From XU Magazine, 
Issue 31

Future-fit growth: using technology to optimise your practice management

Business intelligence is a key tool for informing decision-making in practices.

By combining analytics, data mining and visualisation with the right tools and infrastructure, practices can make more data-driven decisions.
This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
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Accountancy practice management software has come a long way. Today, features like automated billing and reconciliations can be easily integrated into the day-to-day workflows of UK practices. All solutions should be driven by a deep understanding of the practice’s needs, addressing the rapid changes in their environment.

However, it’s often hard to look beyond improving performance in day-to-day operations. Amid Brexit, the COVID-19 pandemic and other disruptions, accountancy practices and their clients are dealing with an unpredictable economic landscape. Future business planning can appear daunting.

However, technology can help accountancy practices and their clients to make informed business decisions and plan for the future. Leveraging technology in the right way gives practices closer control of performance tracking, greater efficiency, and deeper insights informed by business intelligence.

Tracking KPIs: real-time reporting

For several decades, business technology platforms have enabled practices to track performance metrics that they have customised. This highlights areas that qualify for improvement and underpins strategic planning. 

Contemporary technology makes setting up KPIs faster and easier for accountancy practices than ever before, which is vital today. The current business landscape demands that firms assess and amend KPIs more frequently, based on fresh market variables. KPIs such as client retention rate and business time-to-recovery have become increasingly prominent performance indicators in the past year. If clunky technology makes KPI management difficult, practices have less time and insight to plan future growth.

Ease of tracking and reporting on KPIs is also fundamental in minimising risk. For example, if a KPI is set to track and escalate debt filtered by overdue dates, the ability to easily set alerts and automatically generate reports is critical to practice performance management. 

Some practices are manually running monthly reports to measure KPIs. Others are running real-time reporting engines. This latter solution allows practices to review essential data at any time, covering both performance management and compliance requirements. They can do so remotely or on-premise. This means that firms can assess issues before they become problems, and thus act proactively. Real-time reporting is a true asset in building a future-fit practice.

Basic and advanced workflows

Practices using workflows can also introduce further efficiencies to drive future-fit growth.

Workflow technology gives businesses full transparency over repeated tasks within an accountancy practice. It also ensures that processes are performed in a consistent and efficient manner, as anyone can pick up an existing job and see what tasks have been completed and what is outstanding. Automating these workflows saves money and frees up time for employees to complete more valuable tasks.

Workflows usually display a visual representation of in-progress work. This may include who is doing what, potential issues, and work that will soon be overdue. A basic tax and accounting workflow may be a compliance-focused personal tax workflow. Reviewers can look at date-stamped deadline dates and see completed workflow steps. These could include:

  • information requested
  • data received
  • data entry complete
  • return received
  • return to HMRC
  • year complete

Internal workflows are common as well. Practices can integrate workflows with document management systems to manage approvals. This also creates efficiencies and time savings, particularly when workflows can reply and log emails directly.

Where will we see workflows go next?

Initiatives like Making Tax Digital have made workflows more important. It’s crucial that practices have complete visibility of which clients have filed their VAT and paid HMRC.

Widespread remote working has also accentuated the need for workflows. Practices are more dependent on practice management solutions because staff are less able to compare notes in person. They need the ability to log into a common user interface, including from afar.

Workflows are initially used to define a process. Once that process is being completed in a uniform way, it can be automated. Several practices are designing workflows to validate tax return data and send tax returns automatically to HMRC. Here’s how this workflow may look: 

1. A manager approves a personal tax return

2. The workflow sends the tax return and a personal letter electronically to the client

3. When the client digitally approves the tax return, the system marks it as approved

4. The tax return is automatically filed for the client on behalf of the practice

Workflows can interact with third-party products to create further efficiencies. They can also work with non-linear flowchart design and apply advanced automation.

This shows how workflows are advancing and becoming more ingrained in the day-to-day operations of accountancy practices. Even simple workflows can reap significant time and cost efficiencies. This makes them a powerful asset to the future-fit practice, supporting growth in the face of competition.

Business intelligence

Business intelligence is a key tool used to inform decision-making in many top professional services organisations, and particularly in many future-fit practices.

Most practices will be familiar with the term ‘business intelligence’ - researchers have been writing about it since the 1950s. Business intelligence vendors began emerging in the 1970s, with tools to help companies access and organise data. Today, business intelligence has grown up. It is driving future-fit growth at accountancy practices across the world. By combining analytics, data mining and visualisation with the right tools and infrastructure, practices can make more data-driven decisions.

Accountancy practices are now using business intelligence to:

  • analyse areas of potential profitability
  • ensure adequate cash reserves
  • manage chargeable and non-chargeable timesheets
  • forecast cash flow 
  • improve overall practice management

Centralising spreadsheet data

Picture the following scenario. An accountancy practice has 20-30 spreadsheets that circulate throughout the business. They are owned by various advisors who all input data. The manual work is time-intensive. There are issues with data quality and consistency.

Not all practices will have this experience. For some of them, manual reporting works sufficiently. However, others worry that they cannot stay relevant if their data is only run manually, whether on a weekly or monthly basis. Timely data is everything.

These practices often want to drill down into timely metrics pertaining to clients, partners and various other parties. Consequently, many want to move away from inconsistent and outdated reporting. They would rather move to using one set of dashboards across the practice, which everyone can see and interact with.

The power of business intelligence is its efficiency and robustness. In the scenario above, the practice could draw all the data from those 20-30 spreadsheets and load it into a business intelligence system. Unlike a traditional report, business intelligence is a ‘build once, build for everybody’ situation. Practices can apply routines to that data on an automated hourly basis. This eliminates the manual overhead of reporting.

Accountancy practices should consider the following questions: 

  • Do you spend lots of time in meetings organising spreadsheets before you even discuss growth plans for your practice?
  • Would it benefit you to aggregate data from multiple sources into one place and visualise it?
  • Would a system that automatically refreshed that data every hour, without manual intervention, save you time?
  • Could you introduce some more advanced strategy, such as gamification, to demonstrate performance visibility? 
  • Many accountancy practices may already be asking these questions. For those practices, a tech strategy involves continuous innovation - an expert solutions suite to accommodate future-fit needs.

About Wolters Kluwer Tax & Accounting UK

Wolters Kluwer Tax & Accounting UK combines almost two centuries of deep domain knowledge with advanced technology – for professional decision-making with confidence. Our aim is to help accountancy practices deliver an optimal service for their clients, while becoming more efficient and productive along the way. We serve accountancy practices of all sizes across the United Kingdom and are proud creators of the renowned CCH range of accounting products, alongside other solutions such as finsit, Twinfield and Basecone.

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