As new technologies develop and bring about the digital transformation of industries, we have witnessed how these can bring about greater revenue and competitiveness. And it has become critical that small businesses jump on the bandwagon to reap the benefits of technology and become more competitive in todayâ€™s ever-changing business landscape.
Yet, many businesses still use Excel spreadsheets and even handwritten ledgers to record, balance, and reconcile accounts. This especially tends to be the case with SMEs.
SMEs are widely hailed as the backbone of economies, with the ability to contribute more to national GDP should they leverage technology to increase efficiency, improve cash flow, and enable business expansion. Most notably, the cost of cloud-based solutions has decreased over the years, making them more accessible than ever before to solo entrepreneurs and SMEs.
Thereâ€™s an immense opportunity in Asia to revolutionise bookkeeping and accounting tools and processes by migrating to the cloud. And we have taken the chance to deep-dive into our partnersâ€™ cloud journey at the Roadshow event in Hong Kong and Singapore on 20 and 23 November respectively.
Challenges to cloud adoption
Typical of any organisational changes, there are bound to be challenges and it is essential that advisors and business owners are aware of them in order to mitigate potential issues that can arise from the migration process and achieve success in the cloud.
Thereâ€™s plenty of hesitation surrounding digital adoption in the accounting industry.
So the first step to digitalisation for a business is to get buy-in not just from top management, but from employees as well. Itâ€™s important that employees are brought onboard early on and be given the support they need during the migration and adoption process.
For a company thatâ€™s been using the same software, spreadsheets, and physical books for years, it can be a daunting task to migrate all their data and workflows onto a new system. Rest assured, Xero will be there with you every step of the way. Here is some information to get you started.
An essential part of any migration journey is employee training. â€œWe do introductory training sessions when we first onboard clients onto the cloud and clients find it helpful when navigating the platform,â€� shared Kuen Liu of Athenasia during the panel discussion at Xero Roadshow Hong Kong.
Not only does it help to get the whole team onboard, it will also boost their confidence when working with the new cloud platform and help to drive up productivity for the company.
Training takes up employeesâ€™ precious time away from the current day-to-day job but the mid- to long-term benefits are immense and totally worth it!
Employees can visit Xero U Education to get trained on Xero through a series of live and online courses and webinars. Partner firms can also opt to get Xero-certified to demonstrate their expertise with Xero platform.
Juliet Tay from of Pivotal Business Solutions in Singapore recommended this tip: â€œWe prefer to do one-on-one trainings so we can answer [clientsâ€™] questions and have more personalised interactions.â€�
Benefits of moving to the cloud
Greater control and visibility on financial status
Partner firms and small businesses that have moved to the cloud have discovered greater visibility as a result of bank feed APIs. Here, secure bank integrations enable the flow of real-time data from their banks so SMEs can get a clear view of the businessâ€™ financial position to make more informed decisions. This also allows the partners to offer more strategic advice to SMEs.
App integrations also help increase financial visibility and control. â€œUsing apps within the Xero app ecosystem allows us to assign profit margin for each project,â€� shared Rex Leung of Linkers CPA at the Xero Roadshow Hong Kong.
Increased productivity and decreased costs
Digital tools like cloud-based solutions enable SMEs and partners to save cost by reducing manpower, software and hardware costs, and employee time spent on manual tasks. In fact, according to the World Economic Forum, cloud adoption has been shown to lead to increased IT cost savings of from 25% to 50%. It can also increase revenueâ€”one of our research projects revealed that digitally proficient firms tend to achieve more revenue per employee.
With a cloud-based platform, itâ€™s easier to automate tasks and even connect different apps and documents to the accounting platform. One example is how integrating bank feeds with Xeroâ€™s platform allows for the automation of banking reconciliation for SMEs and also the development of an app ecosystem to support SMEsâ€™ diversified business needs ranging from CRM and HRM to supply chain management.
By digitising and automating manual tasks, employees can pour their energy into higher-value work that generates more revenue. In fact, some of our partner firms have found themselves moving into financial controller roles after using Xero to automate and streamline their bookkeeping services.
Companies can also control their spending when using cloud-based software by paying only for the features they use and the number of users. This is the opposite of the one-size-fits-all solutions typically offered by legacy software.
Better cash flow management
One of the key challenges faced by SMEs is late payments. To tackle this, Xero has an online invoicing feature that automates the invoicing function, allows for integrations of different payment gateways (such as Paypal or Stripe) and sends automated reminders, making it easier for clients to pay. On average, SMEs that use online invoicing and provide more payment options get paid faster.
According to our recent survey, SMEs who use Xero are able to shorten the number of days in between invoicing and getting paid (2015-2017), from 42 days to 32 days in Hong Kong, and from 43 to 30 days in Singapore. The cash flow cycle is also much shorter for Xero customers as compared to other SMEs (6% late payment vs 24%). That is effectively plugging the cash flow gap for small businesses.
Improved data security
Cloud-based solutions eliminate the need to download software onto computers. This allows companies to control who can access which accounts, and when. With individual profiles and unique access keys, cloud-based accounting systems can track usersâ€™ activities, providing businesses a layer of security.
Your data is also much safer in the cloud than on your computer. Your computer can be stolen or corrupted quite easily, but cloud companies spend millions on systems and experts to protect your data. Learn more about Xeroâ€™s secure data protection.
Client retention through greater value-added services
For Xero Partners, a successful migration to the cloud strengthens relationships with clients and allows them to offer high-level services, such as analysis and advisory. â€œDigitalisation of accounting really helps us to stay relevant. Moving to the cloud allows us to provide higher level advisory services to our clients instead of just giving them the financial statements,â€� said Kelvin Loh of Corporate Back Office, a panelist at the Xero Roadshow Singapore.
Moving to the cloud also speeds up processes like closing and helps facilitate more flexible work arrangements, observed Suan Wee Tan of Corporate Accounting Services.
Towards a digital-first future
Digitalising a companyâ€™s processes and moving them to the cloud may sound tedious and expensive, but it doesnâ€™t have to be. With proper planning, as well as guidance from your platform provider, you can switch to the cloud with ease, and get your online accounting system set up and running in no time.