Deloitte Private Connect  Entrepreneurs

WSBC presents the first in a series of three articles from Platinum Partner Deloitte on the power of the Cloud and accounting solutions.

The many benefits of the cloud are well understood by most entrepreneurs. The total cost of IT as a percentage of revenue is reduced and the savings can be reinvested in growing the business. But, for an entrepreneur, while the IT savings can be compelling, the biggest benefit of cloud computing is the agility it enables. Importantly, it gives the enterprise the flexibility to take advantage of opportunities and scale up effectively as the business takes off.

 

Of course, alongside all the benefits of the cloud, there are two downsides we often see. One is highlighted in a recent study by Intermedia and Osterman research that shows the average small business is drowning in cloud applications, causing inefficiencies, lost productivity and data integration issues. The report found that, on average, small businesses use 14 individual cloud applications and that each user interacts with more than five software applications. 

The other, perhaps more frustrating downside is that even when a business has made the right application choices, some are still using pre-cloud accounting practices. So while these businesses have come some way along the cloud journey, they still need to walk the final mile to get the full benefits of this exciting technology shift.

 

Let me explain. While many businesses have migrated their financial information to the cloud, they’re still working on a quarterly reporting timeframe – sometimes longer. Typically, businesses that do this have their bookkeeper or accountant produce a financial report for the previous quarter when their Business Activity Statement is due – which is almost three months after the end of the reporting period.

 

These businesses operate in a financial information vacuum from one reporting period to another. They don’t have information about their present financial position at their fingertips which, when used to its full potential, is exactly what the cloud enables.

 

In contrast, businesses that are taking full advantage of cloud accounting services can see their accounts receivable and accounts payable in real time. They can produce an up-to-the minute profit and loss statements and balance sheets. Then they can use this information to make strategic decisions about the future of their business.

 

One of our star clients, Crisp Creative Salad’s founder Ted Tolfree, is an entrepreneur who is harnessing the full potential of the cloud in his business. Having completed a full migration of his financial information to the cloud, all the business’s invoicing and accounting is done electronically, which reduces the potential for human error.

 

“Being able to see our overall spending and reporting whenever we want gives us the oversight and control I need as a business owner. So when we meet with our Deloitte Private advisor we talk about the plans for the business, instead of the day-to-day accounting. It’s taken the relationship to a new level,” Ted explained in a recent blog post. 

 

“We use other cloud-based software that integrates well with Deloitte Private Connect, so we can see the full picture across all aspects of our business,” he says. 

 

For entrepreneurs, having access to real-time financial information is absolutely vital.

 

• It gives founders confidence in the business’s financial figures when talking to potential investors.

 

Early stage ventures are by their nature risky enterprises. But there are ways that entrepreneurs can manage these risks. Having live financial information available is one of the best ways to do this.

 

Related: hear Ben’s thoughts on the ‘Inevitable Shift to Fixed-Fee Advisory Services for Accountants’ published on Digital First.