How digitisation is reshaping accountancy
Neil Sheehan Partner Consulting Manager, Xero (ACCA)
Digitisation is transforming the accounting industry. It’s improving collaboration with clients, offering real-time insights to inform smarter decisions and increasing security while also enabling firms to work from anywhere, at any time.
No truer has this been felt than during the pandemic. Firms had to get set up to work from home fast, so they could help their clients navigate government support packages. The digital tax revolution meanwhile gathers pace through Making Tax Digital.
As we reach the end of a turbulent year, here’s how digitisation will continue to transform accountancy well into the new year and beyond:
1. The power of data and insights
Data integrity refers to the accuracy and consistency of data over its lifecycle. When we provide insight-driven business recommendations and decisions, they must be based on reliable and accurate data.
Data that is collected, created and processed automatically, ensures that your clients’ information is tidy and you only need to check-in when there are anomalies. Cloud accounting software helps by using direct data feeds to automate tedious data entry tasks, ensuring that you’re working with a definitive, high integrity data set while saving you valuable time.
We’re seeing an increasing rise in business decisions based on real-time data and predictive insights. That’s why we’ve released several new features on our business snapshot and short-term cash flow tools and why we believe that supporting businesses to improve their cash flow will be a critical part of advisory services in the future.
We also know that lenders are tightening their risk profiles and access to capital is increasingly becoming a challenge for small businesses. Our recent acquisition of Waddle, a cloud-based invoice lending platform, was important for us to support our customers to better manage cash flow and gain access to working capital as needed.
2. End-to-end digital tax and compliance
Overseeing and maintaining compliance and legislation for your clients is a key part of your role in supporting your clients. With the volume of reporting requirements increasing alongside tax transparency requirements, automation is key to help connect the dots.
For example, Xero’s new tax filing and accounts production solution Xero Tax lets you seamlessly connect your client’s books to your accounts and tax production work. This technology saves time and double-handling - saving 2-3 hours per job in some cases - enabling accountants to reduce errors and cut costs.
3. Connected services
From offering tax advice to helping companies report their financial situation to bookkeeping and data analysis, I know just how varied the job of an accountant can be.
Accountants are often business owners themselves, so they understand all too well what it’s like to spin a lot of plates. It’s vital for accountants to access the apps and extra services that can help connect, run, track, manage and report on their business as well as their clients’, simply and quickly. These solutions can be integrated seamlessly and within one platform using cloud technology - from apps like Receipt Bank which automate data entry to lending solutions like MarketFinance.
4. Pivoting business models
Accountants are perfectly placed to assist their clients in pivoting to new business models. As we know, the pandemic has seen a surge in small retailers moving from bricks-and-mortar centric business models to e-commerce driven models. Advisors can help SMEs to take stock, consider risks, create an updated financial plan and finally, adapt. They can also advise on the best e-commerce platforms that are suited to their client’s unique needs.
It’s been a challenging year for the accounting industry and small businesses alike. Encouraging clients to digitise before it’s too late, will enable them to streamline processes, be compliant and increase productivity. In turn, this will help them prepare for the challenges and recover.
If you’re an accountant or bookkeeper in practice, sign up for the Xero partner programme and access Xero Tax. You’ll get the tools, resources and dedicated account management to help get your practice and clients set up for success. Visit www.xero.com/xero-tax-partner to get started.