More time to grow your business, less time on bookkeeping

What is about to bring accounting software and online banking together? The answer is cloud banking and it is about to revolutionise how we work together still further. For small businesses, a chore is being replaced by new opportunities to plan and grow.

Extra time to take good executive decisions

At Premier Accounts, we are moving rapidly towards replacing the drudgery of simply managing financial numbers. Like much of the accountancy industry, we will be replacing plain old-fashioned and time-consuming bookkeeping with an intelligent business forecasting and advisory service.

The change will be fundamental; the key is technology.

In future, technology will allow us to make maximum use of instantaneously available information about an individual company's business activity via a continuous stream of moment-by-moment automated bookkeeping data continuously updated, stored and downloaded from the cloud.

This is a natural progression that will switch the focus from dwelling on historic transactions to meaningful forward planning. The result will be a value-added consultancy tool.

One of the things that is making this possible - or to be correct is beginning to be made possible - is the advent of cloud banking.

The so-called challenger banks - Atom Bank, Monzo and Revolut - plus Second Payment Services Direct (PSD2), machine learning and the Government's Making Tax Digital (MTD) initiative, are making faster payments, BACS and direct debits possible by adding an extra software layer to the existing banking infrastructure.

Impact for SMEs

This includes adding a cloud banking function which will alter the way that ordinary small businesses handle their financial transactions and give instant access to their records.

At the heart of online banking is the cash ledger of debits and credits which represents the real flow of payments in and payments out. The new challenge is to make that not just real but even more real-time wherever you happen to be working.

The imported bank statements from High Street banks used in cloud accounting software are not only increasingly - and legally from an HMRC perspective - being used as a primary source of record keeping, they are also an enormous time saving for whoever is responsible for bookkeeping.

All that is needed is a contact, a VAT rate code and an accounting code category. Online banking and cloud accountancy are undeniably merging.

So what's in it for me?

Accessing both services from one vendor makes sense. Artificial intelligence will make bookkeeping as we know it today largely automated. This is a driver behind the MTD programme. However, it will put an extra quarterly load on businesses and accountants who still insist on doing their accounts via spreadsheets and desktop software.

But for those who make the leap, grasping the digital opportunity with a positive attitude will free up more time to use data for growing their businesses and running them efficiently.

For millennials, this is a natural step; a PwC report suggests that by 2020 millennials will form 50% of the workforce and be well on their way to becoming the next generation of small business owners.

Cloud banking pioneers

Monzo based in East London near the City is one of the leaders developing cloud banking that lives on smartphones. Balances will be updated instantly with intelligent notifications also sent instantly. One of Monzo's priorities is that the system must be easy to use.

In April 2017, Monzo was granted a full UK banking licence from the FCA (Financial Conduct Authority) and PRA (Prudential Regulation Authority). It is currently rolling out its free current accounts via Monzo Beta. The advantages offered include contactless prepaid MasterCard, real-time spending notification, zero fees internationally, free transfers to other Monzo users, and a clear, intelligent budgeting facility.

The company's priority list includes not only free UK current accounts, but also direct debits and standing orders, account number and sort codes, FSCS protection, plus quick and easy overdrafts.

Working towards making banking less 'obtuse, complex and opaque', while being transparent about what is happening to depositors' money at all times is the company's credo. Its focus, it says, is problem-solving rather than selling financial products.

We share that goal at Premier Accounts and want to help our clients to be able to do the same.