Cloud accounting & technology Archives

Why don’t businesses make better use of accounting software?

You won’t be a spreadsheet-free zone but use spreadsheets to give additional insight rather than to do the work that your accounting software can do better.

Why don’t businesses make better use of their accounting software?

I recently visited three different companies, all different sizes, doing very different things and they each had cloud accounting software. One Xero and two QuickBooks.

They all had one thing in common – they aren’t allowing themselves to get what their businesses need from their chosen software.

Here are some of the stumbling blocks.

Be committed to your accounting software

Your accounting software must be your go-to place for financial information – so kick out all those spreadsheets that people are relying on to manage sales invoices, who you owe money to and whatever else.

Create useful reports in your software that produce the necessary financial information and make sure everyone who needs access has access.

Create your management accounts in your accounting software and every twelfth set will become your year-end accounts.

You won’t be a spreadsheet-free zone but use spreadsheets to give additional insight rather than to do the work that your accounting software can do better.

➡️ Your accounting software needs to be the font of all knowledge.

What numbers would be useful?

One way to make better use of accounting software is to be aware of and use the various tools that help you produce more useful numbers and shed new light on business performance.

Let’s look at Profit Centres

If you have several different business streams / divisions then introduce profit centres to your bookkeeping so you can see profit or loss by business stream.

Use “classes” in QB and “tracking categories” in Xero to establish profit centres.

Ensure you include the relevant profit centre in the bookkeeping transaction for each sale and expense.

Hey presto! You can measure profit and loss by business stream / division / profit centre.

Profit centres are just one example – more tools such as projects and locations are available.

Bookkeeping is a continuous stream of activity

Financial transactions happen every day – so, to remain up-to-date, bookkeeping should be continuous.

In a larger business daily bookkeeping is imperative.

In a smaller business you can get away with bookkeeping happening less often – but ditch the idea of giving everything to your bookkeeper / accountant once a month.

➡️ Be regular – but not like Halley’s comet

Invest in training

Make sure everyone knows how to use your chosen software properly. This isn’t just to do with data entry, it’s also:

making sure that functionality such as profit-centres is being used
setting up a chart of accounts that will drive accurate, granular reports
using available data-entry fields with a view to reporting on them
using tools such repeating / recurring transactions so the computers do more of the routine work
using apps, such as Dext or AutoEntry to make bookkeeping more efficient
ensuring there is strong accounting knowledge in your team so that accruals, prepayments and tax provisions can be accounted for

➡️ Make sure everyone knows what they’re doing and how best to do it

Make better use of your accounting software

The businesses I visited had one other thing in common – they all wanted to start making the most out of their software.

Good for them.

How about you?

We provide in-house training for FreeAgent, Xero and QB users and we do a lot of work with businesses of all shapes and sizes to help get their financial processes and reporting running like a well-oiled machine.

Call Michael Austin on 020 7125 0270 or email info@bluedotconsulting.co.uk and let’s have a free-of-charge chat about your business.

Michael

In-house accounting for a growing business – often the right answer but how do you get there?

Complete your team with our Fractional CFO service in London

Blue Dot Consulting provides accounting and business advisory services to clients across Central London, West London and South West London, with particular focus on Fulham, Hammersmith, Richmond, Putney, Wandsworth, Kensington and Chelsea. We help local business owners make better financial decisions and plan confidently for the future.

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

Cloud accounting software is often sold 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!

“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.

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 are 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.

Can Blue Dot Consulting help your businesses with its accounting?

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.

We run practical Xero and QuickBooks training sessions help many businesses get just what they need out of their cloud accounting software. We use your live transactions to show you / your team how to use your chosen software more efficiently and how to get useful financial reports from it to help improve business performance.

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

Related links:

Management information

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

Outsource your financial management

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

Cloud accounting and AI may not a good accountant make

Make sure your accountant knows what they’re doing because the best golfers don’t have to use the latest clubs, but they do need to know how to play golf

My golf clubs are more than twenty years old.

I love playing golf but I’m not very good at it. If I go for lessons and play more frequently then I get better.

Training and experience help but simply buying a new set of golf clubs, embracing twenty-first century technology, would make next to no difference.

Cloud accounting and AI

Back at the day job and the hype just keeps increasing.

Cloud accounting, SaaS, this app, that platform and now AI.

Judge a business and its accountant by the size of their tech-stack!

If you’re not digital you’re not doing it right!

No Luddite, me, I get the benefits of adopting some of the new technology, we’ve been paper-free and operating 100% in the cloud since 2014, but I also see “tech”, “the cloud” and “AI” as cloaks to hide behind.

Accountants may say “we’re great accountants because we use this tech and that tech.”

Software providers may say “the accountants that use our tech are the enlightened great and the good and who wouldn’t want an accountant like that?”

Reality check – just because they use new technology doesn’t mean the accountant is any good or that the latest app is good value for money

We’ve seen too many examples of accountants making a virtue of being in the cloud but not actually delivering a useful service to their clients.

So if you’re running a business and you’re wondering if and how this hype in the accounting world can make a difference to your bottom line, peace of mind, efficient workflow and prospects of growth, the answer is almost certainly YES.

But make sure the accountant knows what they’re doing because the best golfers don’t have to use the latest clubs, but they do need to know how to play golf.

Michael

This is bookkeeping in the 21st century

Technology is the servant not the master

^{_{© Blue Dot Consulting Limited}}

Cloud accounting for business – Are you getting in your accountant’s way?

Cloud accounting requires cloud workflows – the old ways will hold you back!

Every accountant under the sun is banging on about cloud accounting for business users. Often for very good reason.

We’re no different.

We encourage all businesses to use accounting software and, these days it’s cloud accounting software.

Why?

Primarily because cloud accounting:

makes data entry much more efficient
is accessible to the accountant and to members of your business
can be done anywhere, anytime – tailor-made for WFH

Usually a business will raise its own sales invoices, ideally within their accounting software so that raising an invoice is also accounting for the invoice and starting it on its route to get paid. Sometimes a business will have their own CRM system for invoicing.

But it’s all the other accounting – for suppliers’ invoices, expenses, bank receipts and payments, credit card transactions etc. – where cloud accounting should make a big difference to bookkeeping and producing up to date, accurate, complete financial information.

The information you need to run your business profitably and maintain good cashflow.

Don’t be the block in the road

And this is where many SME business owners can get in the way.

Cloud accounting is a continuous activity. Sales, purchases, bank receipts and payments happen every day. So make sure your bookkeeper has access to the transactions as they happen.

Raise your sales invoices as soon as you can and pass them to your bookkeeper if they are raised outside your accounting software
Keep your bank accounts connected to the software (they will disconnect every 90 days for security reasons)
Forward all incoming suppliers’ invoices to your bookkeeper when you get them
Consider using a document processing app (AutoEntry or Dext)
Send all of your bank statements to your bookkeeper early in a new month so they can be agreed to your accounts (the bank reconciliation is a key financial control and should be carried out frequently – don’t let anyone tell you otherwise!)
Respond to queries from your bookkeeper promptly
Only do parts of the work yourself if you have had appropriate training and can do it right

Accounting software is only as useful as the information it generates so make sure you understand, review and take action on financial reports.

Cloud accounting really is teamwork – between your business, your bookkeeper / accountant and perhaps one or two apps.

If you work together it all works well and you can concentrate on making money.

And make sure your accountant knows what they’re doing as well.

Cloud accounting does not a good accountant make!

Michael

This is bookkeeping in the 21st century

To increase profitability – We’re going to purposefully do less!

^{_{Blue Dot Consulting Limited}}

Are the accounting software companies building the equivalent of 3D television?

Despite all the marketing hype and investment by the media companies and the TV manufacturers, 3D TV has never caught on.

Are the accounting software companies creating their own equivalent of 3D TV?

If they are, do we need it and do we want it?

Over the years there have been several attempts to get 3D into cinemas and living rooms but, by and large, there’s been no great appetite for it.

No one needed it and few people wanted it.

Despite all the marketing hype and investment by the media companies and the TV manufacturers, 3D TV has never caught on.

Is there a similar story brewing these days with AI and accounting software?

AI in accounting software – it’s coming whether you like it or not!

The hype is there and will only get louder. The investment is there and has been for a while and some of the AI has already made its way into some of the software.

Big launches and announcements are planned.

And as we wait for the product launches, if you’re an accountant or bookkeeper, in a firm, working for yourself or in a finance department, start to ask yourself:

will accounting software infused with AI be substantially more useful?
will AI-infused accounting software help make my clients / my employer more profitable?
will I be able to switch it off if I think it gets in the way?
will my business and /or my clients be prepared to pay more for the software?
if I can’t see appreciable benefits can I buy a version of the product without the AI?

We’ve yet to see what the next wave of AI in accounting software will look like, so it’s too soon to reach any conclusions.

It might be something that most of us can’t live without and we’re prepared to pay more for it.

But it may be the equivalent of 3D TV.

If so, then be prepared to push back.

Can Blue Dot Consulting help your business with its bookkeeping?

Bookkeeping is the DNA of every business and, however much technology you use, your bookkeeping needs to be done well and kept up to date.

We do a lot of training with businesses to help them get going in the right way or transition away from how they’ve always done things to how they should be doing things.

We help businesses get what they need from their numbers and we can help you with:

Our training uses your accounting software and your live data so it really is bespoke for your business.

We work with start-ups and we also work with long-established businesses.

We take you through the whole spectrum from data entry at one end to financial reports at the other end, pausing to look at workflows and financial controls along the way.

Perhaps most importantly of all – we show you how to use the software in a way that’s right for your business, not in a way that the accounting software companies would have you believe is right for your business.

Let’s have a free-of-charge chat about your business – call Michael Austin on 020 7125 0270 or email info@bluedotconsulting.co.uk

Michael

Related links:

Bookkeeping in the 21st century

Technology is the servant, not the master

Accounting software training

© Blue Dot Consulting Limited, Chartered Accountants, Bedford House, Fulham Green, London, SW6 3JW

Paper-free accounting

Actually, the inertia that holds most people back from paper-free accounting is a reluctance to lose the paper.

This blog first appeared in 2017 and this is the 2025 uppdate.

Since 2017 there have been huge leaps and bounds in technology but in many ways the state of play in 2017 is very much what it it now.

AI may change that but to date I haven’t seen much in the AI space that offers a significant improvement to a meaningful problem.

Actually, the inertia that holds most people back from paper-free accounting is a reluctance to lose the paper.

Apps for paper-free accounting

Suppliers’ invoices and receipts

Apps such as AutoEntry and Dext manage and store images of invoices and receipts and will push the documents, along with the correct accounting entries, directly into your cloud accounting software.

You forward emails containing the PDF of your suppliers’ invoices to these apps. Equally you can download a version of the app on your phone and capture an image from there.

Sales invoices and e-commerce

If you use a CRM system to raise your invoices then there are several apps that will import the sales invoice data straight into to your accounts system. You can also create your own program to do it for you.

If you sell online then take a look at A2X, a highly-recommended app that takes accounting data from your e-commerce site and does the accounting for you.

On both the sales side and the purchases side, nothing is printed out and nothing needs to be physically filed. Workflows change, and they change for the better!

However, it’s vitally important that the business has a full and reliable back up of these documents in case the primary source is somehow lost or damaged.

Also worth visiting is HMRC’s guide on record keeping – even they say “HMRC recommend you keep all the original documents you receive. This does not mean you need to keep them on paper.”

Accounting software and paper-free accounting

Since 2017, bookkeeping software has migrated from the desktop to the cloud.

Advantages include:

You and your accountant can both work on and access your data and financial reports any time and anywhere
You can be in a PC or a Mac environment on a phone or on a tablet and still use the software
The client is best placed to raise sales invoices and raising them in the online accounting system does the accounting at the same time, improving credit control and saving time and money
Apps continue to be developed that link to accounting software – not all of them are as helpful as their marketing suggests

The disadvantages:

Prices keep rising! This is one of the biggest changes since the 2017 blog. We’ve all painted ourselves into a corner with this and I’m afraid there’s not much we can do about it.
With only one or two exceptions, the cloud accounting software services do NOT allow you to keep your own back-up that can be restored if needed. You can subscribe to third-party apps at a cost
Additional functionality keeps being added, into the product and into the price, but is it all useful to your business?

How can Blue Dot Consulting help you become paper-free?

Firstly, you’ve got to want to do it and, in fairness, we still see businesses owners who will not give up the lever-arch files.

But even if you’re not ready to give up the paper, you can still use the programs and apps I’m discussing here and we can help you to do that.

Indeed, if you’re self employed or a private landlord, then HMRC will soon mandate that you do your bookkeeping digitally if you fall into the size limits for their Making Tax Digital (MTD) regime.

Give me a call on 020 7125 0270 or email me at info@bluedotconsulting.co.uk and let’s have a chat about being paper-free.

Michael

Technology is the servant not the master

If you’re a CEO and you want to upgrade your finance function to match the needs of your business, the thought process to follow is refreshingly simple and as old as the hills

Technology is the servant not the master – despite what the accounting software and AI developer community would have you believe.

However, if you’re a CEO and you want to upgrade your finance function to match the needs of your business, the thought process to follow is refreshingly simple and as old as the hills:

Figure out what you’re trying to achieve
Find ways of making it happen

Figure out what you’re trying to achieve

The questions to ask will include:

what information does your business need? (P&L, cashflow, margins, receivables etc.)
who needs it?
how often?
what outcomes and improvements do you expect will come from the information?

Find ways of making it happen

We do a lot of work with business on Finance Transformation which we think about as aligning your finance function with the current and future needs of your business.

Whatever the current size and composition of your finance team there are typically three areas to look at:

people
technology
workflows

Technology is a key part of the mix but it’s only part of the mix.

Technology is the servant not the master – but it can serve you well

Most businesses already have a lot of technology floating around so the first question to ask is:

Are you using the tech you have as effectively as it can be used?

Cloud accounting software is very powerful but I’m often astonished that businesses simply don’t use their chosen software to its full potential – Why don’t businesses make better use of accounting software?

How efficient are your processes and workflows?

Technology can certainly do a lot of the heavy lifting for you which will save a lot of time and money.

There are some excellent apps that handle document management and accounting (such as Dext and AutoEntry) and it’s usually possible to link e-commerce and payment sites to your cloud software.

Find the right mix of technology and people that ensures all of the data that needs to be processed is processed accurately and on time.

Additional insight

Sometimes you can’t get all of the financial information you need from your finance system – there may be reports and analyses you’d like to see which require data sets to be compared, merged or re-organised to give you the insight you need.

At a simple level, a spreadsheet will often be more than adequate for creating a cashflow model and pivot tables and Microsoft’s Power Query are worth investigating for combining and analysing data.

The bottom line

Do you want a clearer view of the financial information your business needs and how to generate it?

Call Michael Austin on 020 7125 0270 or email info@bluedotconsulting.co.uk and let’s have a free-of-charge chat about your business.

Michael

Accounting apps – less is more

Finance transformation

Our work with clients across Central, West and South-West London gives us a close-up view of how businesses in areas like Fulham, Hammersmith, Richmond, Putney, Wandsworth, Kensington and Chelsea are adapting and growing. If you’d like to explore how these insights could apply to your business, we’d love to hear from you.

Are you getting in your accountant’s way?

Cloud accounting requires cloud workflows – the old ways will hold you back!

Every accountant under the sun is banging on about cloud accounting. Often for very good reason.

We’re no different.

We encourage all businesses to use accounting software and, these days it’s cloud accounting software.

Why?

Primarily because cloud accounting:

makes data entry much more efficient
is accessible to the accountant and to members of your business
can be done anywhere, anytime – tailor-made for WFH

The information you need to run your business profitably and maintain good cashflow.

Don’t be the block in the road

And this is where many SME business owners can get in the way.

Cloud accounting is a continuous activity. Sales, purchases, bank receipts and payments happen every day. So make sure your bookkeeper has access to the transactions as they happen.

Raise your sales invoices as soon as you can and pass them to your bookkeeper if they are raised outside your accounting software
Keep your bank accounts connected to the software (they will disconnect every 90 days for security reasons)
Forward all incoming suppliers’ invoices to your bookkeeper when you get them
Consider using a document processing app (AutoEntry or Dext)
Send all of your bank statements to your bookkeeper early in a new month so they can be agreed to your accounts (the bank reconciliation is a key financial control and should be carried out frequently – don’t let anyone tell you otherwise!)
Respond to queries from your bookkeeper promptly
Only do parts of the work yourself if you have had appropriate training and can do it right

Accounting software is only as useful as the information it generates so make sure you understand, review and take action on financial reports.

Cloud accounting really is teamwork – between your business, your bookkeeper / accountant and perhaps one or two apps.

If you work together it all works well and you can concentrate on making money.

And make sure your accountant knows what they’re doing as well.

Cloud accounting does not a good accountant make!

Michael

To increase profitability – We’re going to purposefully do less!

Bookkeeping for your business

Outsourced accounting – the way of the world

Outsourced accounting has been with us for many years, at all levels from the freelance bookkeeper to the interim Finance Director. No change there, but technology is making outsourced accounting much easier to buy and to deliver.

Outsourced accounting has been with us for many years, at all levels from the freelance bookkeeper to the interim Finance Director.

No change there, but technology is making outsourced accounting much easier to buy and to deliver.

All of which has to be good for businesses of all shapes and sizes

There are two big drivers for this change.

Apps put the buyer and the supplier in touch and make the process familiar to all

Everyone is taking advantage of apps to buy services on demand. Taxis, cleaners, dog walkers, gift-buying and wrapping, take-away meals – the arrival of apps is simply making the purchase of these services easier and more prevalent.

It’s not just buying the service that is made easier, what makes the delivery of these services much better is that technology also connects the suppliers to the buyers in a more useful and visible way.

The bottom line is that individual service providers and freelancers can connect through apps and websites with individual buyers much more readily, with lower transaction costs, and vibrant, growing markets for services are created.

Cloud software means outsourced accounting can be done anywhere, anytime

It is not just cloud accounting software that can be anywhere, it is the transactions as well.

A typical client of ours will upload transactions such as receipts, invoices and bank statements into services such as Dext or AutoEntry and our guys will access these transactions and do the bookkeeping wherever they may be – at home, in our office, at the client’s premises. They can do it at any time of day as well.

Flexible working is just one more benefit.

Outsourced accounting – easier to buy, easier to deliver

Technology is making it easier to buy services when and where they are required, making people more familiar with the process and more trusting of the services they buy.

Technology is also making delivery of outsourced accounting services more flexible, paperless and client-centric. It’s increases value for money as well by lowering costs and increasing competition.

Are you taking advantage of outsourced accounting?

If you would like to find out more, please give me a call – 020 7125 0270 or email me at info@bluedotconsulting.co.uk

Michael – @bluedotmichael

Proof of Profit

How good are your management accounts?

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From paper bag to paper-free – switch to paperless accounting

Go from paper bag to paper-free and save time, space, money and stress.

It’s the old accounting nightmare – the client brings in their records in a carrier bag or shoe box, dumps it on the desk and says “Here you go – can you get my accounts / tax return done by the end of the month, please?”

We don’t see it happen very often but it happened recently with a new client.

One carrier bag containing a lever-arch file of purchase invoices and a box file full of bank statements and cash receipts. The previous accountant is no longer in business but there are accounts from two years ago we can take as our starting point.

Paperless accounting – the tools you need

The two pillars of paperless accounting are a document management app, such as AutoEntry or Dext, and cloud accounting software such as Xero or QuickBooks.

Document management apps

These apps read the data in documents, such as invoices, bank statements and receipts, and convert them into a format that can be sent straight to your accounting software – along with the PDF of the document.

With one client, we had to scan the 35 pages of bank statements for the financial year and upload them as PDFs to AutoEntry.

The next day AutoEntry had crunched the bank statement data into one file which we downloaded as a QuickBooks compatible CSV file and 950 receipts and payments were ready to be imported into QuickBooks.

Cloud accounting software

Essential for paperless accounting is cloud accounting software.

Choose your software and connect it to your business bank accounts so that all your bank transactions automatically appear in the software to be accounted for.

Set rules so that when a particular customer or supplier name or reference appears on the bank statement the correct accounting entry is automatically made for that transaction
Even without rules, your accounting software will start to remember transactions and suggest the accounting entries for recurring customers and suppliers

There are other apps that you can connect to your accounting software, but be careful – they’re not all as helpful as they seem.

Paperless accounting workflows

Workflows change in the paper-free world.

Transactions land in your accounting software every day and should be accounted for as often as possible.

There is little point in doing the historical accounting without keeping the books up to date going forwards.

And there’s little point in keeping the accounting up to date without producing and sharing financial information and reports across the business – and acting on them!

This blog is mainly for people running their own business. New technology is sweeping across the accounting profession like never before and the question for you is whether your business is benefiting from the best and most appropriate tech available.

If so then you will have at your fingertips the financial information you need to grow your business and improve profitability and cashflow.

Can we help you go paperless? Give me a call on 020 7125 0270 or email me at info@bluedotconsulting.co.uk

Michael

Related links:

Bookkeeping for business

Xero training

QuickBooks training

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Category: Cloud accounting & technology

Are the accounting software companies building the equivalent of 3D television?

AI in accounting software – it’s coming whether you like it or not!

Can Blue Dot Consulting help your business with its bookkeeping?

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