There’s a stereotype about accountants that we want to address—they say we’re boring, unimaginative, and a necessary compliance cost for doing business. But here at Harvest Accounting, we want to show our clients that accountants don’t have to be anything like that.
Accounting is important. It’s required by law. Failure to comply with any of the constantly changing tax regulations or requirements will result in needless fines and penalties.
But at Harvest Accounting we can do so much more than compliance. We provide the visibility to help our clients better manage cashflow, the lifeblood of any business. We help business leaders make sound financial decisions and take their load off so they can concentrate on doing their best work.
We practice effortless accounting.
We make your financial obligations, regulatory compliance, and business operations that much easier for you, whatever your needs may be. And digitalisation has a lot to do with that.
To understand effortless accounting, in this article we’ll be talking about:
- A brief history of accounting and the impact of digitalisation
- Accountancy is still skills-based
- The biggest winner of this evolution is the SME
- We are not ‘just’ accountants
- Small business, big impact
A brief history of accounting and the impact of digitalisation
Accounting has been around for thousands of years, with bookkeepers keeping ledgers as far back as pre-2000 B.C. As civilisations were still using barter systems instead of cash at the time, ledger entries read more like narratives.
For example: “Monday, May 12 Pre-2000 B.C.: In exchange for three chickens, which I provided today, William Smallwood (labourer) promised a satchel of seed when the harvest is completed in the fall.”
Bookkeeping evolved alongside the birth of currencies, and in the 13th century single entry and double entry systems were born.
Technological improvements throughout history have transformed accounting to make it incrementally more efficient and cost-effective. In recent years, digitalisation has completely transformed the way we approach accounting.
First came T-ledgers, paper entries, the spreadsheet, then desktop software, and now cloud software.
Bookkeeping of the past involved writing down a narrative, which probably resulted in a lost chicken or two. Paper accounts and spreadsheets are prone to human error. And desktop software is robust but not easily accessible, user friendly, or scalable.
The best accounting platform today for small businesses is cloud software since it can encode data into a digital format and utilise automation to minimise human error. The most convenient cloud software for small and medium businesses (SMEs) are those that use a Software-as-a-Service (SaaS) model, since all you need is a monthly subscription to begin using it.
Look for ones that can connect and speak with other software, reduce duplicate data entry, and easily manipulate data from one form to another in order to gain insights—all faster, and in some cases, in real time.
No more digging through paper files to find a certain transaction. Everything is now accessible with a few mouse clicks, in its right and logical location.
To sum it up:
- Automation takes on repetitive tasks and removes human error
- Software integrations streamline the accounting process
- Improved efficiency lowers cost
- Data and reporting improves business for clients to enable better decision making
How do you begin the digitalisation journey for accounting?
Personally, we love using Xero, a cloud-based accounting software for SMEs. We love it so much that it’s the only platform our firm offers to our clients.
All the data and information is readily available in the cloud so you can get reports and insights on the financial health of your business wherever in the world you may be. If you measure specific KPIs, we can further enhance reporting with graphical analysis through add-on reporting apps that can plug in directly to Xero.
One of the best things about Xero is that it can be integrated with over 800 applications to broaden its capabilities. That means we can tailor our clients’ software stack to suit their specific business needs. Whether you’re in e-commerce and need to manage inventory or you’re in professional services and need to produce detailed proposals. We can help you even if you use different payment platforms or would like to send out promo codes to your most loyal customers.
There’s an app that can extend Xero’s capabilities for any business.
Accountancy is still skills-based
Technology alone won’t solve everything.
Early in our careers, before cloud software existed, clients would give us their financial statements in whatever form they liked. Sometimes they would hand us a bunch of jumbled papers in no particular order. If we were lucky, we would receive spreadsheets—but no guarantees these would be balanced.
Using Xero and other cloud based apps has dramatically reduced the need for data entry, re-organisation of information, and formatting. Previously our clients visited our office once a year for compliance, now we’re able to work side-by-side virtually with our clients in real-time, on a single platform.
With reduced time spent on data entry, we’re free to spend more time on value adding services—the type of services only an accountant can provide.
Accounting—no matter how evolved—is still a discipline, and one that requires professional knowledge. Without the knowledge or the skill set to do proper accounting, even with the most cutting edge technology, financial statements will be incorrect, or worse—non-compliant with tax regulations and financial reporting standards.
Accounting is best left to accountants!
Many small businesses want to save money by doing the accounting themselves with tools they already have. While this is indeed the cheapest way to manage your financial obligations initially, it’s not necessarily the most optimal in the long run.
Accounting for any business, big or small, takes time—especially if you’re doing things the old fashioned way. This takes time away from core business activities. Instead of crossing your eyes over number after number, you could be spending your time on product development or marketing strategies—doing what you do best and spending time on the things that made you want to start the business in the first place.
Technology may have opened the doors to more efficient accounting, but nothing can replace the skills and know-how of a professional accountant, especially now that technology is transforming the role of the accountant in the workplace.
At Harvest Accounting, we combine professional accounting with best-in-class technology to provide the most seamless experience possible.
The biggest winner from this evolution is the SME
There are a number of reasons why digitalising and outsourcing accounting would be beneficial for SMEs of any size or industry. Let’s go through a few examples.
Harvest Accounting is grateful to partner with and support many clients in the creative, media, and advertising industries. For a lot of these clients, the transaction volume might not be high enough to warrant an in-house finance person, but they still need someone to manage their financial obligations so they can concentrate on their creative work.
That’s where we come in.
When Nas Daily made headlines announcing his plans to move to Singapore in early 2019, we were able to support his vision and grew alongside him as his team expanded from three to over 40 staff, both locally and remotely, in just under two years.
We were able to provide him with timely and relevant monthly reporting to keep him informed, all while ensuring his business was compliant with local rules and regulations. We also provided easy and efficient ways for his team to manage their operations, including implementing totally digital workflows for his staff to make expense claims. This was all made possible through the cloud.
For companies with high transaction volumes, particularly those in e-commerce or the B2C space, it may also make sense to have an in-house accountant supported by an outsourced accounting firm. Because Xero can be linked to major banks in Singapore as well as many online payment gateways such as Paypal or Stripe, we can efficiently process high volumes of financial transactions. This frees up time for the in-house CFO so he or she can focus on decision-making rather than data entry and processing.
HipVan is one of the most well known online home furnishing stores in Singapore, with designs catering to a young audience. We help them manage enormous amounts of sales orders each month and make vendor payments a breeze. By automating a lot of transaction processing, we are able to ensure their CFO gets timely and high quality financial data to make important decisions and stay accountable to investors.
Digitalised and outsourced accounting services are perfect for all kinds of work setups. Several of our clients are remote teams, meaning they operate in separate locations and may not physically work in the same space. Harvest Accounting, as a digitally native company, operates this way. Many former in-office teams have also shifted to remote work due to Covid-19 as well.
The only way to manage the finances (and other business aspects) of a remote team is through digitalisation.
Even in 2020, when so much of what we use in our personal lives is in the cloud (Gmail, Spotify, Youtube, Instagram, Netflix), we’re still seeing many companies require staff to submit expense claims by pasting or taping receipts to the back of scratch paper and submitting them to HR along with a paper form. Not only is it inefficient, it’s unfeasible for remote teams to follow the same procedure.
This is why we provide all our clients with the digital solutions to help them jumpstart their digitalisation journey and meet their needs. All our clients get Xero and ReceiptBank as part of their package.
ReceiptBank allows businesses and team members to take pictures of receipts and submit them through the mobile app. The information from the receipt (even handwritten ones!) is automatically extracted using accurate optical character recognition (OCR) technology and exported straight to Xero. Minimal data entry is required by both ourselves and our clients leading to more efficient processing with fewer manual errors.
The great thing about using an application like Receipt Bank is that it’s accessible 24/7 from anywhere in the world. So whenever you want to submit a claim, you can simply use the app or email your receipts to a dedicated Receipt Bank email address, and all the information will be sent to us for processing, safe in the cloud without anything more for you to worry about.
By providing these digital tools right from the onset, we assure you the transition from manual to digital accounting will be a smooth and eye-opening journey.
We are not ‘just’ accountants
Because software can automate a huge percentage of our work, some accountants are threatened by digitalisation and automation, and are afraid of becoming obsolete in the future.
At Harvest Accounting, we embrace change. We are dedicated to utilising best-in-class products and are always ready, willing, and excited to learn about new software solutions to add to our stack and improve the way we work. We believe that digitalisation will disrupt the profession for the better, not just in making accounting easier and more efficient, but for our role in our clients’ businesses as well.
We are more than accountants. We are strategic partners, financial advisors, and small business evangelists. We go beyond bookkeeping and help clients identify operational bottlenecks and reimagine workflows, and we determine suitable add-ons and technologies from the Xero ecosystem to fit your unique business.
For example, Shopify has become a great tool for small businesses to set up shop online. While making sales is great, things quickly get complicated once you hit a couple hundred SKUs. Problems can be magnified further when products are sold on different channels, like physical stores, pop-ups, or on consignment in addition to online.
Harvest Accounting has been able to recommend and implement appropriate Inventory Management Systems that can integrate with both Shopify and Xero. Clients such as Trybe and Lula J Jewelry have successfully integrated an inventory management system, allowing them to streamline their workflow, organise inventory over multiple locations, accurately determine profit margins, and reduce duplicate data entry, friction, and extra steps.
At the end of the day, digitalisation is about improving and evolving the accounting experience. A profession that’s been around since pre-2,000 B.C. needs to adapt. And with more and more businesses embracing digitalisation, accounting needs to keep up with changing business needs. Harvest is right at the forefront of that endeavour.
Small business, big impact
While outsourcing your accounting to a digital accounting firm might seem like a pain, it’s the most incremental of changes that make the biggest impact. Something as small as submitting your receipts online can save so much time, effort, and paper too!
Other than the obvious impact in business efficiency, digitalisation also has a lot of intangible benefits that align with our own values as a company.
For us, effortless accounting is also:
Digitalising our business and our clients’ business means less paper is being used. No more ring binders piling the shelves, no more printed forms, no more scratch paper is expended for accounting purposes. Using cloud-systems ensures our clients have all the historical data they need while lessening their environmental footprint.
Technology has made our service accessible from anywhere and for any type of business, whether you work on-site or fully remote. It means that your staff can access the information from anywhere, and that we can access and update the same information, even from afar. Our service is adaptable to your accounting requirements.
With cloud-based systems, there’s no need to buy more cardboard boxes or invest in on-premise storage or servers. Our tools will scale with your business, even when you make big, structural changes with regard to how you work. As clients shifted from office to remote work, there was virtually no impact on their accounting processes.
No need to worry about the bill either. Since software costs are payable on a monthly basis instead of a multiyear license, Harvest is also able to bill our services on a monthly retainer basis. No more shocks from the hourly billing used by traditional accountants.
With the time-consuming aspect of accounting out of the way, you can fully focus on doing better business and giving your customers what they need. We are not satisfied with the status quo many accounting firms have of filing your taxes once a year. Through cloud solutions we can offer so much more.
Leave the number crunching to us
With effortless accounting enabled by the cloud software, we’ve got your back. Get in touch with us here to find out how simple accounting can be.