Bivek Sharma, Head of KPMG Small Business Accounting, reflects on the impact the digital revolution is having on accountancy, and assesses the business benefits of shifting away from the parchment and quill approach…
The very nature of accountancy has experienced major transformation over the past decade. With cloud accounting software becoming increasingly advanced, cost-effective and easily available to businesses of all sizes, the shift towards complete digitalisation is within sight.
As is often the case, some people shy away from change. There’s a tug-of-war between the new school of thought – tech-savvy accountants hungry to embrace the many benefits advanced technology can bring – and the old school, advocating a more traditional approach.
As accounting professionals, our role is to ensure that as we enter this new era, we’re helping small businesses to fearlessly embrace change, and utilise the full breadth of benefits offered by modern technology.
But what are the benefits for small businesses? How can cloud accounting really make a difference?
Freeing up time
How many hours a week do you spend on financial admin? Our research report “An Agenda for Growth” found that 38% of small to medium sized businesses are distracted by admin on a daily basis, leaving aspects of the business such as growth and generating new leads to take a back seat. With the assistance of technology and automation, accounting processes can be streamlined, leaving more time to devote to core business priorities.
Your books should consist of more than a pile of receipts sitting in a drawer. Keeping a detailed record of your numbers is a must. Modern technology can help you to say goodbye to that disorderly heap of paper. There are online bookkeeping services available now that allow business owners to simplify this, and simply photograph receipts and invoices – sending them directly to one cloud space. This allows the system to automatically log all receipts onto the system – making life a lot easier when it comes to tax return time.
Live financial information
With so much detail to consider, manually forecasting finances is never easy, but with the assistance of cloud accounting it is possible to receive live data and accurate forecasts to help manage cashflow and plan for the future. This is particularly useful for companies seeking investment or a bank loan, as forecasts are live, evidenced and can provide an accurate valuation of the business and its potential.
Payroll made easy
The administration around paying staff can be a real headache. Calculating PAYE and NI liabilities, sorting out holiday pay and dealing with maternity/paternity leave can consume valuable time and resource. With the assistance of modern technology, payroll management can be automated; ensuring HMRC’s standards for real-time information (RTI) are met and freeing up time for running the business.
Digital tax returns
In the March budget, the coalition government announced plans for the end of paper tax returns, paving the way for “digital tax accounts” by 2020. With that in mind, it’s never been a better time to ditch the forms and take your own accounting online. Integrating all financial operations into one channel will undoubtedly put businesses in good stead for the change.
With a balance of innovative technological solutions and face-to-face expertise, KPMG’s Small Business Accounting service can help companies to embrace the benefits of modern technology with confidence and understanding. Our customers receive access to a dedicated accountant and a personal portal page, providing live information and projections at the click of a button – it’s like a virtual Finance Director who puts your figures at your fingertips 24/7!
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