The must-have accounting technologies for business owners

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08/04/2021.
One of the most radical changes to finance teams over the last decade has undoubtedly been the adoption of cloud accounting. The appeal of a cheaper, highly functional cloud-based system has had businesses transitioning in the masses from the traditional clunky desktop packages to cloud technology, which provides more meaningful outputs and reduces time-consuming inputs.

1. Xero

At the heart of all things cloud accounting is Xero, which has become a household name in the UK, primarily due to its functionality, popularity and the huge number of apps it integrates with. For most businesses, the cost of having an all in one ERP solution which handles sales, procurement and stock management is substantial and unaffordable. However, thanks to the configuration of Xero, you can pick and choose from hundreds of apps that meet your needs in a much more affordable solution.

2. Dext

An app which has along with Xero has revolutionised and driven large efficiencies in the finance team is Dext (previously known as Receipt Bank). Dext uses optical character recognition to read invoices, extract key information, and convert the invoice into data which is pushed into Xero, with an attached PDF copy of the invoice, all with no human intervention.

In a traditional finance team, there would be a bookkeeper who would collect invoices addressed to the business and manually input the invoice details into their desktop platform, then keep a copy of the invoices in storage in the event of a VAT inspection. Thanks to Dext, this laborious process is a thing of the past and can be fully automated, providing massive efficiency and storage savings. Dext has several other features. It's easy to use expense claim module, and the impressive Fetch functionality enables the app to pull invoices from over 2000 suppliers, resulting in no user input required.

3. ApprovalMax

Continuing the theme of innovative systems, the need for solid invoice and payment approval processes has never been more critical as cybercrime continues to evolve. Cybercriminals are using increasingly clever techniques to target and pressure unassuming members of the finance team into making fraudulent payments, usually in the form of an e-mail disguised as someone in the organisation instructing an urgent payment of an invoice.

One app which provides a solution to safeguard against these situations is ApprovalMax. Integrating seamlessly with Xero and Dext, ApprovalMax, in its simplest form, is a safety gate between Dext and Xero, ensuring only genuine invoices make their way onto the ledger for payment.

The approval structure can be set up to have a multi-level approval matrix, and each invoice can be allocated to specific approvers based on a magnitude of factors such as nominal code, project code, value and supplier to name a few. The distinguishing feature of ApprovalMax is its user-friendly mobile app. Approvers are sent a PDF copy in real-time of the invoice being put forward for approval which can either be approved or rejected. This process takes less than 10 seconds. If there isn't a robust approval solution in your business, you really should be giving thought to ApprovalMax, which can provide a sturdy deterrent to fraud, both internally and externally, for a very reasonable cost.

4. ‘Projects’ within Xero

As cloud users have become more accustomed to cloud technology's benefits, there has been even greater intrigue as to how much the accounting system, such as Xero, can play an integral part in day-to-day operational decisions. One feature which feeds this intrigue is the Projects feature within Xero. Allowing income and costs for individual projects to be siphoned off into mini profit and loss accounts gives users greater visibility of which areas of the business are driving profits, or on the converse, which areas or projects are consuming massive amounts of overheads whilst delivering little to bottom line profits.

The Projects feature provides the functionality to record staff time and allocate their costs according to each project. In contrast, in the past, staff time would usually be absorbed as an overhead across all projects, removing the visibility of how much profit each project is delivering to the business. The implementation of this feature and similar apps that provide this information is becoming growingly popular. It allows management to make real-time decisions that ultimately improve bottom line profits.

The advancement of cloud technology has been monumental to the finance profession over the past number of years. It will undoubtedly continue to evolve with technology in the coming years. The importance and demand for real-time financial data will continue to drive the development of these apps makes for an exciting upcoming period of innovation in the cloud accounting world.

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