The world of outsourced accounting is changing rapidly
As providers of outsourced accounting to growing technology companies, we are seeing an increase in the number of exciting and innovative AccountingTech startups seeking our services to help them to scale. This sector includes online book-keeping, expense management, planning and tax software solutions.
With the investment community readily investing in UK AccountTech companies (like the ones below), the disruption of the traditional finance and accounting services and software market is well underway.
- Tax Scouts, who make personal tax returns easier, received £1.5M of Venture Capital Seed funding in January 2019
- Red Flag, providers of an automated invoicing platform, received £1.75M of Angel Funding in February 2019
- Fluidly, who are helping businesses to rethink how they plan and manage cash flow, were awarded a £5.6M grant from the Capabilities and Innovation Fund in June 2019
- Expend, a real-time expenses solution obtained £1.5M in Equity Crowdfunding in July 2019
Related Article: What’s the Right Investment Route for the Growth Potential Startup?
A business needs to be operationally well run to scale
While AccountingTech unquestionably offers enormous potential for efficiency and insight, a business needs to be operationally well run to scale. This requires more than just technology, it involves finance and accounting experience and expertise too; support from an outsourced accounting solutions provider like Isosceles Finance who understands what it takes to scale.
- The selection of the accounting system and the apps require knowledge to ensure the chosen technology has sufficient functionality, scalability, ease of use and flexibility to support the business now and as it grows.
- The system implementation needs proper planning to ensure it sits on top of appropriate and robust processes and controls that can scale with you. If you automate a mess, all you get is an automated mess.
- State-of-the-art technology does not mitigate the risks of a cyber-attack or a GDPR breach. Having more technology in the public cloud arguably increases the risk of cyber-attacks. Beating cybercriminals relies as much on appropriate, consistent processes and procedures than simply the underlying technology. Cybercriminals are becoming increasingly daring and innovative. They could gain access to the unprotected business and could extract and reuse sensitive data, or gain access to your workflow, mimic your signoff process and redirect funds.
- Although many tasks can now be automated with sophisticated apps, some data still needs to be input manually.
- While the preparation of financial statements is simple and straightforward, the data itself has to be manually checked for sense, accuracy and completeness; garbage in, garbage out.
- The dashboard requires careful configuration to ensure you set and monitor KPIs relevant to your particular business; otherwise, you will drown in statistics and pie charts.
- The information from your dashboard and reporting still needs professional interpretation. What does this mean for the business? Should corrections to your course be made?
- The ever-increasing levels of statutory and regulatory compliance need to be understood and complied with appropriately, not in some blind process.
- The year-end statutory accounts may be the only public statement that your business makes on the state of its finances; this needs to be accurate and thoughtfully compiled.
Related Article: Will Accounting AI Transform the Finance Function?
Outsourced Accounting solution providers tend to be early adopters of AccountingTech
At Isosceles, we pride ourselves in fully embracing AccountingTech in both our traditional outsourced accounting solution and our newly launched iCount solution (aimed at early-stage and pre-funding technology startups). We combine the best of accounting tech and accounting experience.
Related Article: Making Tax Digital (MTD)