In this day and age, it is no longer good enough for accountants to know about new technologies. They also need to be able to adapt it, tap into its full potential to stay ahead in the market, and drive business success for their clients and themselves.
That brings us to a new, relatively new term on the block, i.e., real-time accounting. It refers to the process by which users can access most up to date financial data from any device, any place, at any time thanks to the cloud.
This has manifold benefits for an accounting firm, particularly given the intensely competitive industry where data-driven decisions may need to be reached, and clients have to be pleased promptly.
With real-time accounting, accountants as well their clients’ can get access to accurate and most up-to-date financial information they need at the exact moment they need it. Adding to that, let us discuss seven ways in which you can benefit from real-time accounting:
1. REAL-TIME DATA COLLECTION
Data collection traditionally involved requesting records, organising and storing data, and extensive time spent on bookkeeping. This meant that obtaining adequate data to develop business solutions took a substantial amount of time.
With real-time accounting, data collection and query resolution can take place in a matter of minutes or even seconds for your clients. There’s no waiting around, no data entry, and no paperwork. They make it simple to capture, process and share all financial information instantly.
Applications such as Receipt Bank, Hubdoc, AutoEntry, Xero, QuickBooks, Zoho Books, and practice managers like Senta, AccountancyManager and others help in timely collection and keeping accounting data secure on the cloud.
They also streamline the workflow to make things easier for every staff member of your firm, allowing automation of tasks like reminding clients about documents, deadlines due, or discussing queries on the go.
2. Real-time business KPIs
Measuring business KPIs in real-time allows accounting firms to ramp up their productivity and advisory skills tremendously., The use of tools such as real-time dashboards and scorecards gives you better visibility of business trajectories, which lets you adjust and align your short-term or long-term objectives and identify areas which are doing well and those that require some changes.
You can proactively track and discuss with your clients’ variables such as the revenue per customer/product/location, customer life cycle, overall profitability and many more such KPIs with the help of real-time accounting.
Data-driven insights backed with real-time data can also help make quick corrections to prices as needed based on revenue and profit needs. By staying on top of business KPIs, you can also contribute better to the overall strategic decisions of your clients’ business, including areas that require more attention and the areas to exit, if found unprofitable.
3. Real-time cash flow forecast
Cash is the lifeblood of every organisation, and your clients need to always have a finger on their business pulse to gauge how much money they will need for current and future requirements, especially when things are uncertain such as the present COVID-19 situation.
With real-time accounting, you can get them daily or even hourly updates on the kinds of inflows and outflows they can expect soon. Accordingly, you can plan for working capital for your clients.
Real-time data also allows you to assess the possible impact of different external and internal forces on your client businesses, which again can help them prepare in advance for additional cash flow requirements.
4. Real-time client advice
With real-time data, client-related decisions no longer have to happen after days or weeks of deliberation. You always play on the front foot by offering proactive advice to your clients and promptly respond to changes in tax regulations.
At a click of a button, real-time accounting let you check critical factors affecting business performance and ultimately drive business in the right direction.
This allows you to improve the customer life cycle and complete projects faster. As a consequence, your accounting firm also has the opportunity to charge your clients upfront for advisory services rendered quickly.
5. Real value addition in every client meeting
With real-time accounting, client connections go far beyond the occasional physical meetings. You connect with your clients over Skype for Business or Zoom or other video calling apps to answer any immediate questions or check in to provide project updates.
This also helps to make physical meetings more productive by keeping discussions to the point. With real-time data coming in, you and your clients can also have purposeful talks on how to grow and improve business performance based on current market trends. Action plans can now be executed in real-time.
6. Expedite compliance and drive more growth and revenue
With real-time accounting, your firm can perform its tax and compliance work much faster and more accurately than otherwise. This not only frees up your time but also gives you the luxury to choose whether to expand your service portfolio or focus on a niche area.
You can also nurture your existing client relationships and engage in more complex projects with them as the trust is solidified. This, in turn, allows you to win more clients through word-of-mouth and also expand your capacity by marketing yourself to more clients. You can also be of service to your clients by becoming a Virtual Finance Director, CFO, or Business coach.
7. Getting ready for MTD for income and corporation tax
By 2021, all businesses, self-employed and partnerships and landlords will fall within the scope of MTD (Making Tax Digital). They shall be required to report income tax and corporation tax summaries quarterly rather than once in a year.
Real-time bookkeeping will be of immense help for this. With data coming in consistently, you will find it much easier to compile all the inflows and outflows of your clients for a month or even a week on the cloud, which will help them stay MTD-compliant at all times.