Seamless accounting – what is it, and how can it benefit my small business?
Managing your finances doesn't have to be hard work. With the right accounting software, you can keep a strong hold on where how your business is doing
We can all agree that 2020 has been a turbulent year for everyone, but even more so for small businesses. From the impact of Covid-19, and the subsequent restrictions of the pandemic, to the consequences of a finalised Brexit deal - it's been hard for most small to medium-sized enterprises (SME's) across the UK to catch a breath. Add this to the new reality of home-based working, and the importance of finding simpler and more cost-effective ways to operate your business is at an all-time high.
According to insights from business leaders across the country, one easy way an SME can scale up their growth and profitability (while saving time and staying up-to-date) is by adopting seamless accounting. Otherwise known as integrated accounting, seamless accounting simplifies a business's financial operations by integrating major accounting functions into one self-balancing operation. It helps to modernise the way that SMEs manage their money, because it transmits a constant flow of data across all financial channels, while unifying various accounting features under one system.
Emerging and fast-growing businesses don't have time to go through the trials and tribulations of offline accounting. With the market growing increasingly competitive, if SMEs don't search for ways to improve their operational efficiency, they stand the risk of being left behind.
Still not convinced? Not to worry. Follow us while we guide you through everything there is to know about seamless accounting, including its core features, it's top benefits and who it's best providers are on the market. But before we get ahead of ourselves, let's take a closer look at what exactly comprises a seamless, integrated accounting system.
WHAT IS SEAMLESS ACCOUNTING?
A seamless or integrated accounting system is a type of software that merges various financial accounting functions into one, simple application. This unified system replaces the need for multiple discrete programmes that achieve their own separate purposes. It also makes separate books or records for costing, ordering, and other management and accounting purposes redundant, because it integrates these functions into one central online system.
Seamless accounting software can record transactions and disseminate financial information across areas of the business, helping to standardise accounting procedures. It also interconnects the reporting activities from offices, stock, and point terminals, and sales facilities into one easy-to-use system, centralising the information and keeping all the important data in one place. Integrated accounting systems can give business leaders greater control over their operations by giving them up-to-date knowledge on the cost of products or operations, as well as details regarding the profit or losses of the entire organisation.
As if this wasn't enough, these integrated accounting systems can also calculate and monitor a business's job costs, track and convert an employee's time into payrolls, and handle processes such as inventory purchases, assembly, and sales. Instead of fussing with unnecessary paperwork, businesses can now utilise seamless accounting software that automatically sends out information like invoices and statements to vendors or customers through digital channels.
WHAT ARE ITS FEATURES?
Most types of seamless accounting software offer both core and non-core feature modules. The core feature modules are the services that the software includes by default, while the non-core feature modules include optional add-ons that you can purchase in addition to the basic package. It should also be noted that both the core and non-core features are designed to be perfectly compatible, and are able to be seamlessly interconnected with one another.
Core feature modules
These are the core modules that are featured in just about every type of seamless accounting software:
- General ledgers
- Purchase orders
- Stock inventory
- Bank reconciliation
- Accounts receivable
- Accounts payable ledgers
- General ledgers
Non-core feature modules
These are some of the non-core modules that you are able to add on to fit the needs of your business.
- Debt collection
- Time-sheet management
- Support for multi-currency or value-added taxation
- Electronic payment processing
- Payroll management
- Departmental accounting
- Enterprise resource planning
- Customer relationship management
WHAT ARE THE KEY ASPECTS TO LOOK OUT FOR?
For businesses new to the concept of seamless accounting, it might be difficult to pinpoint what software characteristics to look out for. Not to mention, with all the different types of integrated accounting software available, it can be hard to separate the wheat from the chaff when it comes to finding a service that will work well with your business. So, to help you find a seamless accounting programme that works best for you and your SME, we're going to give you a run-through on what characteristics you should prioritise when looking for software.
Automated workflow system
An automated workflow system helps you to automate the review, approval, and processing of your bookkeeping and accounts. To enable this, you need to manually enter data into the accounting software from physical copies or files. This system helps to keep your accounting smooth and frictionless because it erases the need to continually enter information manually or handle keys. It is also beneficial because it saves time by reducing delays, or even preventing them from occurring.
Decreased data entry
Another core characteristic to look out for is how well the software is able to decrease the need for your business to manually enter data. This may sound like an obvious one, but entering information manually is a process that takes a lot of time- time that can often be spent doing something more valuable. For this reason, when looking out for seamless accounting software, it's important to find a system that can simplify this process, until you have the most streamlined procedure possible.
Obviously, before the system gets off the ground, you will be required to transfer all necessary data from hard copies into digital files. But if you are looking to minimise this step as much as possible, there may be bookkeeping services that are able to do this for you.
Improved data processing
Once your business's accounting data is safely and successfully uploaded onto the software, the system is able to converge this information with different programs across the business. This is the main benefit of seamless accounting. It enables the smooth flow of information across different sectors of your SME, helping your business stay unified and up-to-date with its finances. Since this is such an important feature, it makes sense to spend a little more time looking into any software data processing power before implementing it into your company.
KEY BENEFITS OF A SEAMLESS ACCOUNTING SYSTEM
So, now you're more clued up on what characteristics to look out for, here are the various ways that seamless accounting software can benefit your small business.
It provides real-time information
One disadvantage of conventional accounting is that it always requires someone to manually transfer information from the ordering system into the accounting system. Aside from this being a bureaucratic headache for staff, it also means that companies using this method will never have up-to-date financial information instantly to hand.
In contrast, seamless accounting systems help you store all of your business's financial data on one system, allowing information to flow seamlessly across modules. This helps people throughout different sectors of the business to have a clear picture of the company's up-to-date finances as soon as orders are processed and payment methods are authorised.
In addition to improving the efficiency of the business's operations and helping management to have a better grasp on the state of their companies current finances, seamless accounting can also make the business look more professional to clients and customers.
It gives you a full look at your businesses performance
Leading on from the last point, since seamless accounting software provides you with up-to-date and relevant information, it also gives you full visibility into your business's performance. Integrated digital systems make purchase history super easy to pull up, so you're able to quickly look in-depth at what business strategies are working, and which areas need a bit more work. In addition to helping you keep tabs on your business's incomings and outgoings, seamless accounting software can also help you to make sure your company is fully compliant with the most up-to-date laws and regulations. This can keep your business out of hot water, so you have more time to focus on the important stuff.
Otherwise described as repeatedly entering data into a system, re-keying is a big feature of offline accounting. Despite its prevalence throughout the world of accounting, it can be incredibly time-consuming and cost businesses a lot of money in labour expenses. Seamless accounting helps to tackle this problem by eliminating the need for staff to re-key, giving staff more time to work on the affairs that matter. By getting rid of re-keying, integrated accounting practices also can optimise a company's work efficiency, by getting rid of the need to copy physical paperwork. This also can save a company a whole lot of time, as invoices can be sent out super quickly, email confirmations are automatically sent out when orders are processed. It also removes the need to phone up the head office to check on physical stock levels.
Increases data entry reliability
As we've covered, manually entering data into an accounting system can be a time-consuming and cumbersome process. But, in addition to this, entering data in this way also makes the process susceptible to human error, which increases the likelihood of faulty information being recorded into the database of a company. Seamless accountancy practices eliminate any chance of a human error occurring. It automates all forms of data entry, thus helping businesses avoid obstacles such as missed entries or multiple loggings.
It sets your business up for growth and scalability
With 2020 posing so many problems for small businesses across the UK and beyond, those who have been lucky enough to survive should be looking at ways to optimise their business, to provide stable foundations for future growth. This is made possible far more easily by using seamless accounting to connect all the finance platforms in your business.
Integrated accounting keeps all of your critical information in one place, and constantly updates it with the relevant data - which helps you to unlock smarter insights about how to more efficiently operate your SME. With all of this useful information at hand, you and your team will be more clued-up about the state of the business's finances, enabling you to make more informed decisions about the future.
It increases collaboration across departments
With around a quarter of the UK's population still working from home, it's essential that business leaders do everything they can to keep their workforce interconnected and collaborative. In addition to video call conferences and messaging apps, a unified digital strategy for your business will help you to establish a united and cohesive workforce.
Suppose every different sector of your SME is operating at their own frequency and is relying on the creation and circulation of physical paperwork. In that case, it could be easy for key information to get caught in the crosshairs, and for disharmony to be created amongst the team. Therefore, when financial platforms are automatically synchronised, and staff can easily access the shared platform and vital information, it helps everyone in the team to take full control over their financial data. More importantly, since the different sectors of the business are all using the same software, it levels the playing field and improves collaboration across departments, as everyone has the same access to the same accounting information.
DOES SEAMLESS ACCOUNTING HAVE ANY DRAWBACKS?
As we've just outlined, integrated accounting systems come with a lot of benefits. From saving the company time, to giving you greater control of your business's finances, it's pretty clear that the incentives for switching to this system are wide in scope and high in potential. However, to help you become better informed before you toss out the ring binders and physical files for good, here are a few things to look out for before your small business makes the transition into seamless accounting.
Potential breaches in security
While most seamless accounting software out there is kitted out with 128-bit encryption, it's almost impossible to completely ensure the security of your company's data. If it's been uploaded onto an online system, like an integrated accounting platform, then it will be hosted on someone else's server, which is vulnerable to crashing or being accessed by outside threats. Despite this, there are several steps your company can take to ensure the security of their accounting platforms, such as backing up your files and keeping them on a guarded offline system, or even investing in extra security software in order to bolster the protection of your business's data.
Relies on a strong internet connection
Due to the online nature of integrated accounting, it often relies on a robust and comprehensive internet connection. This means that if anyone wants to access the system, reliable WiFi is necessary either at home or in the office. Although this shouldn't be a problem for most SMEs who already rely on online infrastructure to conduct their daily practices, if a business is remote, or has issues with lack of signal, this is definitely something to bear in mind.
The hassle of implementation
In comparison to seamless accounting software, manual accounts are typically easier to set up, and slightly more flexible than integrated accounting. For this reason, when your business first makes the switch to seamless accounting, you will probably need some initial help to guide you through the process. Luckily, though, after the hard work of implementation is out the way, this new integrated system is much easier to navigate than more antiquated offline models.
The cost of implementation
Integrating your business's finance platforms will cost a little more than continuing with a paper-based accounting system. However, after the implementation phase is over, it doesn't require any follow-up costs (unless you want to add some non-core modules). Compared to a business's typical expenditures, a seamless accounting package isn't too much of an investment. Also, due to the time it can save staff keying in data manually, the software is likely to cover its own initial costs in a short amount of time anyway.
HOW CAN MY BUSINESS IMPLEMENT SEAMLESS ACCOUNTING?
So, now we've covered the main bases and explored the benefits and potential drawbacks of seamless accounting systems, you might be wondering how your business can go about setting it up?
The first thing to point out is that there are a lot of different options to choose from. The seamless accounting market is fairly competitive, which means lots of different types of software are available at a range of different price points. This, in turn, means that there will be options out there for businesses of any size, from smaller limited businesses, to medium and large ones. The abundance of choice is also great, if you're a specialist business who works within a specific industry or regulatory environment because it's easier to find integrated accounting systems that can be catered to your needs.
In most cases, systems are purchased and integrated together - but sometimes, the software can be bought separately and integrated into the business at a later date. Additionally, sometimes larger firms may develop customised systems internally, so they can work in accordance with in-house customer service and support. However, these models normally come at much higher price points than other, more universal options, so are not always accessible to smaller businesses.
The three main things to bear in mind when scanning the market for seamless accounting options are to do your research beforehand, to have clear requirements in mind, and to be as savvy as possible. Before starting your search, look into the state of your current accounting system, so you can see what software may can be compatible with. Ask yourself questions like, 'which reports does the system need to generate?', 'does the software need to require project management features?', 'what are my business's long term financial goals?' and 'how many users will need to access the system?' so you've got a clear idea in your mind before you explore different types of software or make any definite purchases.
Once you're clued-up and have a clear list of requirements in hand, it's time to search the market for options. We recommend searching for accounting software with a free trial period. Not only does this save the business a bit of pocket money, but it also gives the team a chance to adjust to a new system before any final decisions need to be made. This ensures that everyone in the business can express their concerns regarding software compatibility, usability, and functionality before the new system is officially implemented.
So, with the wealth of seamless accounting providers that are out there, you're probably not alone if you're feeling a bit overwhelmed from the number of choices you have. Luckily, we're here to make things simple. So here's our rundown of three integrated accounting providers that are currently at the top of the field.
WHO ARE THE BEST PROVIDERS?
Boasting over 1.8 million subscribers globally, Xero is a popular cloud-based online accounting software located in New Zealand. Xero is one of the frontrunners in seamless accounting across the UK, and it's versatility combined with relatively low start-up costs help it to be a great choice for small businesses.
Xero is built from a double-entry accounting framework, and its cloud-based software means that it can be easily accessed from a variety of devices (as long as there is a decent internet connection). It enables employees to view their business's cash flow, account details and transactions, and (for extra security) Xero automatically imports and codes all bank transactions. Xero is a great option for businesses on the move because it allows you to manage personal expenses and the approval process of the receipts. The system also features user support and the use of over 600 systems via its 'add-on marketplace,' granting you access to software like Receipt Bank, Vend, and Curve.
To access Xero's software, businesses are required to pay a subscription for the most basic version, and services like importing data are completely free. However, if you want to integrate more features, such as expanded time tracking and inventory tracking, then you are able to purchase add-ons for an additional cost.
QuickBooks is another titan of the seamless accounting industry. Based in Mountain View, California, Intuit QuickBooks features an easy-to-use dashboard that displays your company's key financial data when you log into the system. This includes information such as profit and loss, expenses, and open, overdue, and paid types of income.
Similar to Xero, QuickBooks features double-entry accounting, while also offering customisable invoices, support with managing payroll, strong account charts, and 400 other integrations to choose from.
A massive benefit of using QuickBooks is that its software gets updated on a regular basis. This gives businesses access to innovative features as soon as they come out, helping their accounting systems to stay contemporary and ahead of the curve.
Furthermore, QuickBooks also provides businesses with lots of other features that are unique to the software, including scheduled invoices, location and class categories, split transactions, and automatic sales receipts. However, even though QuickBooks software is unique and offers many features, some customers have flagged that the system can be convoluted and hard-to-navigate over longer time periods.
Founded and based in Sweden, Bokio provides a more affordable alternative to other, more costly, accounting systems that are on the market. It's predominantly targeted at small businesses, sole traders, and freelancers, and it provides a variety of useful services such as unlimited invoicing and step-by-step bookkeeping. It also automatically calculates VAT to make it easier to submit to HMRC, and the software is secure and cloud-based, so it can easily be used on-the-go.
Bokio is a great option for smaller businesses and sole traders who are just starting out. However, due to its lack of features when compared to other notable accounting software, it may not be as much of a suitable choice for medium to large businesses.
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