accountancy

Your Virtual Accountant

Today was like many others, but perhaps a world away from just a decade ago for an accountant and client working together.

We wrestled through bank reconciliations, talked through accountancy adjustments, mulled over cost-drivers and shared insights around areas for growth.

We were face to face and looked at the same screen with the same figures. Perhaps nothing particularly strange so far.

Yet we were 100s of miles apart.

We worked together all day. Like we were in the same office (but we were far from it). This was made possible by Google Hangouts, online banking and cloud accounting software (Quickbooks today).

Don’t be restricted by geographical boundaries when seeking financial and tax advice for you and your business. Get the best accountant and tax advisor you can – no matter where they might be….

 

How to get to grips with your business finances

It is easy to get caught up in ‘doing’ rather than ‘running’ your business.

So many business owners find themselves running simply to stand still – finding new customers, taking and fulfilling orders and addressing (hopefully not too many) customer complaints.

Sometimes its difficult to see the wood for the trees:

I’m really busy so I must be making money – right…?

Not necessarily.

Understanding your business finances

It is understandable that, at the end of a busy day working in your business, you would prefer not to review your business finances. But if you don’t understand the numbers that your business is producing then how will you know which bits are working (and profitable) and which bits of your daily work are simply a waste of time and effort?

I frequently recommend that owners of new businesses sit down (at least weekly) with a pencil and journal (yes, that technical!) and write out the week’s sales figures and costs by hand. I find that there is something more insightful about using a pencil and paper compared to an excel or similar spreadsheet – perhaps its the exercise of writing by hand that makes you think more deeply about the figures and how they connect (or not…).

At its most basic, to write out your sales income (ideally split across services or products) and associated costs, will give you a much clearer view of what is profitable work and what is unprofitable – the figures rarely lie. You would be astounded how few entrepreneurs do this simple exercise – and by the number of business owners whose jaws hit the desk when they realise why (or even that!) they are losing money you can tell they wish they’d done this far earlier!

Moving on from pencil and paper to the day-t0-day, I’m a big fan of online cloud accounting packages like Xero as they provide a live dashboard view of the health and performance of your business. Now with live feeds across the majority of UK banks, entrepreneurs can get a realtime view of the health (or otherwise!) of their business. The bank balance is clearly there to see plus debts receivable as are costs payable. Cashflow is absolutely king for all businesses so the ability to see how much cash is in the bank, how much is due in and how much is due out at any one time is crucially important if you are to be in the driving seat in running your business.

Don’t get put off by accountancy mumbo-jumbo, simply by taking the steps set out above on a daily or at least weekly basis, you will be streets ahead of many of your competitors who are ‘busy being busy’ with no clear focus or direction on what works for the future of their business. Try it. Let me know how you get on.

If you are a digital, tech or creative business and you would like some assistance in getting a better grip on your business finances then please drop me a line.

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Hate Accounting! Or Love Accounting?

The accountancy industry, like every other, is going through a rapid period of change. When I read posts like this, I feel a little despondent.

It gives me that awkward feeling that I get when people ask me what I do at dinner parties or networking events? I stumble between:

  • “I’m an accountant”
  • “I’m a tax advisor”
  • “I work in finance”
  • “I’m a tax partner”
  • “I’m a creative accountant”….mmmh , perhaps not!

It all feels a little apologetic and understates the value we can provide. I think that as an industry we’re a misunderstood bunch, yet we’ve only really got ourselves to blame.

I believe that there is a common misconception amongst business owners between accounting or bookkeeping on the one hand and business advice on the other. The former relates to data capture and entry (which is important yet mundane) and the latter is what can make entrepreneurs healthier and wealthier.

John O’Nolan makes some great suggestions on how we can embrace the ‘uninterestingness’of many aspects of accounting work and turn it to our advantage – some ideas which are already being embraced by new firms in similar ways – but I believe he misses the mark in relation to business advisory services. Dealing with the bookkeeping aspect first, I believe that we are getting closer to creating a solution with the emergence of cloud based accounting software e.g. Xero and Freeagent, which is intuitive and provides realtime data access.

Yet business advisory services covers the whole gambit of a business lifecycle from initial advice on structuring the business on startup, to raising finance, growing the business and making acquisitions and disposals. It involves treating the business and business owner(s) as one, providing all-round tax and strategic advice. Sometimes its just a shoulder to lean or being a sounding board when an entrepreneur has some tricky seas to navigate and is perhaps feeling a little isolated at the helm of the ship.

But there’s far more as an industry that we can do.

For me the real killer move for accountancy professional service firms will be the shift from a position of information or intellectual property protection to information flow management. We’ve spent decades building huge barricades around our knowledge in professional firms to ensure that we get maximum value on consultancy services yet the waste and cost to our economies of this information not getting into the right hands (in time) must be astronomical. Let’s turn it on its head and set the information free to get to the right people as and when they need it.

Tomorrow’s accountancy firm winners will be those that can get relevant information in the hands of business owners first – business advisory information that gives entrepreneurs that “Aha” moment right when they need it – perhaps John O’Nolan and those of a similar ilk would then change their perception from HA! to LA! (Love Accounting!)?

Moving from a mindset of information or idea protection to idea release will be difficult (perhaps more difficult than identifying the tools available to achieve it) but it is the critical next step in my mind if business advisors are to be able to demonstrate their expertise and relevance in an increasingly noisy market.

Back to my dinner party “what do you do?” question: how about this response?

“I help entrepreneurs turn great ideas into great businesses”

Any takers?

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Using an iPad for accountancy work

The reaction of my work colleagues to my  iPad is still a mixture of “Wow, can I have a go” and “Steve, stop playing with it” or “have you found a use for it yet?”.  The latter is particularly intriguing as I can be busy writing (work!) notes on the iPad yet people automatically interpret it as “playing” rather than working – although, yes it is soooo much more fun working on an iPad!

As I mentioned in a previous post (see below), it is the strength and depth in availability and functionality of iPad applications that will hold the key to success of tablet devices such as the iPad in the workplace.

I am currently finding the following apps of most use day-to-day:

Notes – comes pre-installed on the iPad and provides a useful work journal that I use for internal meetings. Handy because you can email your notes around with action points immediately after the meeting rather than having to get typed up if handwritten.

Dropbox – great to synchronise files (in the cloud) between the laptop and the iPad – free.

Penultimate (£1.79) – nice to be able to sketch out points on an application which is much like a moleskine in look and style.

Osfoora HD – elegant, crisp and lightening fast Twitter application that is well worth the £2.39 price tag.

Reeder – a superb, clean and simple RSS reader which synchronises nicely with Google Reader accounts.

WordPress – free app that synchronises with WordPress blogs and allows you to compose and edit posts directly from the application (far simpler than trying to edit via Safari).

FT Mobile Edition – somehow the font and colour of the Financial Times newspaper is particularly pleasing at the start of the day. A great free app – although registration is required once you hit a monthly article limit.

Bloomberg – a superb free app to follow latest moves on the stock markets, indices, reports and podcasts.

I am looking forward to testing the Apple iWorks office applications and others over the next few weeks and will report back.

The iPad is already changing how I work now and how I can foresee work practices changing in the short to medium term. How long before laptops become a thing of the past?

iPad for accountants

Having promised myself that I would await version 2 of the iPad before succumbing, I found myself in the Apple store on launch day handing over my credit card with the following internal mind wrestle – my head saying “you don’t need this” and my heart laughing: “yes you do, look at it…it’s beautiful”! (Result: Apple win yet again!)

So what are my first impressions one week into owning an iPad?

Firstly, I should caveat the fact that this is my first ‘proper’ week of playing with it as I spent most of last week with my iPad largely out of action (see Getting Started with iPad tips below).

It is a quite brilliant device for consuming media such as video, books and online articles as the screen is unbelievably high res and responsive to touch. Zooming in and out on photos is amazing. I am just getting started with the 1,000s of apps.

Using an iPad for work in accountancy

Explaining difficult concepts in easy to follow and ideally entertaining ways is the key to building relationships with clients and identifying new opportunities. There is little doubt that the iPad will make a stunning tool for flicking through presentations alongside a client or prospect or as a light-weight note-taking tool for meetings etc.

The jury is still out as to how useful the iPad might be for day-to-day work in the office given most PSFs’ ongoing reliance on Excel, Word and the other usual Microsoft Office suspects. Dennis Howlett has already provided a good summary of the shortcomings of Apple’s Numbers yet seems equally enamoured with the device as a new business tool. Richard Messik also seems pretty smitten.

Lawyers are already busy experimenting with iPad applications for work practises (Peninsulawyer has some good summaries of latest experiences and tips, as does Jason Plant) and the overall consensus (hope?) so far seems to be that we have a fair way to go before it transforms the way we work today but that – with enough prompting and feedback – iPad applications will evolve to meet the needs of users and get us closer to a potential game-changer.

Given this, accountants, lawyers and other professionals need to be experimenting with the iPad and feeding practical business needs into the app development community so that the relevant apps can be built. Likewise, our clients will expect us to be adopting latest working practises and business tools, as will the bright young Gen Ys entering into our profession.

Seth Godin is already banging the drum for the ipad applications that he would like to see developed – his requested Fixing Meetings iPad app already gets my vote!

Post script – iPad teething problems and solutions:

Gettting started with iPad
Tip No.1: Never buy an iPad then disappear on holiday (like I did) without first ensuring you have your Macbook or pc with iTunes preinstalled and a wireless network to hand. Why? Because you need to sync your brand-spanking-new iPad with iTunes before it will activate. iTunes also needs to be connected to the Internet to sync. I happened to have my MacBook but no Internet connection – so I had to trudge around sunny Rhosneigr looking for a wireless connection. It literally takes 30 seconds to activate once you get connected – it was just the preceding 3 hours of locating a wireless hotspot that was the hindrance!

Tip No. 2: You also need to be online to active the 3G card (if you have a 3G model). I had activated my ipad via iTunes but had then disconnected before the option to download the “carrier” information had flashed up. This meant that every time I tried to get online via 3G it kept coming up with a “cellular network” error. Grrrr. Lesson learnt.