In today's fast-changing business world, although staying competitive requires embracing innovation, consequently, we find ourselves exploring the realm of Digital Accounting.

Benefits of Digital Accounting

Before we dive into the practical aspects, let's explore why transitioning to digital accounting is not just a trend but a strategic move that can benefit your business in many ways.

Onboarding

Initially, let's get to the specifics of making this transition successfully. The first step in our journey to cloud accounting is the critical phase of onboarding.

Migration

The migration phase marks a significant step in this process. It's where the rubber meets the road, and we leave our old accounting system behind for the world of digital accounting.

Ongoing Journey

Transitioning to digital accounting is not a one-time event; it's a journey. Moreover, after taking the initial steps, there's an ongoing journey that requires attention and dedication.

Embracing Cloud Accounting

As we wrap up our guide to digital accounting, we'll discuss the crucial role of cloud accounting in this transformation. Similarly, embracing the cloud is a key element in modernizing your financial operations.

Conclusion

In conclusion, cloud accounting is not just a technological upgrade; it's a strategic decision that can empower your business with efficiency, insights, and agility. By understanding the benefits, embracing the onboarding process, navigating the migration phase, and committing to an ongoing journey, you can position your business for a more prosperous future.

Nonetheless, don't just take our word for it. Dive deeper into the world of digital accounting by tuning in to our podcast. We've covered these topics and more in our recent episodes, offering in-depth insights and practical advice.

Listen to our podcast episodes for expert insights, tips, and real-world experiences. Subscribe today to stay updated with the latest trends and strategies in the world of finance and accounting.

Welcome to I Hate Numbers. I'm your host Mahmood and today I'm going to be diving deep into the art of making that move to digital accounting. Digital accounting as some people also refer to it is cloud accounting. In last week's episode, episode 185, I outlined the main benefits of why your business should move to the cloud.

This week is about what you need to do to make that migration, to make that move successfully and efficiently and effectively to digital accounting. In the words of Bill Gates, the first rule of any technology used in a business is that automation applied to efficient operations will magnify efficiency.

The second rule of any technology, that automation applied to any inefficient operation will magnify that inefficiency, and I don't want that for you. We're going to make sure that efficiency magnification happens for you and for your business.

You are listening to the I Hate Numbers Podcast with Mahmood Reza. The I Hate Numbers podcast mission is to help your business survive and thrive by you better understanding and connecting with your numbers. Number love and care is what it's about. Tune in every week. Now, here's your host, Mahmood Reza.

So let's kick things off. The first thing we're going to talk about is the first step in that journey - onboarding. Spoiler alert, I'll hold my hands up to this. My go-to platform for all things cloud accounting is Xero. Me and my firm, we're platinum partners with Xero accredited advisors, and we actually love it for ourselves, but more so for our clients.

It's intuitive, easy to use, plugs into a multiple of apps in the marketplace, easy for users to correct errors, intuitive, generates good positive reports here. It's a great ecosystem to plug in. However, whatever your platform of choice is, whatever your digital accounting software is that you decide to use,

the process and approach that I'm going to outline in this podcast remains quite similar. So I'm going to call it the onboarding step. Now imagine the onboarding process like preparing for a big long road trip. Let's use that Americanism here. Now hopefully you wouldn't just jump into your car and start driving.

You'd plan ahead. In a similar vein in the world of digital accounting, the preparation stage is absolutely crucial. Firstly, consider what is it you need from the system. Do you want to track specific categories? Think about the reports that you'll want to produce. Doesn't matter what you've got at the moment, what is it that's going to make your life easier?

What is it you need to know the answers to? It's a bit like deciding on your travel destinations. If you happen to be a retailer, you might want to trade sales by product category. That's your first destination on your accounting journey. Next, consider what applications or apps would be useful. Think of that like the pit stops that you might make on your long journey, your long road trip.

Maybe you're a product-based business, you've got an inventory management app, or you'd like to get one and you'd like to plug that in to fit in with your accounting system to help streamline your operations. If you're an e-commerce store, an app like Shopify integration can be your pit stop for managing those online sales seamlessly.

Xero, as an aside, by the way, is a cloud accounting platform that plugs into in excess of 300 plus apps and it's growing as part of your preparation. Your first step communication is absolutely vital. Make a decision as to how you're going to inform your team about the shift from what you're using at the moment to your new cloud accounting platform.

It could be an upgrade. It could be the first time you've embraced cloud accounting, but make sure your team are informed and they input into the process. It's like planning how you're going to keep everyone entertained on your road trip. Hopefully, I'm not overusing that analogy. Are you going to have team meetings?

And I don't mean teams as in Microsoft. Create an internal FAQ. Make sure everybody is on the same page, understands the rationale. You do not want any disruptions or detours on your migration, on your journey. Training and support is going to play a vital part at the beginning, during, and after. As much as you'd like your car in tip-top shape, make sure you're prepared and training and support of the right kind can do that for you.

Think of it this way, your employees need to know how to use the GPS, which is effectively your accounting software, effectively, to reach that planned destination like your financial goals. Now lastly, choose that appropriate date for migrating. When is the point that you are actually going to become live, up and running?

That could be typically at the end of the VAT quarter or a sales tax quarter if you’re based outside United Kingdom. Or it could be the end of your financial year. Over the many years that me and my team have helped people migrate to the cloud, we've had situations where they like to run a legacy system and a new system. So the ideal date doesn't become the definitive date, but choose what's best for you, when the time is there, when the capacity is there, and you're ready to make that transition.

And the transition, by the way, will be spread. It's very unlikely to be decided today to do it. And you actually migrate and get everything up and running on the same day. If you're a seasonal business it might make sense to migrate at the end of your busy season when things are a little bit calmer. But the key thing is there's always an ideal date but the date for doing it is sooner rather than later.

Now when you've had your stage of completion done it's time to move on to the next phase which is the actual migration. The migration is where things get a little bit more exciting. That blood temperature, that pulse races even more. And it's like the actual embarkation and leaving on your road trip.

Now imagine this as the moment that you start your engine in your car and you leave your old accounting system behind. Wave to it as you leave it. Data from your old system is going to be transferred to Xero or an alternative platform. Other platforms are applicable. Now critical information like your supplier and customer records can be carried over.

That's the point perhaps to think in terms of which customers will be transferred across. You may have some old customer data, old supplier data. So make that decision what you want to keep and make that decision what you want to take over. Now on that wonderful road trip you're making, you wouldn't want to leave your besties behind.

Similar, customer and supplier records are going to be essential for that business journey. Set up the bank accounts that you've got, and that can include things like PayPal. You can connect to Stripe, you can connect to other devices as well. Set up the financial details, like your financial year, your accounting year, and the contact information,

your bank accounts, or your financial fuel stations, and the contact information is the lifeline, just in case something goes awry. Finally, configure your account headings. Now this is predominantly a management tool as well as a compliance tool here. So think about you and your team, how do you want your headings displayed, how do you want them expressed, getting that chart of accounts done.

So remember if you've had challenges with your old system and you're not quite happy with account headings, then you can edit and decide what suits your organisation best, what suits your business best in terms of headings, descriptions, classifications and the like. It's your decision and your team's to decide how you want that information displayed.

Now, if you're into detailed financial reporting and who wouldn't be, you want clear account headings to help you navigate that financial landscape ahead. Now finally, now that you're up and running on your digital accounting platform, what about the ongoing journey? I'll set an interest here, folks.

Obviously, I'd love to be part of that digital accounting journey for you beyond the onboarding stage. Myself, my team, we're going to be your trusted GPS, even if you've got an existing accounts team, which is wonderful. Even if you've got existing advisors here, you may find that you want to tap into some expertise to help you on that journey.

And we are able to support your existing team. We can be there as an ongoing resource, or we can be there just to help you start the journey. You maybe just want to get some proficiency with Xero for example, get some initial training, get that initial input. Perhaps you want to upskill your finance team so they take charge.

You want to get a bit closer numbers, get a bit more familiar. Whichever way you look at it, think about making sure you've got the resources, the budget, to support you on that training and development journey. And if it's a new system you're migrating to, focus on the low-hanging fruit, the bread and butter, things to be getting you going.

And there's going to be loads more that you can tap into. Now finally folks, as a summation. The move to cloud accounting and the move to digital accounting as outlined in last week's episode 185 is incredible. For me, there's no real reason not to embrace cloud and digital accounting. My platform of choice is not the only one in the marketplace is Xero with an X, no Z.

The preparation, the migration and the continuation. Is a vital part of it and planning will save a lot of heartache and it will be beneficial for you in the short term, the medium term and certainly the long term. Once you've got going on that journey, once you've got that situation where you're accessing information that's going to help you with decision making, get an insight into the future, understand where your money is being spent, understand what products and services are making you money

and sadly the ones that are losing your money. Once you get that information on a nice easy report, the ease of invoicing, all of it, you'll wonder why it took you so long to connect to the cloud. So folks, I hope you found this week's podcast useful. Let me know what you think. Are you a cloud person? Are you thinking about getting on the cloud?

And I should have added by the way folks, there's a little Brucey bonus. There's a link in the show notes to a free guide we have on migrating to cloud accounting, which outlines the history of cloud accounting, what you need to think about, the benefits and how you make that step. Check out the show notes for the link to your free guide, but until next week, happy accounting.

We hope you enjoyed this episode and appreciate you taking the time to listen to the show. We hope you got some value. If you did, then we'd love it if you shared the episode. We look forward to you joining us next week for another I Hate Numbers episode.