The days of your business accountant being somebody you hand over files and receipts to once a year and get handed back a large bill in return, are on the way out.
Automation through cloud-based accounting software gives many business owners, self-employed people, and those who need to send a tax return, the chance to DIY their accounting.
It can be a really efficient, cost-effective way of doing your books, and it is also giving Natalie and Spencer Giles, accountants at NSG Financials Ltd, an opportunity to be more than the stereotypical small business accountant. They embrace the automation because rather than make their role redundant, it frees them up to help more people get savvy with their finances.
“We are often more business advisor than accountant,” Spencer says. “We have accountancy knowledge but effectively a lot of that is now automated so we just have huge amounts of data…”
They can now help people use that data in real time to grow their businesses by analysing what the numbers are telling them.
“If you’re new to it, it’s not always easy to understand or you might work with it in an antiquated way,” he explains.
“Don’t go overboard. Sometimes the basic software is all that’s needed. We can advise on just the apps you need so you don’t overspend.”NSG Financials Ltd
Growing a business
“You would usually go to the accountant at the end of the tax year and whatever comes out at the end has already happened, is set in stone; there’s not a great deal you can do about it. We are trying to reverse that so people can speak to us more regularly so we can do things as we go along. We can see what is happening… we can advise the best routes and most tax efficient ways of doing things… It means they are more on top of their businesses, they know what’s going on, they understand a little bit more and have a better direction. We are trying to help them grow.”
By working with their clients in this way, they make the most of the automation by helping them be more proactive about their finances and their business.
It’s important to understand the data says Spencer because “if you don’t understand the business and numbers around it, your competitors are at an advantage because you’re working blind.”
Real-time data for real-time solutions
While cloud-based accounting can be very time saving and efficient, people still have questions about taking money out of the business, expenses, vehicles, payroll, VAT, and tax, which can seem like a minefield.
“It’s about knowledge of what you’re doing and understanding how the systems work; what’s allowable and not allowable. If you don’t have that expertise, you can spend a lot of time looking around the subject just to find out where to put things,” Natalie says, highlighting why a small business accountant is still a valuable investment.
It also allows them to help more people in the current climate understand what help is available to them and how to use their numbers to apply for support. “The data is all there so we can help transfer or provide the information needed to apply for loans and grants. People set up like that can get an answer much quicker”
They operate a subscription service so customers are not presented with a large end of year bill and can speak to them throughout the year without worrying about the cost of every phone call.
“People need to know where their business is at rather than take a box of receipts to the accountant once a year,” says Spencer. “It’s about having that good relationship with our clients so they feel comfortable and can call us anytime and won’t have a large bill for doing so – it is all incorporated in the services we provide. It actually saves time at the end of the year because everyone has kept up to date… And there shouldn’t be any nasty surprises.”
“ If you don’t understand the business and numbers around it, your competitors are at an advantage because you’re working blind.”NSG Financials Ltd
Sustainability and security
Automation is also one of the ways NSG Financials Ltd like to be sustainable, which is a big part of their ethos. Their Devon-based offices are solar-powered, cloud accounting and document-signing technology allows them to be virtually paperless, and they are very careful about what they buy personally and for the business.
“We use ethical companies and products,” says Natalie. “The whole concept is trying to reduce our environmental impact and also educate our clients about it as well… If they want to invest in businesses, we can point them in directions that are environmentally sustainable.”
In their advisory role, they can also recommend good security practices. “To get it right, you need to be safe, secure, and streamlined,” says Spencer. “There is more cybercrime now. As a business owner, as soon as you touch any person’s data, you have to be secure.”
Adapting to working from home
“There’s a transition from being in the office. Part of it is knowing what you can claim for when working from home,” says Natalie.
Those who are self-employed may be used to claiming expenses and a portion of their utility or phone bills. If you are having to work from home on a regular basis, there are certain costs you can claim tax relief on such as:
• Home contents insurance
• Business calls
Mortgage costs and council tax are not included as these would be the same whether or not you were home based. There are also occasions when you can claim tax relief on equipment you have bought.
“We often talk to clients about the timing of buying things,” says Spencer, referring to an additional allowance for people who need to spend on assets such as computers. “If anyone is thinking of doing it in the next couple of years, you’ll be able to claim more than 100% relief on those purchases.”
The super deduction is for expenditure from 1 April 2021 until March 2023. It is specifically for qualifying plant and machinery. This can include:
Solar panels • Computer equipment and servers • Office chairs and desks, • Electric vehicle charge points • Refrigeration units • Compressors • Tractors and lorries
Read more from HM Treasury here.
What can you automate?
There are a lot of areas which you can now automate if you are having to do your own finances.
Personal Finances: Budget Planners to help automate personal expenses.
Receipt Capture: Apps can capture, read, and log information from your receipts and push the information into your cloud accounting software.
Invoices: Similarly to receipts, you can send the information from your email to your software. It is also possible to automate the invoices you create so you don’t keep going through a word processing document.
Cloud Accounting: You can automate a number of processes via the software: VAT returns, payroll, transfer of data for self- assessment and company accounts. They also include reporting facilities such as cash flow forecasting. Much of it is underpinned by different apps working together, which NSG Financials can advise you on.
This article appeared in issue 010 of The Homeworker magazine. Read the full issue here.
Find out more about NSG Financials Ltd: https://nsg.uk.com