cloud-accounting

Once upon a time, buried in quiet corner of a large office beneath a handful of travel books (A Short History of Quebec, a Lonely Planet guide to Paris and a Collins Gem Spanish phrasebook), a couple of well-thumbed History Today magazines and a few brightly-coloured beermats collected from a Naples bar, sat an unobtrusive white cardboard box.

The box was around 6” high and about 10” in length, but as the paraphernalia with which it was covered in hinted at, its contents rarely saw the light of day.

In fact, only once a year were the box’s inner secrets revealed and masses of paper, including paid invoices, receipts, delivery notes, train tickets and assorted expenses emptied and sorted into chronological order.

It was usually at this point that the box’s owner noticed how rapidly dates and amounts faded to become almost indecipherable when printed on till-roll or the tiny receipts issued by debit and credit card machines.

But determining whether a figure was a ‘9’ or a ‘4’ was only one small element of an annual assessment process the box’s owner deferred until the last possible moment. Flicking through expense vouchers had become an increasingly fraught exercise, stretching his ability to remember meetings and events that had taken place more than a year earlier to the maximum.

“Was that a personal expense or a business one”, he would ask himself, donning his glasses to examine the detail printed on a single receipt.

“Will this expensive lunch with a client be allowable as a business expense or should I take it on the chin, “ he mused as he held up a bill from a fancy restaurant which ran comfortably into three figures.

“Where was I travelling to when the Trainline debited my business bank account with £43.75,” he wondered as he searched his box for the distinctive orange tickets that would confirm his intended destination.

Little wonder that this epic voyage into the recent past, during which he tried to link his costs with meetings, took so much time – time he knew would be better spent developing his business.

Several days after ploughing through the various parking, train, restaurant and other expense vouchers, which the man regularly emptied from his pockets or wallet into his white cardboard box, stuffing them in, crumpled, keeping them ‘just in case’ they were allowable against his annual tax liability, he listed them on a long sheet of paper and took everything along to his accountant.

The accountant, a kindly, rotund chap, shook his head and tut-tutted when the man arrived at his office carrying his white cardboard box. “It’s time you learnt about the cloud,” said the accountant, admonishingly. The man looked longingly towards the sky, hopeful that the white box fairy, that friend of small businessmen and women everywhere, would suddenly appear. The avuncular accountant sighed. “Let me explain cloud-based accounting,” he said.

If this tale sounds familiar, the chances are you’re running some form of business and you’re almost certainly aware of the benefits that accrue to your enterprise from cloud-based accounting – one of which is a significantly more effective administration of expenses.

Yet according to a recent survey by Intuit called The Changing Role of Accountancy, some 40% of small business owners suspect that their accountants are a little too traditional to embrace cloud accounting, even though more than half (56%) of them would prefer their current firm to introduce processes capable of streamlining the ‘white cardboard box’ process described above rather than move to another accountancy practice.

David Johnson, managing director of Isle of Man-based Sterling Business Solutions (SBS), was one of the first to recognise the burgeoning demand from business owners who wanted to spend less time on routine administrative tasks and optimise the use of technology.

“I’m a long-standing business owner myself,” says Mr Johnson, “so I’m acutely aware of the need other entrepreneurs have for value-added, accounting-related services such as business consulting, strategic advice and financial planning. I believe business owners want more than just the completion of their annual accounts; they want the people preparing those accounts to be trusted business advisers too.”

By introducing their clients to simple accounting software such as Quickbooks, SBS have already streamlined the accounting and administrative tasks which are such a time-consuming chore for small businesses, effectively releasing owners to spend more time focusing on their clients.

They’ve achieved this by optimising the technology at their disposal, delivering cloud-based services which has enabled them to work more closely with small business owners.

The recent Intuit survey highlighted the benefits offered by cloud-based accounting, noting that it resulted in a “faster, more efficient way of working on routine accounting tasks, saving time and money.”

As cloud-based accounting also offers central and secure access to real-time information, Intuit said it provided “an effective platform for accountants, bookkeepers and clients to collaborate remotely – anywhere, anytime, on any device.”

“The Intuit survey’s findings came as no surprise to use,” says David Johnson, “there’s been a dramatic change in demand from business owners over the past few years. Owners now want their accountants to be financial advisers and to offer more than what might be called ‘traditional advice’. In fact, they need considerably more strategic advice on how to develop their businesses and rid themselves of time-consuming administrative chores.”

It appears that the traditional role of the white cardboard box is under serious threat, although few business owners will shed a tear as its imminent demise draws closer.

© 2021 Sterling is a Registered Business Name of Sterling Holdings Limited. Sterling Trust Limited is registered in the Isle of Man Number 72969C and is licensed by the Isle of Man Financial Services Authority.

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