The following case study will focus on the positive benefits that Cloud accounting has had for our trade clients. While the below is not an actual client of ours, he represents a combination of issues that our clients have experienced. We resolved all these issues through the use of Cloud accounting software.

Trade Case Study

First let’s set the scene for this business. The director, Alan, was finding that admin was taking up more of his time than actually working on what he does best – the joinery side of the business.

1. Alan was manually entering his own receipts into a spreadsheet for his accountant. This took anywhere between 30 minutes and over an hour each night.
2. Alan was creating each invoice from an Excel template and manually numbering these. This involved referring to previous invoices for numbering and his past purchases in a huge folder to re-bill his clients for materials.
3. There was also an issue with the invoicing. While Alan included a mark-up, he didn’t have a firm grasp on the time that his team were actually spending on each job and he therefore had to guestimate labour costs. In addition to this, Alan’s invoices were lagging behind. His invoices wouldn’t reach clients until weeks or even a few months after the job was completed.
4. His payroll was done via manually completed timesheets from his team that came in at the end of each month. He then tallied these in a spreadsheet which he sent to his accountant for the payslips.
5. For a filing system Alan had a series of folders and lever arch files; containing things like unpaid purchases, paid purchases, prior months etc. There were two main problems with this system. Firstly, he had to flick through it all to find anything. Secondly, it relied entirely on Alan to move paper between folders the instant he had paid items or risk having items in the wrong folders.
6. Lastly Alan was also having some cashflow issues as he didn’t have a clear view of what debts were outstanding to him without keeping track of a complicated spreadsheet which required daily updating and then follow up with clients.

In short, Alan was spending far too much time doing the admin for his business. As a result of this, and how inefficient the admin process was, his business was slowly showing the signs of poor cashflow and greatly reduced profits.

What next?

When Alan initially came to see us we had a free consultation meeting with him to feel out if we were the right fit for each other. Here we were able to discuss the problems he saw in his business and with his current accountant. Not all of the above was identified immediately as until a proper system is in place many of the issues can be invisible.

After this first meeting, and Alan deciding he wanted to come on board, we went through our setup process with him. This included another hour meeting to get all the paperwork signed off and discuss how we would be moving forward. At this meeting, we decided that using an online bookkeeping solution would greatly aid Alan with his admin. At this second meeting we arranged a time where one of our team could either go out to Alan or he could come back to us and sit through a training session on this Cloud package.

How did Cloud accounting help Alan?

By simply making the switch to using a Cloud package and incorporating a couple of add-on apps, Alan was instantly able to rectify points 1,2,4 and 5 which we had identified at our initial meetings:

1.We introduced Alan to Receipt Bank and trained him how to use it. This allows him to take pictures of his receipts and then uses AI (OCR software) to read them for him. The end result of this is that Alan can take a picture of a receipt and it will land in an inbox for him with the supplier, price, VAT, date etc all filled in. All he now needs to do is categorise the receipt to materials, meals, fuel etc and click publish – done!

2. Alan can now create an invoice from his computer or phone from anywhere. This invoice is already in his desired and customised format and includes his logos and accreditations. It also automatically numbers itself by looking at the previous invoice. He also no longer has to check that he hasn’t duplicated the number before creating one.

Alan now also marks his receipts as ‘billable’ when they come in. This means that he can choose them from a side menu to add them to his invoice. This saves him from having to go back to his purchases and work out which items were for each job.

4. We set Alan up with an app called TSheets which allows his team to fill in their timesheets on their phones each day. They can then submit them digitally to us so we can produce the payroll. This means Alan no longer needs to collate timesheets and can keep an eye on his team, day to day.  Alan was therefore able to cost his labour which we discussed with him.

5. By switching to the Cloud Alan made a vast positive change to his process of keeping his paperwork. He went from keeping everything in folders to keeping everything online. This not only meant he could find documents by typing into a search box but also that he no longer needed to keep the paper copies of fresh receipts.  We also had instant access to everything without needing to transport his files for each year. This is because Receipt Bank stores the image automatically

The above process allowed us to quickly correct point 3 above as well. Alan introduced an easy to use timesheet system on his teams phone. This meant that Alan could see how much time each of his jobs took and then bill his client’s appropriately. This instantly made his margin far more accurate and ensured that he billed his clients at a profitable level.

Lastly, after we had been working with Alan for a couple of months on the Cloud we were able to see that his debtors began to tidy themselves up. This is because Alan had a clear and accurate picture of who was due money to him. Alan was able to create invoices easily, meaning that he could put invoices out much quicker than before. Without having to take any other action point 6 was corrected by itself.

There are obviously many other benefits Alan received such as real time accounting, project costing and improved business decisions. Within a month of taking Alan on we had solved all of the problems facing his business. These directly stemmed from having an outdated and inefficient bookkeeping system. We were able to free up Alan’s day to go out and do what he loves and free up his evenings to spend with family and friends.

As always, if you have any questions about this post, or anything else, please contact us.