How To Work Smarter With Cloud Accounting
Being an SME owner with limited resources, if you decide to handle everything on your own, you may end up spending little time on your core business. Managing accounting and bookkeeping on your own is not a wise decision as you are better off investing that time on more impactful and value-adding activities like business development and leads generation. The accounting function, whilst tedious, is an integral part of every business, and recent technology has made this task much simpler for you. In this post, we provide information on how moving to cloud accounting can help you work smarter and faster.
Key benefits of cloud accounting
Here are 4 ways cloud accounting can help you work smarter.
Automate invoicing workflow and speed up payment collection
The Covid-19 pandemic has completely transformed the global economic landscape and has brought many economies to a near-standstill with governments imposing all manners of lock down in a desperate bid to contain the spread of the virus. Under such an uncertain business climate, it is more important than ever for small business owners to tighten their purse strings and manage their cash flows to survive this unprecedented crisis.
In order to budget and forecast cash flows accurately, it is important to invest in an accounting system that is able to generate accurate financial reports for cash flow analysis. Many small business owners are now switching to cloud accounting software with user-friendly financial reporting functions to harness the power of digital technology to better manage their businesses. Many are utilizing the invoicing function of cloud accounting software to electronically send sales invoices to customers to speed up billing and collection and to shorten their cash conversion cycle. Here are some other ways cloud accounting can help you automate your invoicing workflow and speed up your payment collection:
Send invoices from any location using mobile application (iOS and Android)
Seamlessly integrate sales data with financial reporting system to eliminate manual data entry and maintain data integrity
Streamline workflow by automating invoicing (monthly, weekly, etc) for recurring sales transactions
Set invoice reminders in the system to automate payment collection
Allow easy online payment to customers by adding online payment gateways (like Stripe, PayPal, etc) to your invoices. According to Xero Blog, you can get paid up to 15 days faster when you use stripe to collect payments in Xero (Read more here)
Drive profitability and gain visibility
The success of every business very much depends on the timely assessment of the profitability of individual projects. Most small business owners start off using simple excel spreadsheets to manually monitor the time and money spent on each project. However, as their businesses grow and the number of projects increase, it is no longer efficient to continue using manual tracking to manage their projects. Xero Projects is a tool within Xero that helps you capture, track, and report the time and money spent on projects and jobs so that you can make better business decisions. Some of the functions include:
Create fixed price, time and materials, or progress payment invoices
Accurately track time on-the-go with stop-start timers and location-based tracking on mobile (both iOS and Android) – no more chasing timesheets (read more here)
Ensure your staff is working on the right things; see how your team’s time is spent on all projects with the Timesheets & Staff Time overview (read more here)
See how staff costs affect bottom lines; set an hourly cost rate for each staff member, so it’s easy to calculate overall profitability on a project
Read more here.
Manage company spending
Xero Expense is an expense management tool within Xero cloud accounting software that can help you:
Submit and track your company spending on-the-go from any mobile device
Streamline and automate the expense management workflow and reduce human error by eliminating manual data entry
Massive cost savings and improvement in employee productivity since manual data entry currently takes up 30% of accountants’ and bookkeepers’ time (see this article by Xero)
Seamless integration with cloud accounting software to maintain data integrity and achieve accurate financial reporting
Read more here.
Automate data entry
One of the key benefits of cloud accounting is the ability to integrate the accounting system with the rest of the operations to streamline workflows, reduce costs and improve employee productivity. Hubdoc is a data collection and management tool that performs the following functions among others:
Automatically files and organizes your digital files into separate folders for easy retrieval and document retention
Allows users to forward documents to HubDoc using a customized email address or upload via a mobile device
Its data capture function uses artificial intelligence and machine learning technology to extract information from uploaded documents for seamless recording into the cloud accounting software
Read more here.
Final Thoughts
Small business owners face a plethora of challenges, such as spending countless time and energy chasing overdue payments from customers, insufficient funds on hand to purchase inventory or settle outstanding bills due to lack of visibility of real-time cash flow position, and countless hours spent on expense claims administration, like chasing employees for claims submission, to name a few. By helping small business owners work smarter, cloud accounting helps solve all these problems and frees up precious time for the small business owners to pursue the things that matter most – growing their businesses and serving their customers.
Speak to your accountant
As small business owners ourselves, we understand your pains of wearing multiple hats and juggling multiple tasks whilst having to stay cost-efficient simultaneously. We are proud to be a Xero partner who can help digitally transform your accounting function so that you can work smarter and faster. Schedule a free 30-minute consultation with us to discover how you can reclaim your time and grow your business.
