Late last year, Accounts + Legal pitched to KIKO, an Italian cosmetics brand with a 2016 turnover of 600 million euros to take on the accounting function for their UK business .
They pitched, surprisingly, with Xero, which is optimised more for SME clients than larger enterprises. However, by thinking creatively about the capacities of Xero’s software and using Receipt Bank to minimise the manual work that would otherwise be overwhelming, they managed to win the pitch.
LOOKING OUT FOR THE LITTLE GUYS
Accounts + Legal is a London-based small business accountant with a focus on working closely with SMEs to provide more than just tax returns. They provide a complete accounting experience for clients, with services such as forecasting, business strategy and exit planning. Their blog is also one to add to your reading list – Chris Conway offers up some great insights for accountants and SMEs alike.
Chris, Managing Director of Accounts + Legal, came to the firm with experience of working with bigger companies. “Previously my clients only talked in millions,” he says, “but here it’s more typically in thousands.” Working with smaller businesses allows him to work closer with his clients: “In my old positions, fewer companies were owner managed, but here it’s almost exclusively entrepreneurs and they require a broad range of support from their accountant.”
Working closely with these entrepreneurs is “fast paced and exciting; it’s the best exposure for new accountants joining the profession,” explains Chris.
“RECEIPT BANK IS DEAD EASY”
Chris joined in November 2015, when the firm had just dipped a toe into cloud accounting. Chris could see cloud was the future and so, after tax season, Accounts + Legal migrated all their clients over to Xero using the Move My Books service. Once they made the move, they started thinking about apps.
Some of their clients were already on Receipt Bank, and the team at Xero also recommended using us. They gave it a try, and immediately loved the consumer-friendly platform: the easy-to-use interface means that clients can submit items when and where it suits them, with minimal onboarding needed from the accountant. “Receipt Bank is dead easy,” says Chris, “it’s the best option for efficiency and speed of reporting, allowing you to unlock financial insights fast.”
“The big penny drop moment for us,” he says, “was when we took on a sizeable, paper-based new client. We were doing their first VAT return, and two archive boxes of lever arch files arrived in the office – over 1,200 invoices and receipts.”
Chris set a junior to work snapping pictures of the piles of paperwork with the Receipt Bank mobile app. It took a while due to the sheer volume of receipts and invoices, but the data was processed overnight and ready to review the next day. “On that project alone, we cut our time cost in half,” says Chris. “It’s especially useful now that we’re on the ‘all-you-can-eat’ package.”
THE BIG PITCH
“Kiko got in touch to see if we could help improve their reporting processes and speed up management accounts production,” Chris wrote in his own blog post about the pitch. The team was unsure of what to do as their go-to software Xero is optimised for small to medium businesses and Kiko is a multi-million euro business with 50 stores UK-wide. They even debated the pros and cons of using the software right in front of the prospective client. Eventually, they settled on a solution: treating each store’s monthly transactions as one transaction to put into Xero.
There was also the not-so-small issue of 30,000 purchases a year, for which Receipt Bank was an obvious solution, as it makes possible the management of such a high volume of items with a smaller team. Without Receipt Bank, Chris thinks that “it would have been possible, but would have taken a lot more man-power, typing in all the data. We would also only make progress during the working day, so not only did Receipt Bank reduce costs but it also works 24/7 on the data.”
“Receipt Bank is so easy – clients know best what code or department to apply to items,” adds Chris. “They can also manage permissions with different levels of the team for accurate categorisation and coding.” Winning these sorts of clients is now a possibility, without having to hire a team of interns to type numbers into a spreadsheet all day.
A NEW BREED OF FIRM
Chris agrees that it’s also changed the type of person that can and should be an accountant. “Historically, a depth of knowledge of the legislation and manpower would get a firm by. Increasingly though, technology is reducing the manpower requirement and reducing costs as a result. Successful firms know how to deploy tech to their own and their clients’ advantage, and then focus on the business advisory services that entrepreneurs really value.”
To those still skeptical of the cloud accounting revolution, he says “I struggle to see why any SME without an internal accounts team, and even those that do, would not benefit from cloud accounting.”
The data is backed up and software updated immediately without taking any action yourself. The cost is spread too, so there is no substantial cash outflow to get started. You are right to proceed with caution if this is not your area, but I highly recommend working with an experienced adviser so you don’t miss out on an opportunity to improve your processes and reduce your costs.