How Online Bookkeeping can make you a better business owner
That's a bold statement that we'll just leave hanging for a while.
Let's imagine that you've just started a new business, got the tools of the trade/profession, maybe a van, car and computer. Today you may even have a tablet if you're mobile. You have all the best intentions in the world … you've spoken to someone who knows a friendly local bookkeeper and you know the process: keep receipts, record invoices and maybe even enter the details into a ledger (which you've seen on the shelf at your local stationery store).
At some point you're going to want your accounts 'doing', so, armed with your 10p carrier bag of receipts, another carrier bag of invoices and and a piece of paper with your business bank account login details, you drive to your new accountant and quite literally drop the contents onto their desk and ask them to work their magic so you don't pay any tax.
That's a scenario that many small business bookkeepers or accountants face on a monthly basis, especially in January!
What we at TFMC would like you to do is to grow as a business owner, to understand your business' financial position not just once a year, but on a monthly, if not weekly, basis and in so doing, you will be better equipped to 1) plan and 2) deal with any unforeseen expenditure.
Ok, so how can a cloud bookkeeping service make you a better business owner?
Online bookkeeping requires the business owner, often a sole trader, to be procedural: they must establish a routine and work to it, no excuses. So, when it comes to receipts & invoices, it is beneficial set aside regimented time to add the information to your new cloud bookkeeping system. Perhaps you can add information at the end of your working day (include it as part of your routine), maybe you don't have enough information to input each day, so go for once a week, preferably within working hours, say on a Friday afternoon. Working in this way gives you many benefits;
- Save money. You don't pay a bookkeeper or accountant to sift through your receipts and invoices (time which could better be spent working on your accounts).
- You give your day/week/month more structure. Ongoing success is best built on solid foundations, and by getting into a good routine early, you will give yourself time to think, with the right information to hand. This 'routine'-driven approach will be good for other areas of your business too.
- Be informed. You will know, at the click of a button, roughly how your business is doing. You'll be able to see your current (real time) and projected cash flow and your business' financial health. No more guessing or waiting until the end of the year to find out you owe HMRC £2000.
- If you're VAT registered, you'll be able to keep track of your VAT liability at any stage of the quarter and not be surprised when your VAT return is due
- You can use your new found business insights to plan, save and budget
- Many of the cloud solutions, such as the excellent Kashflow, also function as a Customer Relationship Management tool – you can store client details securely online, record where the client came from (such as social media, BNI, Google Adwords, newspaper ad etc) … which means that at some point you can break down you income streams and analyse which is most profitable.
- You can log in from any computer, laptop, tablet or even smartphone. If your desktop computer fails, your data and files are held securely online and you could just nip to your neighbour's for 20 mins, log in, add your receipts and you're done. No panic, no heartache, just a good system with a good backup strategy.
- Managing your business in this way will ensure that you're not hit by a 'sudden' financial earthquake – you won't be caught out by falling sales and increasing costs. You will be in control.
- (A bit) less stress. Now no-one will claim you'll ever be stress-free as a business owner, but armed with the knowledge of how your business is performing on a daily basis you'll be able to devise strong contingency plans.
- Automate regular payments so they're not missed – reduce the stress and workload by automating as much as you can.
- You're likely to have more regular contact with your bookkeeper, as they will have a login to you account too. This means they can spend the time they would have spent sorting receipts looking over your books and making changes where necessary. They'll also be able to see trends and maybe warn you of factors which could affect your bottom line.
KNOWLEDGE IS POWER!
Ok, maybe you're not going to take over the world just yet, but armed with the real-time knowledge of your business finances you will be able to make sensible and timely decisions. But best of all, you get to plan. Plan for growth and expansion, plan to increase sales, plan to succeed. Plan, action, review. If you run you business from day-to-day, from a carrier bag of receipts, from the dashboard of your van, you will struggle to get to grips with your business, where it comes from and what the next step is or could be.
The Financial Management Centre have created "The Online Bookkeeper", a cloud bookkeeping software solution designed to bridge the physical gap between business owner and bookkeeper. Using The Online Bookkeeper, clients can login, add their invoices and receipts, keep track of their bank accounts and much more. Our offices, situated across the UK support other online bookkeeping solutions such as Kashflow, Xero and ClearBooks so if you're already using one of these systems we can help you to optimise your accounts and get the most from your books.
We were one of the first multi-office accounting companies in the UK to offer an online or hybrid service, so it comes as no surprise to us that a recent survey found that SMEs and business owners are twice as happy with 'tech-savvy' bookkeepers and accountants. The online accounting and bookkeeping world has moved very in a short space of time, so fast that even well established corporations such as Sage have struggled to match the pace of the more dynamic and 'lighter' competition, such as Xero and Kashflow.
The period 2015-2017 saw an approximate 10% drop in 'spreadsheet bookkeeping' (down to 15% from 25%) as small businesses sought better solutions; ones integrated with their bank accounts, payment accounts and service providers, solutions that presented information in easy to understand chunks. People are used to being 'online' almost 24/7. They want shopping throughout the night, next day deliveries, instant access to insurance, banking and other services. They want instant access, and with The Online Bookkeeper service, supported by Kashflow, Xero and Clear Books, The Financial Management Centre are ideally placed to serve all businesses great and small.
What has online bookkeeping ever done for you?
Nothing. Well, apart from the information. You have lots of up-to-date information.
Ok, apart from the information … What has online bookkeeping ever done?
There's the security – once the data is 'in the cloud', it's secure and there are multiple backups.
Ok, apart from the information and the security.
What about the integrations with other online services such as bank accounts …
Ok, apart from the information, the security and the integrations …
There's the planning – online bookkeeping means you can make great plans too
Ok, ok, apart from ….
Sorry, I drifted into the well known, "What have the Romans ever done for us" Monty Python sketch there. You get the gist. Online, or cloud bookkeeping is a great way to start your business as it will get you off to a flying start and engender some great habits, and if you've yet to commit, why not give one of our offices a call to discuss how we can work with you to help grow your business. If we have yet to open an office near you, we can still work with you to get a great online solution, just call us on 0800 470 4820.