New technology and Artificial Intelligence (AI) is forever changing the workplace. Yet, you would have thought the accountancy profession was safe from such change. I always remember my Mum telling me, “you will have a job for life as everyone will always need a good accountant!” How things can change so quickly…
But it’s not all bad news, quite the opposite. Technology is revolutionising the accountancy profession, which is great if, like me, you are an accountant open to new challenges and who thrives on change. Equally, businesses who have such an accountant will at long last get the insights and advice on their business they need to look ahead and make effective decisions.
Cloud technology has transformed the way traditional bookkeeping is done. Gone are the days of spending hours inputting bank transactions and invoices into a desktop package. This can now all be achieved automatically using bank feeds and software such as Receipt Bank, where virtually no manual inputting of data is needed. With AI, software is remembering and learning your behavioural patterns, meaning it can now virtually do your work for you. This combined with HMRC’s Making Tax Digital (where by 2020 they want all businesses to report their financial information electronically on a quarterly basis), it will mean the traditional compliance work will reduce significantly.
So what exactly is the good news?
Well as accountants we have the experience of seeing hundreds of clients and being able to advise them on all aspects of their business. We can now use this knowledge and experience to advise clients on important matters, such as how to improve their cashflow, increase their margins, reduce overhead costs, increase sales and even look forward into the future. I’m sure clients would prefer these advisory services, rather than paying their accountant for bank reconciliations and bookkeeping work that does not really serve any benefit.
The use of cloud technology has enabled us to provide these business advisory services at a cost that the business owner now perceives as real value for money. They can see the direct impact on their bottom line and more cash in the bank.
So how do we do this?
Through our “Raffingers Infinity” process. This is where I sit down with a business owner for a free, no obligation meeting to discuss the pains, challenges, opportunities and, most importantly, motivation and goals of the business. This helps us create an overall picture of the business and allows us to create a Diagnostic Report, which we have called “Raffingers Discover”, an example of one such report is below:
Using the report, we can then see what changes, if any, need to be made to the business and maybe concentrate on some quick wins.
Looking into the past only gives you a snapshot of how the business is doing and what the future holds. Whereas, building forecasts such as these shows how profitable the business should be, and the subsequent cash position is vital for a business owner to know. Having this data also allows “what if” scenarios to be built showing, for example, the effect of taking on new staff, the effect of margins falling or customers taking longer to pay their bills. Going through the “Raffingers Future” model means we can compare actual trading figures against forecasts and build strategies to improve the business.
Following this process, we then recommend monthly meetings to measure other important aspects of the business. We tend to call these non-financial KPI’s (key performance indicators), but I don’t particularly like jargon so we simply call this “Raffingers Insights”, where we measure items, such as occupancy rates if you run a hotel, number of covers if you run a restaurant, fees per earner if you are a recruitment business and recover-ability rates if you run a creative agency. If you cannot measure it then you cannot improve on it!
So to wrap up…. I can say that being off work for the last four weeks in a leg cast has enabled me to re-think my role as an accountant. Consequently, I have become a certified business adviser, virtue of the certification programme run by Futrli, which has made me think in a completely different way when I’m speaking to clients and prospects. Only this week I have had one client discuss management accounts with me after his bank requested them. I have discussed our “Raffingers Infinity” process with him and will be meeting him shortly to discuss how we can help his business as it goes through a rapid growth period. I also had a call from a small branding agency who already uses Xero, but was not getting any advice from their existing accountant (except to try and explain to her the principals of accounting). I explained to her the “Raffingers Insights” programme and her comments were “this is exactly what I’m looking for so I can understand how my business is performing not just from a profit perspective but also how it affects the cash position”.
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