At Thomson Cooper we have always held the view that not one size fits all and such have taken a software agnostic approach. The core cloud accounting platforms used by many of our clients are Xero, QuickBooks Online (QBO) and FreeAgent.
Cloud accounting removes the need to install a desktop application or have a stand-alone device acting as a server. With cloud accounting you access the platform via an internet connection through a browser, meaning you can access your accounting information from anywhere in the world. Cloud accounting has advanced greatly and is far more than just a ‘Making Tax Digital’ compliant solution. It has become the most time and cost-efficient way of processing your accounting records, further enhanced by the wide array of applications available to “bolt on” which combined are commonly known as the “app stack”.
Below follows a simple example of using the core accounting software along with a couple of apps to show how automation of bank recording, supplier ledger processing and credit control can increase efficiency, to save you valuable time and improve cash flow.
The online banking platform brings the functionality of connecting your accounts to automatically pull the transactions into your accounting software. This eliminates the need to process or import the transactions and increases efficiency.
By setting up bank rules within your accounting software the first time you connect your feed it will increase your efficiency by saving time processing the same banking transactions every month.
Automation of Supplier Invoice Processing
With the Optical Character Recognition (OCR) software Dext, which plugs into Xero, QBO and FreeAgent, you can fully automate your supplier ledger processing. Dext is an artificial intelligence solution which makes use of OCR by reading an invoice and looking for key items such as name, invoice number, amount, etc. It has great accuracy rates and helps to maximise efficiency.
The real automation driver of Dext however, is the Auto Fetch feature. Auto Fetch allows Dext to connect to thousands of supplier accounts, all you need is an online login with the supplier. Whenever a supplier raises an invoice on their system, Dext will automatically receive the invoice and, by establishing supplier rules similar to bank rules, it will pre-determine what nominal code such invoices should be posted to. In addition to this, by using the Auto Publish feature, it will automatically push the invoices through to your accounting system so there is no input required on your part to process your supplier invoices, but you do have to review and can amend any postings.
Fed up with having to find and keep all the small receipts in relation to your accounts? How many are misplaced or lost? Eliminate that possibility with receipt capturing tools from within your accounting software – Xero, QBO and FreeAgent all have their own receipt capture tools. The feature involves taking a snap of the receipt, the software will extract the information and match it against the banking line which correlates to the spend. This then saves an attachment to the transaction meaning that should you lose it there is no need to worry as it is compliant with HMRC’s record keeping.
Late paying customers can obviously have a negative impact on cash flow. Not only that, what is the time cost involved in chasing payment? Each of the mentioned accounting software have their own “automatic reminders”. This is a handy and virtually free way of chasing outstanding invoices, although it must be pointed out that the automatic reminders are only effective if the bank reconciliation is up to date – there is nothing worse than chasing a customer for payment who has already paid!
In addition to the functionality of invoice reminders, there are also third-party applications which are specifically designed for the function of credit control. Chaser is a fully automated invoice reminder system which claims that, on average, it’s use results in getting paid 16 days sooner and saves 15 hours a week on purely chasing outstanding invoices.
Now, the above all sounds like the ideal scenario but how do you get there? Have you been using a legacy accounting system and yet to move to cloud-based accounting?
“That’s different to how I have been doing it for years”
“We’re too big for the likes of Xero”
“Bank feeds, how secure are they? I’ll just process my statements as I have always done”
These are just some of the common things we hear at Thomson Cooper before undertaking implementation and training projects. It is completely normal to have such concerns and be cautious when it comes to change.
We are increasingly finding that business owners are keen on further training from us where we specifically focus on an app stack. Many businesses have moved from desktop software to cloud originally for MTD purposes and, after finding their feet on cloud software, they are looking to make use of the features of the app marketplace to further increase efficiency.
If you would like to learn more please do not hesitate in contacting Partner Elaine Cromwell at firstname.lastname@example.org or Outsourced Finance Manager Arran Anders at email@example.com for a free initial consultation.