Cloud Accounting: The Way Forward In Covid Times - NM Group News

Cloud Accounting: The Way Forward In Covid Times

Change is inevitable. We need to embrace it.

If there’s one thing Covid has taught us, it’s that. And though all there is to say about Covid has been said, this particular lesson stands out more than anything.

So, what are we going to do about it? And, by we, I don’t just mean NM. 

Entrepreneurs, business people, employees, clients, accountants – how are we going to deal with this seemingly everlasting change?

The first step, while obvious, is perhaps the hardest. Acceptance.

Things are changing in the working world and we need to embrace that. How? Let’s start with remote working.

This has been a massive pain point with many local businesses. How can you track progress if you can’t keep an eye on your team? How will you maintain a positive relationship with your clients if you can’t chat over an espresso before a meeting?

Before we tackle those questions, let’s look back at the challenges we faced a few short years ago.

How did you cope with dial-up internet, or having to order a taxi by telephone? You painstakingly went through the motions, until a better solution came along.

Well, that solution is here, and it’s called cloud accounting.

Why is cloud accounting important?

You may be wondering how cloud accounting and remote working are related. Especially if you’re not an accountant. Well, every business needs accounting, and as we all start to move toward working remotely, having the ability to manage your finances remotely is crucial.

Remote working is not just about working away from the office – it’s about being able to work effectively in a team from anywhere. Thanks to software like Google Drive, Zoom, and Xero, remote work is more accessible than ever.

Every business owner worth their salt knows that there is power in numbers, and the more information you have about those numbers, the more you can achieve.

What happens when you don’t embrace change

The worst has already happened – a global pandemic has completely disrupted our lives, the economy and our work. So let’s take a look at our new normal.

Scenario A:

In spite of everything, John is still going into the office every day – an empty office nonetheless as employees are working from home. John is reviewing a now defunct business strategy and needs an analysis of the company’s profit and loss for the past six months.

John reaches out to his accounts clerk, hoping to get a reply within the hour. Except that the accounts clerk is currently in a 2 hour long queue waiting for a swab test after finding out that a child at his daughter’s school has been diagnosed with covid. John then reaches out to his accountant for some rough figures. His accountant has 4 clients requesting the same information – John will have to wait 3 days to get the information he needs.

John is officially stuck. Sucks to be John.

This next scenario will be much shorter. 

Scenario B:

Francesca is in her home studio running a stocktake. While orders are doing well, she’s aware that cash flow could be under threat in a flash and wants to ensure she spends wisely over the next few months. 

With a swipe and a quick tap, Francesca opens the Xero app on her device and reviews her upcoming orders, the profit and loss of the past year, and checks her pending invoices and billing to predict her cashflow for the next couple of weeks.

Having a clear idea of her financial standing, Francesca works out a calculation, shoots an email to her accountant to ensure it’s correct, and goes onto the next task on her to-do list.

Francesca may be at home, but her business is on the move.

Cloud accounting is perfect for small businesses

Effective financial planning and accounting underpins the growth and profitability of all small businesses. In fact, cloud accounting is based on the principle that small businesses are highly sensitive to shifts in their balance sheet and cash flow. Having the ability to monitor financial performance in real-time and plan ahead is crucial. 

So not only do your accounts become instantly accessible, but Xero also automates certain steps of the accounting process, eliminating human error while giving you a fantastic insight into your business.

This insight is invaluable, and it could be at your fingertips in no time.

NM Group is a Xero Champion partner. For more information drop us a line.