and provide tailored services that meet your specific needs.
Comprehensive Due Diligence: By conducting AML checks, we gather essential information about your business. This means we get a clear picture of who you are, but it’s also a great opportunity for us to get to know each other better.
Regulatory Reporting: As your trusted advisers, we’re obligated to report any suspicious activities to the relevant authorities promptly, so we need to carry out these checks to understand if there might be any ‘red flags’ or associated risks.
We’re committed to meeting all of our AML compliance obligations, and we also want to make the onboarding process and any information requests as seamless as possible.
You’ll receive another email shortly including details about the next steps in our onboarding process relating to AML, including the procedures for sharing financial data and documentation.
If you have any AML-related questions, please don’t hesitate to get in touch.
Kind regards, [Accounting Firm Name]
Tip 🤖
Our template is written in fairly formal language – if you’re leveraging AI to help your firm, it’s easy to copy the above template, drop it into ChatGPT (or your AI writing tool of choice) and ask it to “make it more colloquial”, “tailor it to your firm's tone of voice”.
And well if you’re not using AI, perhaps this is an easy place to start – we’ve done the hard part for you 😉
You might also be able to incorporate this into your existing onboarding content, or communications flow – however you choose to use it, we think going deeper and explaining more about ‘the why’ behind AML checks can help.
Your one-stop shop for running and recording AML checks
Leveraging technology to help with AML checks, risk assessments and client onboarding is nothing new – keeping it housed in one intuitive workflow can make it easier to manage your workflow.
A solution like Firmcheck helps your firm:
- Meet your compliance requirements and carry out in-depth ID and address verification using our mobile-friendly web-based biometric integration
- Have a robust risk-based AML process
- Capture your whole AML workflow in one place, through a centralised system, including approvals and determinations
Firmcheck is the central hub for all your AML activity as an accountant. Our solution helps you seamlessly gather the data you might need from clients, and keeps it secure in one, easy-to-use system.
Join our waitlist, and we’ll let you know when we launch this September.
(NB: This article doesn't constitute legal advice and is intended for general informational purposes only. Always consult with a legal expert or compliance consultant for guidance specific to your firm.)
By Nathan Barker, Firmcheck
Firmcheck will be exhibiting at Accountex Summit Manchester on the 19th September 2023 on stand F21.
You can register for a free ticket here.
Why Collaboration with Finance Benefits Procurement and the Whole Company
Efficient collaboration between finance and other departments is vital for a business's overall success. Like a well-functioning body, a holistic approach leads to better decision-making and improved outcomes.
An Isolated finance department leads to miscommunication and lack of accurate up to date information.
By collaborating with finance processes can be optimised, finance can support better decision-making in various areas of the company, and will improve the bottom line.
What is Collaboration with Finance?
Financial collaboration involves working cohesively across departments to support and provide valuable input for various areas of the business.
When your finance team works closely with administrative and management personnel, they can better assist managers when budgets are being prepared or strategic plans devised.
Collaboration between finance and HR can lead to better management of new hire requirements and salary caps.
Why Collaboration with Finance is Important
Collaborative processes yield improved company-wide results. Finance plays a pivotal role in a company, managing payment to vendors, ensuring timely payments from customers, and contributing to strategic planning.
Siloed finance departments hinder efficiency; cross-functional collaboration is essential for agile financial management and better outcomes.
Collaboration is a two-way street. Ensuring finance has accurate and up to date information from the various departments they are working with helps them work more efficiently and provide more accurate insights.
Finance Collaboration with Procurement
Collaboration between finance and procurement is critical as both departments impact the entire business structure.
Procurement providing accurate information related to purchases ensures finance can process invoices in a timely fashion with reduced delays related to invoice approval. Finance can also manage cash flow more easily with visibility of committed spend.
Supplier relationships with key suppliers can be greatly improved by aligning with finance. By processing invoices quickly accounts payable can prioritise payment to:
• Keep key suppliers happy
• Capture early payment discounts
• Avoid late payment fees
• Manage by exception for discrepancies
Adherence to budgets and better spend against budget information can help both procurement and finance teams greatly.
A dedicated Spend Management software, like Planergy, aids both procurement and finance individually with real-time data but also greatly improves the ability of the two areas of the business to collaborate effectively.
Challenges of Collaborating with Finance
While there are many benefits when collaborating with finance, there are also some key challenges to be faced.
• Resistance to change can hinder the adoption of collaborative practices
• Reluctance to rely on others and fear of job loss can impede collaboration
• Poor communication across departments creates barriers
Best Practices for Collaboration with Finance
To ensure successful collaboration with finance you should consider these best practices:
1. Assess and upgrade existing tools to support collaboration and communication
2. Identify areas of priority and start collaboration efforts there
3. Create a plan for how you will share essential financial information
By Lyle Del Vecchio, Planergy
Planergy will be exhibiting at Accountex Summit Manchester on the 19th September 2023 on stand B9.
You can register for a free ticket here.
How to create an AML checklist for your firm
Engaging a new business client is good news for your accounting firm’s growth and the stability of your firm’s revenues. But taking on the wrong client can be a costly error, especially if this new entity turns out to be involved in money-laundering activity. This is why carrying out robust Anti-Money Laundering (AML) checks on all new clients is such a vital compliance step.
AML checks exist to give you the best possible overview of your new client’s business, their finances, transactions and the nature of their business activities. By putting these areas under the microscope, you can look for any potential red flags and areas of concern, and it’s in additive to getting to know your client.
So, what are the key steps to include in your firm’s AML checklist?
We’ve highlighted the important areas to consider, and why they should be central to your due diligence process.
8 key components to include in your AML checklist
An AML checklist is a vital part of your Know Your Customer (KYC) (or sometimes known as Know Your Client) process. To meet your Customer Due Diligence (CDD) responsibilities, it’s important to include the following key actions to ensure compliance with the rules for your region and to mitigate the risk of money laundering.
1. Client Identification
- Obtain and verify the client's legal name, business name and relevant identification documents relating to the company.
- If engaging a limited company, partnership or director, identify the company’s records and filings with Companies House.
- Verify the client's residential or business address.
- Collect and validate the client's contact information, including phone numbers and email addresses.
2. Beneficial Ownership
- Identify and verify the beneficial owners of the client's business, including individuals who hold a significant ownership interest or have control over the entity.
- Collect the necessary documentation to establish beneficial ownership, such as shareholder registers or partnership agreements.
3. Risk Assessment
- Assess the client's risk profile based on factors such as the nature of their business, transaction volume, geographic location and known industry risks.
- Where necessary, conduct Enhanced Due Diligence (EDD) for high-risk clients, including politically exposed persons (PEPs) and clients in high-risk jurisdictions.
4. Source of Funds
- Determine the source of funds for significant transactions or account openings, making sure that they’re legitimate and derived from legal activities.
- Request documentation or evidence to support the source of funds, such as bank statements, tax returns or business financial records.
5. Suspicious Transaction Monitoring
- Establish robust systems and processes to monitor your client’s transactions for any unusual or suspicious activities.
- Train your employees to recognise red flags, such as frequent large cash deposits, complex transaction structures or unusual patterns of funds movement.
6. Record Keeping
- Maintain accurate and up-to-date records of customer information, identification documents and transaction details.
- Retain records for the required regulatory period, typically at least five years, and ensure these records are easily accessible for auditing purposes.
7. Compliance Program
- Develop and implement an AML compliance program, including written policies and procedures, training programs for staff and regular internal audits.
- Appoint a designated AML compliance officer responsible for overseeing the firm's AML efforts and ensuring ongoing compliance.
8. Reporting Suspicious Transactions
- Establish a clear process for reporting suspicious transactions to the appropriate regulatory authorities, such as the UK Financial Intelligence Unit.
- Educate your staff on how to recognise and report suspicious activities promptly, in accordance with legal and regulatory obligations in your territory.
Firmcheck: taking away the headache of AML checks and ongoing management
Completing AML checks is a complex but necessary part of your engagement process. It's also worth noting that the specific requirements for AML and KYC checks may vary depending on the jurisdiction and regulatory framework that’s applicable to your firm. The checklist needs to be tailored to align with relevant laws, regulations and industry best practices.
The simplest and most effective way to complete these AML checks is by using tailored AML software tools, like Firmcheck.
Firmcheck is your one-stop shop for all your firm’s AML needs, allowing you to manage AML across the entire client lifecycle, including ID verification, PEPs, Sanctions checks, and ongoing due diligence.
Firmcheck helps you:
- Manage company, and individual AML checks all in one place
- Keep a track record of all decisions and risks, with a simple intuitive AML workflow
- Stay on top of ongoing due diligence with prompts and reminders for things like expired IDs
- Meet your record-keeping and AML obligations
Join the Firmcheck waitlist to stay up to date and be notified when we launch in September 2023.
(NB: This article doesn't constitute legal advice and is intended for general informational purposes only. Always consult with a legal expert or compliance consultant for guidance specific to your firm.)
By Nathan Barker, Head of Marketing, Firmcheck
Firmcheck will be exhibiting at Accountex Summit Manchester on the 19th September 2023 on stand F21.
You can register for a free ticket here.
How technology supports, not replaces, accountants
The accountancy profession is going through a period of transition due to the adoption of digital technologies. Accelerated throughout the COVID-19 pandemic, the adoption of technology has increased at a rate that no one could have predicted.
71%¹ of businesses are more dependent on technology. 68%² of businesses believe digital technologies are benefiting the delivery of services. It is important to understand how digital technologies are aiding professions and not making them obsolete. Embracing digital technologies can enhance roles and transition their value.
The accounting profession's adoption of technology moves slower than the average profession. Finance and accounting teams still spend as much as 80%³ of their day on manual data gathering, data inputting and admin tasks. Tasks, according to McKinsey⁴, could be automated using digital technologies. McKinsey found that digital technologies can automate “general accounting tasks”. Whereas “business development tasks” needed an accountant's knowledge and expertise.
Such stats reveal how digital technologies can aid accountants. Leaving more time to spend on tasks that technologies cannot replace. This is where accountants need to realise how digital technologies can transition their roles. Roles that no longer require admin and manual input. But roles that focus on business development, financial advice and business insights.
Digital technology use may appear daunting for the accountants who spend 80% of their time on manual tasks and traditional processes. But digital technologies exist to aid. From automation and AI technologies, to digital service delivery and data analytic tools. Automation technologies can replace data inputting and manual admin tasks. Digital service delivery can expand an accountant’s base and connect customers easier than ever before. And utilising data analytic tools will enhance the profession's role to that of a business adviser.
Reducing manual tasks with digital technologies, provides accountants the space to be strategic with their customers and to ultimately help their business grow.
The change in accountant's roles will only enhance the profession. So much so that The Bureau of Labor Statistics projects 10%⁵ growth (faster than average) for accountants and auditors from 2016-2026. Accountants need to show their customers that their role is changing. That the adoption of digital technologies allows the accountant's role to be even more valuable. Embrace technology and be more relevant for your customers than ever before.
Sources:
¹ and ² https://www.techuk.org/resource/survey-results-lockdown-and-changing-attitudes-towards-tech.html
³ https://www.adaptiveinsights.com/sites/default/files/assets/Adaptive-Insights-CFO-Indicator-full-steam-ahead-automation.pdf
⁴ https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/bots-algorithms-and-the-future-of-the-finance-function
⁵ https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm
This is a guest blog from Unifiedpost Group. They are exhibiting at Accountex Summit North 2021 on stand J16.
Improve your analytics and forecasting with verified actionable data
Every business needs an insight into its current position and an understanding of what’s coming in the future. With Xero launching its new Xero Analytics Plus tool, cash flow prediction becomes a much simpler task.
The importance of data for insights and forecasting
Of course, whichever tool you’re using, the key to accurate reporting and forecasting is high-quality data – structured, verified and enriched with business context. An absolute must for making informed business decisions. Financial performance indicators can go far beyond what traditional accounting can do, they actually give an outlook on the business as a whole. The main focus here is understanding the company’s financial health as well as finding effective ways to move the business forward.
So, for quality insights and forecasting all expenses have to be coded properly in the accounting system. This builds a reliable basis for cash flow forecasting, cost projections, expenditure structure and much more.
A well-established granular authorisation system adds greatly to data quality; its setup includes various expense authorisation levels, custom authorisation criteria, rules for authorisation delegation and fraud monitoring procedures. A clearly defined authorisation process enables accounting practices to share accountability with the client, create the base for accurate financial projections and advise clients on their financial performance.
Validating data in ApprovalMax
When bills enter ApprovalMax, they first get reviewed and coded. In this step, the accounts and tracking categories are checked to confirm that the spend allocation is correct. It’s also possible to match bills and corresponding purchase orders in ApprovalMax, which includes copying certain information such as the bill's coding from the original purchase order.
After this initial control, usually performed by the practice, bills are routed through the defined approval workflow on the client side. ApprovalMax runs a fully automated multi-step and multi-role authorisation process, which is based on one or several criteria pulled from the accounting system (supplier, amount, GL code, tracking category, etc.). The highly flexible approval matrix can easily be extended to suit growing businesses with increasingly complex spend tracking patterns and progressively more approval criteria that need to be taken into account. ApprovalMax reflects the delegated authority for the business and enforces internal controls.
Completing the ApprovalMax review and approval process ensures that only authorised and properly coded bills enter Xero to provide a reliable basis for accurate reporting and forecasting.
This is a guest blog from ApprovalMax. They are exhibiting at Accountex Summit North 2021 on stand B11.
How to communicate to your clients about MTD
The next phase of Making Tax Digital (MTD) for VAT and the introduction of MTD for Income Tax Self Assessment (ITSA) are fast approaching. With these deadlines on the horizon, it’s important that your clients understand how the MTD initiative will affect them and know what steps they need to take to remain compliant. With this in mind, award-winning software provider FreeAgent has put together the following tips to help you get your client communications off to a flying start.
This content was originally published at https://www.freeagent.com/blog/mtd-client-communications/
Put your clients into groups
Before you start sharing information about MTD, you might want to review your customer base and consider how the initiative will impact different types of clients. You may have some clients who are already using accounting software like FreeAgent and others who don’t yet keep digital accounting records. Some may be affected by MTD for VAT, others by MTD for ITSA, and some might be affected by both. A diverse range of clients means that a one-size-fits-all approach to communications is unlikely to be effective. Instead, you may wish to separate your clients into groups and tailor your messaging to fit the needs of each one.
Draw up a communications plan
Taking the time to plan how to speak to your clients about MTD will help you ensure that your communications are as efficient as possible. Try to detail what message you want to communicate to each group of clients and when you want to share it. While you certainly want to keep your clients informed about MTD, it’s important to avoid bombarding them with so many messages that they can’t stay on top of everything. By prioritising your MTD messaging and choosing a particular time and day to get in touch with your clients, you can avoid overloading them with information and make sure they don’t miss important details.
Choose your channel
Your method of communication is every bit as important as the content. It’s also important to consider which methods of communication your clients will be most receptive to. Here are some communication channels to consider:
Email newsletters
Email newsletters can be an efficient way of sending regular updates to your client base. By sticking to a regular schedule (e.g. once a week or once a month), you can keep your communications consistent and your clients will know to look out for them. You may decide to finish each email with a checklist of tasks your clients should complete or a hyperlink to encourage them to read more on the topic. If you’d like your newsletter to engage with prospective clients, consider adding a message on your website to encourage them to join your mailing list.
Social media
You can use social media platforms such as Facebook, Twitter and LinkedIn to share your MTD messages and even spark discussions on related topics. It’s also important to think about the types of content that you want to share. For example, an infographic or a quick summary of the important MTD deadlines may resonate on Facebook better than a long post on how MTD will impact landlords, which could be better suited as a blog post.
Blog posts
If you’re keen to share your insights into MTD, consider writing blog posts for your clients and publishing them on your website. As some aspects of the initiative may require a little more explanation than others, you may want to create blog content that tackles the most important details or answers the most frequently asked questions. Although a blog post may take a while to research and write, it could prove invaluable in the long run, as you can point clients to it whenever they have a query as well as sharing it on social media platforms and linking to it from your newsletters.
Virtual events
By hosting an engaging webinar, you can speak directly to your clients about MTD and answer multiple questions in one session. This can bring a more personal feel to your communications, which your clients will hopefully both enjoy and appreciate. By hosting webinars for particular groups of clients, you can home in on the specific aspects of MTD for VAT and MTD for ITSA that will impact them. You may also wish to invite other experts along to reinforce your messaging. For example, FreeAgent’s team of MTD experts can join your webinar to talk your clients through using digital accounting software and explain the benefits of digital record keeping. By hosting webinars, you might also get a better understanding of which of your clients are engaged and which ones have yet to prepare for the changes.
Reassure your clients
MTD may feel daunting to many business owners but by reassuring your clients that you’re able to support them through the change, you can help to put their minds at ease. Highlighting the benefits of digital record keeping could also help to put your clients in a more positive frame of mind around MTD. From giving them a clearer understanding of their tax responsibilities to reducing the risk of invoicing errors, MTD could have major long-term advantages for your clients. You can read more about the advantages of MTD and other myth-busting information in this handy guide.
If you’re looking for a more tailored approach to your client communications, you can arrange a free 30-minute consultation with one of FreeAgent’s MTD experts.