Running a business takes still and commitment. However, not all business leaders have a long- term vision of how to keep both finances and company books in check. This can quickly lead to the downfall of a small business.
Ensuring you have a real-time view on payments and finances, and how these evolve over time, is vital. This is especially important when it comes to irregularities that might slip through the net. For example, according to a recent market overview, almost all (91%) of midsize company leaders said their businesses are facing challenges due to inflation.
So, if you’re a business leader that dreads the manual inputting of data (from the stash of receipts in a bag for the end of the month), these tips might be the solution you didn’t know you needed. They might just help you cross the line between just surviving, and thriving.
1. Embrace emerging tech
Accounting software is well-known for its automation and time-saving capabilities. It can scan and upload data from invoices and receipts in bulk – still a widely carried out manual process – and auto-fetch data from a whole range of sources, including bank statements, online transactions from retailers, e-commerce platforms, and payment providers.
This data is then collected into a central platform and converted into a standardised format. As this happens, it is also checked in real-time for accuracy and irregularities, forming highly-accurate data sets without the need for manual checking. Rules can be created for different categories, meaning that Uber receipts are always labelled as travel expenses, for example, and Adobe receipts are pinned as IT costs.
This process of automation and categorisation is perfect for the ever-emerging world of AI. Its ability to continuously learn from the data it works off provides continuous improvement to its capabilities. It goes beyond the ‘automator’ role, turning into a creator, with generated invoices and reports, and an adviser, with guidance on trends and best actions for clients to take (as discussed later). This could include having greater capacity to identify financial challenges quickly, instead of waiting a whole month. Alternatively, this can also create capacity to potentially take on more revenue driven work.
2. Be aware of being caught out by regulation changes and tax rates
It’s all well and good having your books up-to-date, accurate and automatically sorted. But what happens if regulations suddenly change and you have to check that all of your inputted data is compliant?
With accounting standards updated periodically by the Financial Reporting Council, you should set up your accounting software to automatically update in line with these changes, making sure data is renewed accordingly and fully compliant.
And when it comes to tax, through using software, you should split out fees and taxes for accurate sales figures. The system can automatically update with correct tax rates for both local and international sales, allowing you to accurately record data regardless of location or jurisdiction. And you can also set tax rates based on suppliers, meaning that you only pay the correct amount of tax for each transaction and that data is extracted in the relevant currency. Again, it’s about combining strategy with technology to save time that can be redirected into higher-value tasks, and not leaving yourself vulnerable to hefty fines in a turbulent economic climate.
3. Remodel your use of time to give back to your business
AI can analyse vast amounts of financial data in a snippet of the time it takes humans. This, crucially, allows you to remodel how you use your time, with business leaders able to conduct evaluations to improve operations, task allocation and overall efficiency. Guided by AI-powered insights, for instance, you can effortlessly review individual clients or your whole portfolio to spot trends, identify problems before they arise and make data-informed decisions.
This creates more value for your business and subsequently positively impacts your own bottom line. This oversight is equally as important in managing your own resources, also providing further insights on team performance and forecasting metrics for your business.
Tips to thrive, not just survive
As challenges grow in the face of continued inflation, finding a way to have a real-time oversight of finances can make all the difference for SMBs. By embracing technology, you can develop a bookkeeping system that is up-to-date and transforms your data input processes.
With a compliant-aware mindset, these systems can also ensure that data adheres to regulations and varying tax rates. All this creates a streamlined workflow and efficiency that frees up valuable time for business leaders and accountants to make data-driven decisions and optimise their business performance.
There is a future where business is easier than it is today, one where accounting systems and processes save everyone time. These three tips are just a small start, but they can help form a bookkeeping strategy for SMBs to thrive, not just survive.