Constant developments in technologies like AI and cloud accounting are changing the way we do business and manage our finances. It’s a rapidly advancing field that has already changed the way most businesses think about their processes. So, what are the benefits of using technology in business accounting?
Let’s look at some of the most common accounting challenges businesses face and how tech can help you overcome them.
Cashflow is the lifeblood of any business. So, if your clients don’t pay their invoices on time, this can have a knock-on effect on your business operations and overall financial health. Last year, analysis from cloud accounting provider Xero showed that around half of the invoices issued by small businesses were paid late.
Over one in ten (12%) of these invoices were still outstanding a month after they were first issued. If you’re facing this problem in your business, you may struggle to pay your own bills. This can lead to strained relationships with suppliers – and you could even incur costly late-filing penalties from HMRC. So how can tech help?
While there’s no quick fix for late payment culture, using tools like automated invoicing can help minimise the impact on your business. Automated invoicing allows businesses to schedule client invoices in advance at a specific date and time. This not only saves you time manually issuing invoices yourself, but also encourages prompt payment by getting invoices to your clients as early as possible and chasing them for payment so you don’t have to.
Good financial management calls for accurate, up-to-date business records — but staying on top of your books can be time-consuming. If you and your team spend hours on routine recordkeeping tasks, you may not have time to focus on bigger-picture strategies. Entering your financial data doesn’t just take up a lot of time — it can also increase the risk of human error in your accounts.
Instead of entering your transactions manually, you could link your business bank account with your accounting software. This allows your software to automatically download your bank transactions so you can easily track your income and expenses.
While this feature has been available on most platforms for some time, it’s still evolving. Thanks to recent developments in AI and machine learning, software can often categorise your business transactions automatically, winning back more time for you to spend on your business.
Effective decision-making requires an in depth understanding of your firm’s fiscal health. If you want to implement a solid business strategy, you’ll need to do much more than balance your books and meet your obligations.
AI-powered accounting tools can take what they learn from your accounts to give you valuable insights about your business’s past, present and future. With technology analysing your real-time data, you can draw up forecasts, budgets, and other financial statements to help you make well-informed business decisions.
However, computer-generated reports do have their constraints. Even the more sophisticated accounting tools don’t include external factors like current industry trends and economic conditions in their predictions. To get a truly accurate picture of your business finances, you’ll need to harness the power of technology and expert accounting insight.
If you want to future-proof your business, you should embrace technology — but you also need to understand its limitations. We can help you navigate accounting software with ease. And if we find something that could improve your financial processes or boost your productivity, we’ll let you know.
Get in touch with our team to find out how we can use cloud technology to move your business forward.