Some of you will be struggling due to closure of premises, inability to trade or trading at a reduced level, but the pandemic presents a unique opportunity to use the time and lull in activities to get ready for trade re-opening fully and change how you do things. You may change how and what you sell (pubs doing take aways and inviting food vans into their car parks is one simple example), but we’re talking about the accounting processes behind it all.
Those clients who already use a cloud accounting system are seeing huge benefits and particularly those who use add-on applications which enable them to streamline processing, automate invoice delivery and debt chasing etc.
As an example, we implemented a purchase ledger system which allows our accounting team to submit invoices into an App called ReceiptBank, have those invoices automatically processed with little human intervention, posted into Xero as draft, then emailed to an appropriate authoriser for approval, using another App called ApprovalMax – all integrated into Xero and fully automated.
The time and space saving is significant and yet the ongoing costs are minor once the system is set up.
So, as we come out of the Covid cloud (hopefully later this year), I strongly recommend using the last few weeks of lockdown to undertake a review of your accounting systems (or ask us to do so). But it needs to be appropriate: don’t “digitize” for the sake of it.
Here is a checklist of the more common areas that benefit from some of the cloud based options (and add-on Apps) in Xero, which you could use to review your own processes and see where improvement is possible:
- Sales, purchase and overhead invoices – stored in Xero, attached to transactions
- Lease, HP & loan agreements – stored in the files section of Xero
- Bank statements – use a feed to pull all info into Xero, but store year end or month end statements in Xero’s file system
- Order processing, fee generation & storage – all via Xero standard processes using email
- Recurring sales – Xero can auto create new invoices periodically, ready for sending
- Chasing & taking payment – Xero auto reminders by email and add-on (Go Cardless, Stripe etc)using web links for online payments or direct debits)
- Credit referencing and automated debt collection – via Satago or Chaser add-ons
- Processing, recording and selling – auto re-orders and low stock warnings via email via one of the numerous Apps
- Making and approving orders – via Xero using email or numerous add-on Apps (ApprovalMax, for example)
- Invoice approval – via Xero or ApprovalMax add-on…all online or via email
- Processing invoices – auto read, process and code via ReceiptBank
- Scheduling payments – use Xero payment dates
Reporting & cashflow
- Monitor budget v actual – direct in Xero or via FUTRLi reporting add-on
- Cashflow forecasting – get auto warnings emailed when predicted bank balances fall below your target via FUTRLi
You’ll notice the common theme is email/online web access and automation to save time and money (and to allow remote access from multiple locations, simultaneously), but even basic reviews of how and when manual processes are done might help.
For example, some businesses benefit from processing their fees or sales mid-month, rather than month end, so they hit their customers’ payment cycle the next month, rather than 2 months later.
Love it or hate it, technology has won through necessity and businesses who want to be ready for the next pandemic cannot return to pen and paper!