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Why Cloud Accounting Apps Are Magic For Your e-commerce Business Clients Seeking Marginal Gains

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There has never been a better time to start an e-commerce business which means that quick to the mark Cloud Accountants are targeting and winning clients in a a healthy new market sector destined to grow considerably for at least the next decade.

Platforms such as Shopify, Woo Commerce and Magento allows your clients  online stores to be live within a day, or even hours.  PayPal and Stripe allow payments to be taken across the world with ease, whilst dropshipping services from Amazon mean your clients never have to physically hold the stock of what they are selling.  However, because it is now this easy, they will not be alone in setting up stores.  So how do they stay ahead of their competitors? How can you ecommerce accounting service add value? One answer can be found in making consistent marginal gains with cloud accounting apps.

I first became aware of the concept of margin gains whilst reading the excellent Black Box Thinking book by Matthew Syed.  Black Box Thinking is a fantastic dive into how understanding and overcoming failures can lead to massive breakthrough, and is peppered with examples from business and sport.  One such example is the success generated by the Team Sky cycling team, whose General Manager Sir Dave Brailsford experimented with tweaks to a huge number of areas of his team’s performance. Individually each change was miniscule, from slight amendments to cycle design, diet and even the suits worn on the rides.  Some didn’t have any effect and were tweaked again and again until they gave a marginal gain on performance and against the team’s competition. Cumulatively, however, the effects were massive and the success enjoyed by the team in subsequent Olympic Games is testament to that.

So how can this concept be applied to your clients e-commerce store using cloud accounting apps?

  1. Automation

The more time spent on paperwork in their business, the less time available for analysing performance and expanding the product range.  It follows that any marginal gain achieved through automation should be exploited.  Some examples of how this can be done are:

  1. Ensure their e-commerce platform is compatible with your cloud accounting applications

Shopify and Magento, for example, feed in all online orders, including contact name, reference number, items sold and payment method used.  The result is simply no need to manually replicate any data from the website sales.  A2X and Cin7 are great examples of how this can be extended into marketplaces such as Amazon and eBay. Put simply, if their e-commerce store cannot do this their competitors are one step ahead. Advise them of this, they will thank you for it.

  1. Automate supplier bills processing

Same for sales above, why have someone manually enter your clients supplier bills.  Using Receipt Bank or Datamolino they can use OCR technology to create automated entries into Xero.  Manually processing supplier bills can be a massive drain on bookkeeping staff time. Freeing that up removes an overhead from you managing their business that can be applied to more value-added activities.

  1. Banks

One of the key criteria now when selecting banks is the ability of that bank to feed transactions into Xero.  If it can’t, they need a manual intervention every time you need to update your bank, and your supplier payables etc.  If their competitors aren’t having to do that and can respond to new opportunities for sales with an accurate real time bank balance, they will miss out.

  1. Analysis

One of the keys to e-commerce success will be driving efficiency from key metrics.  So, rather than analysing revenue in isolation, understanding how that revenue actually arose and how it performed against forecast. Revenue by product, margin by product, revenue by sales channel, cost of acquisition by channel, conversion rates by channel etc.  A growing e-commerce store will closely monitor these metrics daily.  However, the challenge is in getting the data efficiently and in 1 place.

Thankfully tools such as Futrli now exist to satisfy the analysis needs of your e-commerce business.  Futrli integrates with Xero to bring in all financial metrics live.  It then also allows non-financial metrics to be added, e.g. Google analytics and key traffic and conversion stats from your e-commerce store.  Combining these financial and non-financial metrics onto a single visual dashboard can enable fast analysis and swifter decision making.  Reacting faster than competitors can mean a huge gain especially around peak trading times such as Black Friday or Cyber Monday.

  1. Access to Funding

Growing e-commerce stores can grow fast but often needs working capital to support digital marketing, staff increases, expanding premises and increased stock levels.  A lack of finance can stunt growth and allow competitors to overtake.  But getting funding via banks is hard! Alternative finance exists purely as a result of the traditional high street banks inefficiency and inability to work with smart, growing online businesses.  So rather than wasting time meeting bank managers, completing paper forms and waiting for weeks before getting a lending decision, platforms such as Capitalise have been created to fast track this process online.  Capitalise pulls in key, live financial data from Xero and then applies a bespoke lending search across a marketplace of alternative finance lenders.  Information is traded online, without forms, and without having to be repeated for each lender.  The result is fast decision making and money in bank often within days.  It doesn’t take long to work out what e-commerce store can grow stock and marketing spend fastest when they access lending in this manner.

These examples are just some marginal gains that are being applied every day by successful e-commerce stores learning the power of cloud accounting.  There are undoubtedly many, many others further illustrating the fact that marginal gains in accounting efficiency, operational support and profitability analysis will build the framework for a long standing successful business.

Click here: If you are an Accountant wanting to target the eCommerce sector to win new clients.

bitcoin-for-accountants

Cryptocurrencies: Why the tax situation can’t be ignored

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Cryptocurrencies such as Bitcoin and Ethereum have been a hot topic of late. With Bitcoin ATMs appearing in convenience stores, and an increasing number of business accepting cryptocurrency as acceptable tender, their legitimacy in the eyes of the general public has grown. In this article we’ll take a look at what cryptocurrencies are, how they work, and why you should understand the tax situation before diving in.

For the purposes of this article we’ll often refer to Bitcoin as a representative cryptocurrency, as this particular cryptocurrency accounts for around 50% of the total market capitalisation. It should, though, be noted that Bitcoin is just one of over 900 cryptocurrencies, and that its market share has dropped – in large part due to growth in the Ethereum and Ripple cryptocurrencies – from over 80% in January 2017.

What is a cryptocurrency?
In the simplest possible terms, a cryptocurrency is a digital currency. In this respect it is not unique – in a way, much of the traditional currency we use every day is in a digital form. However, cryptocurrency differs from traditional currencies in a number of ways.

First and foremost, cryptocurrencies are not governed by any central bank, nor do transactions involving them have to pass through any such institution. Bitcoins are created through a process called ‘mining’, which effectively perpetuates both the independence of the currency, and its use. Mining is a competitive process in which users utilise specialised hardware to process transactions and are rewarded for their activity. Bitcoins are credited to a user’s wallet, and all transactions occur directly between two wallets.

The use of cryptography is also a defining factor. Each user has a unique, anonymous and ‘uncrackable’ signature, and all transactions to and from that wallet are stamped and logged with it. These transaction stamps contribute to a central and public database referred to as the blockchain. This reliability and transparency is designed to make transactions less susceptible to fraud, and to enable greater confidence for merchants and users of all kinds.

 

What is a blockchain?
As described above, a cryptocurrency runs on a blockchain. A blockchain is a shared ledger or document, duplicated across a network of computers, that contains a record of every single crypto-transaction and the ownership of every single unit of the cryptocurrency. Transactions and ownership information are logged with identifying cryptographic sequences that are, to all intents and purposes, entirely anonymous.

The updated document – the blockchain – is distributed and made available to all holders of the cryptocurrency. It is run by miners, whose powerful computers are utilised by the network to process and log transactions and ensure the authenticity of information, guaranteeing safe and proper processing.

Why are people investing and what are the risks?
The value of Bitcoins has skyrocketed this year, inviting a lot of media attention and a lot of speculation on whether or not it represents a good investment. At the start of January of this year one Bitcoin surpassed $1,000, and by mid-August had reached and exceeded $4,000. Coupled with low susceptibility to fraud, investing in a product that has essentially quadrupled in value in less than 8 months could well seem like a clear choice.

However, there are factors that one must take into account when looking at these figures:

1. Volatility. The total number of Bitcoins in circulation, and the total number of businesses using them, is relatively small. This makes the value at any given time particularly susceptible to relatively low level market forces. What would be a trivial event to an established currency can have dramatic consequences for a ‘start-up currency’.

2. Infancy. Cryptocurrency is still in its infancy. As such, the software and networks that facilitate are evolving rapidly, and these could realise great changes in the operation of the currency.

3. Speculation. Coupling the previous 2 points, cryptocurrency is highly susceptible to speculation. The lack of history and the not-yet-upscaled nature of the commodity means that nobody has a clear idea of how high it might peak, and whether or not it will trough.

 

Taxation and cryptocurrency
Whether and how Bitcoin transactions and activities are subjected to taxation are, in some ways, subject to the legal definition of cryptocurrency – namely whether or not it is defined as money. In other respects, for different types of taxation, whether a transaction is completed using Bitcoins or traditional forms of money is immaterial, and tax should be collected as usual.

At this stage cryptocurrencies fall outside of the European Central Bank’s definition of money, meaning that VAT is not applied. Income relating to Bitcoin mining, exchanges of Bitcoin for physical/national currencies, and income from activities related to Bitcoin are all currently exempt from VAT. However, VAT will still be due on products and services that are exchanged for Bitcoin in the same way that it would be if exchanged for any other currency. The VAT due is calculated as the Sterling value of the Bitcoin exchanged at the point of sale.

Regarding Corporation Tax (CT), Income Tax (IT) and Capital Gains Tax (CGT), the treatment of income received from, and charges made in connection with, activities involving cryptocurrencies should be viewed in the context of specific cases and the related circumstances. Generally, though, the following summaries apply:

CT – the profits or losses on exchange movements between currencies are taxable, with the general rules on foreign exchange and loan relationships applying. As it is currently interpreted, no special tax rules for Bitcoin transactions are required. The profits and losses of a company entering into transactions involving Bitcoin would be reflected in accounts and taxable under normal CT rules.

IT – the profits and losses of a non-incorporated business on Bitcoin transactions must be reflected in their accounts and will be taxable on normal IT rules.

Chargeable gains: CT and CGT – if a profit or loss on a currency contract is not within trading profits or otherwise within the loan relationship rules, it would normally be taxable as a chargeable gain or allowable as a loss for CT or CGT purposes. Gains and losses incurred on cryptocurrencies are chargeable or allowable for CGT for an individual, or for CT on chargeable gains if they accrue to a company.

Due to the evolving nature of tax regulations for cryptocurrencies, as well as the individuality of circumstances considered, it’s important to keep your clients accountant up to date with all gains and losses.

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Online Tools For Accountants

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There are 5 tools that almost all the Accountants that we speak to are using to digitalise their Accountancy practice. If you are not using at least 3 of these tools then you risk becoming left behind in the pack.

With the onset of Making Tax Digital and the new breed of entrepreneur climbing the ranks, soon if you do not offer cloud accounting services then your prospective clients will be looking elsewhere for the services you offer.

Click here to download the 5 Top Tools Accountants Use To Digitalise Their Practice

The top 5 tools cover almost all areas that you will need to digitalise your practice from prospecting, collaboration with team members right through to preparing your clients accountants.

Here at Cloud Accountant Today, we appreciate that ‘digital’ migration is not always a key skill for many accountants. It can be scary, overwhelming and for those of you that are not too tech savvy quite often a real thorn in your side.

If you are looking for help or support to make sure that your practice is as digital as it can be and are looking for training on various online accounting tools then please fill out our short survey for a free digital consultation.

For those of you that are more inclined to develop your practice alone then please download your free report: 5 Top Tools Accountants Use To Digitalise Their Practice

cloud accountaing applications

4 Practical Examples Of How Cloud Accounting Applications Can Transform Your Clients Business

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Young Companies are seeking to scale in cash tight environments, the ability to access real time financial information is of prime importance, both for internal analysis and decision making, and also to assure external stakeholders, such as banks, that the Company is moving forward in the right direction and the correct pace.

Xero is therefore critical to your firm’s approach in providing these services and should be utilised by ALL of your client Companies.  If they are not on Xero you simply can’t deliver the full value add service you strive for.

The added benefit to using Xero, however, is the ability to utilise the Xero Add-On ecosystem and create bespoke, tailored business processes for each individual business.  You should take the opinion that, a startup company should seek to implement, from day one, effective operational and financial systems that can scale with the business without significant additional cost or manual input at a later date.

Xero allows you to do this and add significant value to your Clients from the outset of their business, increasing their investment attractiveness and reducing costs in the long term as revenues commence and grow. If you are new to the cloud accounting world, this article will hopefully give you a better understanding of the types of application that exists, and what benefits they can bring.

Nuvem9 one of the leading cloud accounting specialists  likes to categorize the Add-On ecosystem into the following categories of solution when discussing with clients and you should do the same:

 

  1. System Integration – these add-ons are cloud solutions in their own right but have a Xero interface that allows the transfer of financial data from that solution into Xero. This removes duplicated data entry, reduces the risk of user error, and integrates the Company’s financial system better into the wider operational processes for that business.  As an example, Nuvem9  have a client that has integrated its Magento webstore with Xero, thereby enabling all transactions on its online site to be transferred into Xero as draft invoices at the start of each working day. They previously used Sage and had to employ a clerk solely to input the records from Magento onto Sage;
  2. Data Automation – there are a growing range of tools that are being used to take previously manual intensive financial processes and automate them via specialist Xero add-on tool. For example, Satago and Chaser allows for automated and consistent credit control processes and Receipt Bank removes Purchase Ledger data entry costs via OCR automation.  In this day and age, our rule is that, if any financial process in the business is repeated, there will be an Add-on to automate that process;
  3. Process Enhancement – these tools add value to an existing process with a Xero link. Once set-up they will continue to generate savings for a business time and again. For example, Stripe, Paypal and GoCardless payment links on sales invoices will increase the speed at which an invoice is paid, and using integrated foreign exchange applications such as Transfermate will speed up outgoing payments; and
  4. Deeper Analysis – whilst the range of reporting in Xero is good and growing with each release, the default nature of the report formats mean it is likely a Client will have a specific need that cannot be met directly in Xero.  The availability of tools such as Fathom, Spotlight, Futrli, ProfitSee and Float enable data to be exported from Xero and analysed in much more customised detail in the reporting tool.  This is essentially the modern way of taking data from a Sage desktop system and analysing on spreadsheets, but without the time, errors and inflexibility a spreadsheet based report would provide.

 

Nuvem9 has developed a wide network of applications and this enables them to create a tailored formula of solutions from each of these categories as appropriate for each client. The solutions are primarily designed for the client to gain fast access to information and scalable growth, but also to allow us to keep costs to a minimum. Truly a win-win for all involved.

 

If you would like more information on how cloud applications can benefit your practice and would like support in client set up and training for your staff then please register your interest here.

How to be XERO certified

By | Practice Technology, Resources, xero | No Comments

A whole new world opens up to your accounting practice when you pass the XERO Certification test.

And the best thing is it’s easy to get xero certified by completing a series of self paced, video based online training. You need to have completed the XERO Essentials course and be a partner already. This may sound like a lot of work, but it isn’t.

Once you have completed XERO essentials you simply apply to be certified.

Click here for XERO Essentials

It’s that simple.

And remember before you start your online course contact us to learn how we can help to build your online presence and set you up with a highly converting digital sales funnel to help find you new cloud accountancy clients.

How to be XERO certified video desciption

Accountants and bookkeepers can now learn all about Xero accounting software, and become certified, online. The training is self-paced and available any time, anywhere, from any device with an internet connection. You just need to head to the training tab in My Xero for Partners and activate online training. You’ll be able to see the progress you’ve made on current courses, other courses available to you and any training you have completed. Watch this video tutorial to learn more about the process!

Xero is beautiful accounting software for small businesses and their advisors. See your cashflow in real-time with online accounting, invoicing, payroll, billing & banking. Just login and see the difference. Sign up for a free trial at https://www.xero.com/signup

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GDPR Data Storage Solutions

By | GDPR Advice, Practice Technology, Technology | No Comments

GDPR-data-storage

One of the most pressing issues that you as a cloud accountant face is the impending GDPR (General Data Protection Regulation) which will directly affect you if you store data on any of your clients or prospects.

The General Data Protection Regulation (GDPR) (Regulation (EU) 2016/679) is a Regulation by which the European Commission intends to strengthen and unify data protection for individuals within the European Union (EU). It also addresses export of personal data outside the EU.

When the GDPR comes in to effect which will be very soon,  the European Union can  fine you up to €20 million or 4% of your annual turnover if you  are found to be in breach of the new laws data on EU Citizens to implement appropriate security measures.

A simple fix on data storage to prepare for this is to make sure all your data is stored on a GDPR Data Storage solution such as a Discashur DT

The iStorage diskAshur DT is the world’s first portable hardware encrypted hard drive with PIN code access and utilises military grade XTS-AES 256-bit hardware encryption, which encrypts all data stored on the drive in real time.

Due to a sharp rise in people wanting GDPR Data storage solutions stocks are continually running out so make sure to click here to get yours today

For further reading make sure to follow the EU General Data Protection Regulation 2016 that explains all the legal requirement for storing data that you need to know.

It covers key issues such as;

  • GDPR data encryption,
  • GDPR Data Storage,
  • GDPR data portability,
  • GDPR data security,
  • EU data storage regulations
  • GDPR hard drives,

We are no experts on this so make sure to do your own research and use your own due diligence  but if you need advice or seek guidance on preparing for the new regulation then make sure to visit sites like www.coralcompliance.com who can walk you through the process.

Deputy – The ultimate time tracking software for XERO

By | Practice Technology, Technology, xero | No Comments

deputy-xero-add-on
If you want to help your clients save time in their day then you should introduce them to Deputy.

Deputy is the ultimate workforce manager, offering your client the best technology in a web based solution.Simplify their rostering, timesheets, tasking and employee communication administrative tasks. With brilliant apps and one click payroll integration Deputy can help make your clients life easier.

deputy-xero-add-on

With Deputy you can help your clients:

Keep track of when and where their team starts and ends their shifts with it’s mobile apps or kiosk.

  • Complete their payroll in one click by automatically calculating their overtime, penalty rates and allowances.
  • Create fully costed employee schedules in no time and notify everyone with just one click.
  • Easily see who worked when, create, approve and export timesheets to payroll software.
  • Easily capture when and where their people work for greater HR compliance, payroll accuracy, and insight into workforce productivity.
  • Give their employees an easy way to stay informed, share important messages and contribute to the workplace conversation via their mobile devices.

deputy-xero-add-on

Click here to visit Deputy 

Float – The software making cashflow forecasting simple

By | Featured Technology, Practice Technology, Technology, xero | No Comments

 

Meet Float – a delightfully simple and award-winning cashflow management software that automates your clients cash forecasting saving them and you hours of time each month.

Founded in 2011 by CEO Colin Hewitt, Float has been at the cutting edge of cashflow forecasting and making Xero, Freeagent and Quickbooks users life simpler and more productive by helping businesses keep on top of their cash flow.

We managed to catch up with the Float team to ask them a few questions…

Tell us a little about yourself

FL: We’re based in Edinburgh with a team of 10 and we’ve been around since 2011. We now integrate with three accounting platforms: Xero, FreeAgent and QuickBooks Online.

Tell us a little about your tech firm and why you started it?

FL: Float is cash flow forecasting software for business owners, finance departments and business advisors. We integrate seamlessly with QuickBooks Online, FreeAgent and Xero to give you an easy-to-understand but powerful tool that provides an accurate, real-time view of your bank balance next week, next month, next year and beyond.

Colin Hewitt started Float after having run a digital agency and experienced the pain of trying to manage a cash flow spreadsheet. Realising that there had to be a better way, Colin started to build Float.

float-xero-sage,free-agent-quickbooks

What are the main features of your tech services?

FL: Set budgets for expected cash – in Float, you can create budgets (placeholders) for cash you expect to pay or receive, even if there are no bills or invoices associated with them yet.

Giving you control – Float makes intelligent projections based on the due dates on your bills and invoices. You then have further control to manually update that data to better reflect what’s actually happening.

Always up-to-date – Float’s seamless integration with your accounting software means that your forecast will always be up-to-date.

Easily share your forecasts – Add your accountant, employees or investors as users to simply share your forecasts online. Or just export your forecast as a PDF and send it to them.

No number goes unexplained – With Float you can drill into the detail behind the numbers and make notes, meaning you’re never more than a click away from completely understanding your numbers.

float-cashflow-forecasting-for-cloud-accouuntants

What key benefits do you consider that your tech offers to people thinking about using it?

FL: Benefits for accountants and bookkeepers: We offer a partner programme that comes with a free account for your own practice, 40-80% off the cost of Float for clients, a dashboard to view all client companies and complementary client training.

Cash flow forecasts business owners can understand and use – Simple cash flow forecasting for small business owners, and you don’t have to be an accountant to use it.

Manage your short term cash flow Float forecasts when cash will move in and out of your account based on data from your accounting software. You can now predict what your bank balance will be at any point in the future. Stop lying awake at night, and wrap yourself in bedsheets, not spreadsheets.

Forecast the longer term – Float helps you answer difficult questions about the future, such as ‘What will happen to my bank balance if sales increase/decline over the next 6 months?’ or ‘Should I buy or lease the new company car?’

float-cloud-accounting-xero-addon

Does your tech firm focus on any specific sectors or industries?

FL: Our users come from a wide variety of backgrounds, and tend to be either business owners or business advisors.

Client Testimonials

“Float is brilliantly simple. It gives a business owner the ability to easily predict cash flows and identify any problem areas. Its simplicity makes it easy to update and really usable as a day to day management tool.”
– Gail Bainbridge, Bainbridge Lewis

“By using Float I am now able to help my clients in a way that I simply wasn’t able to before. Float delivers pertinent cash flow information to my clients efficiently and effectively, using data sourced straight from Xero! It does exactly what I want – it provides an extra layer of insight for my clients in relation to their business operations.”
– Geoff Trabant, Easy Online Bookkeeping

“I am finding Float an excellent app for management of my clients’ goals and expectations. Many of them are going through a growth surge and the Float tool is working as a daily point of focus and for longer term planning.”
– Nick Houlbrooke, Houlbrooke Group

“Float is awesome, I previously used a spreadsheet for my cashflow forecasting which was high maintenance and inaccurate and since using Float I have never looked back. I don’t know how anyone can run their business without it!”
– Denny O’Halloran, Roofline

“Float helps us understand how much cash we have to reinvest into the business and make sure no one goes unpaid. It’s really helped us get a better understanding of where we’re headed.”
– Shane O’Connell, Summer of Dev

“Your accounting software helps you look at your business going backwards, Float lets you look at it into the future. It’s simple, and you don’t need to be an Excel master to run it.”
– Avery Dorland, Windigo Online

If you’re a financial advisor (cloud accountant, bookkeeper or virtual FD), read more about their partner program and available discounts at www.floatapp.com/partners

Check out float here;

www.floatapp.com
Twitter: @floatapp