3 Ways The Digital Economy Will Affect The Way You Work

As more transactions take place entirely online, how can you make sure your firm is staying up to date?

Accounting technology has come a long way over the last 10 years, but the trend for digital goes way beyond the back office. The ATO refers to it as “a rapidly growing digital, cashless and data-rich economy”, and how you react to it will shape the future of your firm.

The Digital Economy

Most big changes start with one thing in mind – money. Which also happens to be the chief concern of accountants. But it’s also being driven by governments, consumers and day to day behaviour.

All over the world, tax authorities are realising how much time and effort they can save by taking their systems online. First of all, they could cut down on missing documents and manual work. But their dream would be linking their systems to a complete digital archive and maybe even automating the audit process.

Meanwhile, a growing proportion of transactions take place entirely online – the details are generated, stored and moved online. In many cases the service delivered is a digital service, such as content, software or storage.

Finally, clients are living digital enabled lives, managing their businesses from their phone, working on the go.

1. You need access to the digital data landscape

Consumer behaviour is driving the pace of change in the digital landscape which is why digital solutions offer a convenience that businesses love.

Now, more so than ever before, transactional data is being created and tracked digitally. The systems of how we receive that data is changing but the three elements that are the key measurements of financial activity for SMEs remain unchanged. When it comes to bookkeeping you need to make sure you can access your clients’:

Expenses Data

Expense data can now be digitised nearly instantly via OCR software from a document. There are also next generation SME bank accounts which aim to make this process instant by linking transactions with ledgers.

Sales Data

Electronic Point-of-Sale (POS) systems can now be linked to an online General Ledger to record all sales the moment they happen.

Bank Data

Bank feeds now come straight into many General Ledger software packages. The government will also force all major banks to make their data available via API by July 2019. In addition, OCR tools can read bank statement data and turn it into a CSV for upload into the General Ledger.

2. Automation will only increase

A common rule of thumb for automating a process starts with two things: having the inputs needed for the process and a task that is easily repeatable. If you ask yourself if you have those two things and answer yes to both — you have the inputs needed and you keep doing the same thing again and again —  it could probably be done better by a machine.

In bookkeeping, the inputs are data – receipts, invoices, line items, bank data, and the like. More and more of this data is moving online because of the demands put in place by consumer behaviour. Both shopping and banking happen online and so that answers the question, is that data accessible?

The second questions is, is the task of data entry repetitive? As any accountant or bookkeeper would answer, absolutely. Just because some manual bookkeeping tasks are in a position to be successfully automated does not mean that clients no longer need their accountants. In fact, quite the opposite is true. Firms who make use of bookkeeping automation tools see huge benefits.

3.  Digital Firms Are Setting The Pace Of Growth

Digitisation has a direct effect on the efficiency and profitability of your practice.

The effects can be seen in a recent study of Australian firms by Xero that compared performance of firms according to their number of clients on using digital software.

The differences in their growth journeys are striking when comparing those with a lower number of online clients (6 – 35) and those with more than 100.

Digital firms grow three times as fast as their non-digital peers and are able to handle 225% more clients per team member. Client retention in digital firms is also 60% higher as a result of improved service levels and ease of communication.

Digital firms are ones who are setting the pace for the future, and it’s happening at every level of the market.

How To Keep Up

The chief advantage of the new digital landscape is the accessibility of data. And that’s not just about bank feeds and robots. It can be something as simple as a client using their mobile phone to take a picture of a receipt instead of waiting a month to give it to you.

Many firms use Receipt Bank to save time on their bookkeeping. Clients just take a picture of their receipts with our app, and we extract the key data and send it to you. All you need to do is review it.

But whatever you do, the goal is to minimise the time you spend sourcing, processing and managing data by implementing systems that do the work for you.

This means you can spend more time working on the data, using it to find insights, opportunities and advantages that make a difference for your clients’ businesses.

Because SMEs in the digital landscape still need a trusted advisor to make their data valuable. Make sure you’re ready to provide that value.

In brief

  • More financial information is moving online, driven by policy, commerce and consumer behaviour.
  • Accounting practices need to adapt to the digital landscape or risk providing less value to clients.
  • Firms who adapt are setting the rate of competition, but small changes can make a huge difference.

Find out how Receipt Bank can help you with your pre-accounting and digital bookkeeping needs. Find out more at Receipt Bank.

 

“How you react to the era of digital data will shape the future of your firm”

Luis Sanchez | GM Receipt Bank Australia

Luis Sanchez

General Manager at Receipt Bank
Luis started his career with several multinationals, and then moved his focus to accountants and bookkeepers. He spent six years with Intuit in America, doubling the size of their accounting business before joining Intuit Australia in 2016 as the Marketing Director. In 2 years, Luis tripled the Intuit Australia business from 53k customers to 161k customers.

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About Author

Luis Sanchez

Luis started his career with several multinationals, and then moved his focus to accountants and bookkeepers. He spent six years with Intuit in America, doubling the size of their accounting business before joining Intuit Australia in 2016 as the Marketing Director. In 2 years, Luis tripled the Intuit Australia business from 53k customers to 161k customers.