We’ve teamed up with chartered accountant, fintech consultant and Pathfinder Nick Levine to give you the Accountant's view on how cost saving tools can be effectively used to beat inflation.
That’s because it’s our mission to help accountants work smarter, not harder, be it through our payments technology and partners, such as Sage, IRIS and BrightPay, or through our content. We produce blogs, guides, and tutorials, as well as the Pathfinders newsletter and private LinkedIn group, to make the lives of accountants easier.
The recent headlines about the economy don’t make for pretty reading. Inflation is currently 9%, a forty year high, and it’s expected that this could rise to 10%.
This is being caused by several factors, including rising energy bills and the war in the Ukraine. On a day to day level, the price of goods and services is becoming more expensive for individuals and businesses alike.
Accountants are unlikely to be able to put up their rates due to the price sensitivity of clients. Therefore, to cope with the cost of living crisis, they must cut their internal costs so that profit margins aren’t eroded. Additionally, this is necessary as the current environment is particularly challenging for firms to hire. It’s becoming harder and more expensive to hire new staff, so this makes a more compelling business case for investing in technology tools.
Push core accounting software to its fullest automation capabilities
Most accounting firms will already be using automation-powered cloud accounting software.
However, it’s a good idea for accountants to take stock of their usage to see whether they are using all available core features to reduce manual efforts from staff. This includes setting up rules to auto-match bank transactions from regular suppliers. For example, Uber and TFLs costs should be set up by default to be categorised to the travel category.
Additionally, greater efficiencies can be gained for recurring month-end tasks. Due to the time-pressured nature of the monthly close, it’s tempting to put off investing the time required to set these up.
Setting up automated journals for fixed asset registers and prepayments can be the biggest cost and time savings win. An effective way to set up these schedules is to task a few team members with doing this for clients during the middle of the month, after management accounts have been submitted and before payroll is run.
Run payroll and payments with tech tools
Many accounting firms still spend a considerable amount of internal cost and resource on running payroll and payments.
These services aren’t seen as value-adding due to their laborious and standardised nature. Additionally, it’s all too easy to make mistakes when these tasks are completed manually, whether due to paying a supplier the wrong value or sending an individual’s salary to the wrong bank account.
Making errors can erode profitability due to the additional time needed to unpick errors and reassure clients, and might, if sustained, ultimately lead to loss of business.
However, all of these issues can be solved by using an automated and connected tech solution to run payroll and payments.
Tools like the Modulr Payments Dashboard turn these assignments into a single connected workflow. Manual entry is reduced to a minimum with data seamlessly pulled across payroll software (through integrations with partners including BrightPay and IRIS), accounting software and payments systems.
With the Modulr Payments Dashboard, the ultimate responsibility of sending payments can default to the end client, who can be final approver. All they need to do is manually scan the payments after being prompted by email and click an approval button.
Payroll and payments processes are streamlined, saving internal resources and improving staff satisfaction levels. This will likely lead to an improved employee retention rate, avoiding the need for firms to increase salaries to attract new starters.
Explore the wider App marketplace to automate further
Payments is just one of many categories of products that integrates directly with cloud accounting software.
Costs and staff resources can be reduced further by seeking out other Apps and integrations to automate workflows not available as part of your main accounting software package.
All of the leading players have App marketplaces across a range of categories, including invoicing, inventory CRM and reporting.
Accountants may need to incorporate new solutions for clients as they grow. For example, clients may need to form new companies to benefit from tax planning and to internationalise. This will require consolidated accounts, with consistent treatment across all group companies (i.e. revenue recognition and FX gains/losses).
While template spreadsheets are adequate for consolidation purposes, using a specialist consolidation add-on, such as Spotlight Reporting, will take less effort and time.
Ensure tech integrations are set up correctly
In theory, the plug-and-play nature of cloud integrations means they should be easy to set up, but sometimes this can be harder in practice.
This can occur due to connections being broken, with users needing to re-consent, or technical glitches. When this occurs, there are usually workarounds to completing jobs, such as journal postings or uploading bank CSV files.
As they say, a stitch in time saves nine, so task a more senior or technology-savvy team member to fix these issues to stop precious internal resources from being unnecessarily wasted.
Maximising the use of cost-saving tech tools to beat inflation will help make accounting firms more sustainable and protect their margins. Additionally, doing so will also have wider benefits including the opportunity to build a scalable practice and enhance client relationships.