Adam Croney, Partner at Thomas Westcott Chartered Accountants, describes the five stages of becoming digitally mature and truly harnessing the power of cloud-based systems.
Over the last few years, businesses have moved to cloud-based accounting systems to comply with Making Tax Digital.
But your journey shouldn’t stop there. In fact, adopting the software is just the first step towards realising the range of business benefits this technology can provide.
In a recent Chamber event, I took members through the five stages of digital maturity. Here’s a quick summary of each step and what it could mean for your business.
1. Getting a Cloud accounting platform in place
By now, businesses should already have moved over to a cloud-based accounting system, like Xero and QuickBooks, to meet the requirements of Making Tax Digital. We have helped, and continue to assist, many of our clients to find and set up the best software package.
Moving from traditional, paper-based systems to the cloud is a milestone. However, many businesses get stuck at this point without really benefitting from the technology.
2. Establishing a bank feed and invoice automation
Transitioning to a cloud-based system means you can automate many of the laborious processes traditionally carried out manually in finance teams. The next natural step for a business to take after moving to the cloud is to establish a bank feed and set up automated invoicing.
This can have a transformative effect on a business because it frees up staff time, meaning employees can focus on more strategic or creative work. What activities could you make time for in your business if you automated some of these processes?
3. Driving efficiencies and improving finance processes
Almost any process can be made more efficient once you’re on the cloud.
Every business will have different priorities when it comes to choosing which areas to focus on. A firm that spends hours each month handling staff expenses could move to dedicated payment cards.
Moving your CRM (customer relationship management) system to the cloud could help you gather and manage complex customer data, enabling you to overhaul your approach to marketing. And, of course, businesses of all sizes and across sectors will benefit from having more efficient credit control processes.
4. Reporting and forecasting
Being on the cloud means having constant access to real-time data, giving you an instant and up-to-date snapshot of cashflow. Are you using this to your full advantage? This information can provide valuable insights into all areas of your business, giving you the tools for sophisticated reporting and forecasting.
Moving to this stage of digital maturity means using cloud-based systems to manage your business at a much more strategic level.
As accountants, it means we can really add value and provide you with business advice all year round.
5. Operational and sector specific add-ons
Those businesses that become digitally mature adopt add-ons to support their operations. This could mean a manufacturing firm using a cloud-based system for stock control or a hospitality business adopting a piece of software to manage complex staff rotas, for example.
While it can be overwhelming to consider all the possibilities, remember that not everything will be equally important to your business. It’s about prioritising those areas where cloud-based systems can add the most value.
To find out more about how Thomas Westcott can help you to harness the power of cloud accounting, please contact me or a member of the Digital Team: digital@thomaswestcott.co.uk
