Chartered Accountants & Business Advisers


This must be my profit, it says so on my phone!

“It’s on my phone so it must be right!” said a client of ours recently.

And it struck me that because we use our phones for pretty much everything, we tend to assume they tell us the right answer all the time.

But perhaps your smart phone is not so smart after all – or perhaps the users aren’t!

I’m talking here about the phone apps that accompany cloud accounting software packages such as QuickBooks and Xero.

QuickBooks and Xero

They’re an extension of the software you can also access from a laptop, PC or tablet.

They let you carry out data entry on the go, such as new purchases and sales invoices, and access some reports, such as the Profit & Loss report my client was looking at.

Apps the way of the world and it’s Canute-like to think this technology is going to disappear. It isn’t.

So the trick is to understand and use cloud accounting apps properly.

Is data entry on the go really a good use of your time?

It is if you use an app such as AutoEntry which allows you to take a photo of your receipt and will code it ready to be imported into your accounting software, along with the PDF of the receipt. You have to keep the receipts as proof of business expenditure and to reclaim any allowable VAT and AutoEntry will make this record-keeping very easy.

Also, use your business debit card (don’t leave home without it) to pay for everything and then the transactions appear on your bank statement. So even if you don’t get a receipt or can’t get one (TFL) you still don’t miss the expense because it appears in your bank account.

Visit our bookkeeping for your business page to learn more about how we can work on reducing your data entry time.

Creating  sales invoices on the move

Yes, you can create sales invoices on the move. But you don’t want to get them wrong because that will delay payment and may damage your reputation with your client.

And think of the client – do they want or need your invoice right here, right now?

Not always.

Has everything been accounted for correctly?

Two aspects to this – “everything” and “correctly”.

Miss something and your profit is wrong, whatever your phone tells you.

Our experience is that users of cloud accounting apps and cloud accounting software, such as Xero and QuickBooks, need some help and training to get things right.

Cloud accounting software continues to be marketed as being everything you need, easy to use, do it yourself etc.

Well so is a Delia Smith cookery book – and you really don’t want to see my attempt at a soufflé!

Every transaction has to have been accounted for correctly (including transactions such as depreciation and corporation tax) for the profit to be correct.

Otherwise, it’s wrong.

So our client’s profit was not what his smart phone told him it was. It turned out the profit was a little higher, but it isn’t always like that.

Embrace cloud accounting software and cloud accounting apps but just take the time to really understand how to use them in the best way so you don’t mistakenly end up thinking you’re richer than you are.

Until then, don’t believe everything your phone tells you.

You’re reading this on your phone, right?

Michael – @bluedotmichael

Related links:

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Part Time CFO – if this is the solution, what’s the problem?

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Chartered Accountants – Bedford House, Fulham Green, London, SW6 3JW