How accountants work these days

Everyone is talking about disruptive technology and how this has changed all professions and accountancy is no exception.

We have seen a huge change in our profession from traditional desktop applications to cloud-based packages that all link to each other and do useful and necessary tasks very quickly and efficiently.  We have been getting lots of queries lately about what exactly do businesses need and how accountants can help businesses.

Excellent question well presented!

In the past accountants could not hold real-time information to help business owners make day-to-day decisions because they acted more as compliance monitors, making sure taxes were paid, submissions submitted, and financials printed and signed.

The Companies Act guided accountants on the minimum number and type of records that should be kept and what directors should have as a minimum financial position to be compliant; i.e. dividend payments and liquidity test etc.

Since we were always looking at what had been, people probably did not appreciate the accountant’s role because they always seemed to have to hold their breath and hope the accountants didn’t come up with last minute problems, find mistakes or have bad news.

In the last two years, the availability and reliability of cloud accounting has made it possible for accountants to have up to date (almost to the minute) financial data to send to business owners and directors that need to make quick and informed decisions. Information is pulled from systems in seconds and reports can be generated that make everyone’s life easier and better informed.

With this instant processing ability our role has changed from looking backwards to looking into possibilities and scenarios and properly helping people with financial and business issues. 

Compliance is still necessary but the time to process the bank statements has gone down to minutes instead of hours and our time can be better spent asking, “how can I help”?  What is your burning problem? Is there anything specific you need like costings or GP reports?

With data extraction tools like ReceiptBank, Auto entry, Rubbler and others, supplier invoices and information regarding them can be processed in your accounting packaging, making it easier to extract useful information. For instance, you can allocate supplier invoices to a project and ultimately calculating the GP% of a project without changing the way you account for a specific transaction.

Float is another useful tool that links to your Xero package and extracts cash transaction information to help you create a cash flow budget with scenarios for different outcomes. For instance, if you run your business on a breakeven sales number, with 10% net profit sales and 20% net profit sales, you can input these scenarios into Float, and it will project over a period what your cash flow situation will be if these sales are met or not. This helps and motivates business owners in reaching their targets and helps you sleep at night.

Many payroll programs also now integrate with Xero to eliminate the time it used to take to process the payroll and then reconcile those payments back into to the accounting system. It can also submit the PAYE payments directly and a report is provided to show if all submissions were successful and what, if any, errors there may have been. 

So, what you should see when you engage with your accountant now is less time spent on processing and compliance work, and more reporting and scenario planning.

As a minimum you should have:

• A cloud accounting package – we like Xero, but you can use Quickbooks, Sage, FreeAgent etc

• An online payroll programs

• Data Extraction tool like ReceiptBank

• Cash Flow budgeting tool

But none of this happens just because I wrote a blog about it!  Your accountant is also human, and you need to communicate with them and tell them what you need and why. Good communication is the key to a successful relationship and key to a successful business.

Don’t laugh, but this happens a lot. You need to answer your accountant’s emails and provide them with the information asked for because although everything is online, that doesn’t mean they can just ‘ask the cloud’ for the information (yes, we have had that before).

Even though the bank transactions are extracted into your accounting package, there is always a chance that transactions can be duplicated or go missing. Here is a link to the Xero site for updates on bank feeds that are experiencing problems.

If compliance is all you require from your accountant, then let them know that. If you want the latest bells and whistles, tell them that, as well as why you want them, and they will help plan an appropriate strategy. 

We have a dedicated Xero advisor and if we have any questions, we ask her directly and she is very helpful and always gets back to us. We also watch loads of training videos and go to conferences to see how we can help our clients get the best out of their businesses. We also have experience of what has worked and what not. So, ask us, we don’t bite 😊