Is your Practice Maximising the Benefits of Digital Accounting?

Original content provided by BDO UK.

With ongoing changes in general practice it continues to be vitally important for practices to have a robust and timely financial reporting system in place.

Not only has this ensured they are prepared for further Making Tax Digital Requirements; it is also providing them with better real time accounting information and systems that have greater budgeting and reporting capabilities. Digital Accounting through ways of cloud-based management systems, automated processes and detailed analytics provided by these systems the status of accountants has been elevated by removing the ways of traditional accounting through automation.

We can help you transition to digital accounting software to make sure you get the most out of these systems for the efficient management of your practice.

What are the efficiency benefits of digital accounting?

Making use of a digital accounting system enables many aspects of the practice’s financial management to be made more efficient, from automated rules to cut down on manual data entry to quick and easy completion and submission of VAT returns. These efficiencies in turn free up time for practice staff to focus on running a sustainable business.

What financial information can be obtained from a digital accounting system?

The following list details just some of the financial information that can be easily accessible when using a digital accounting system:

• Income and expenditure profile for any set period of time, with comparison to previous periods
• A snapshot of amounts owed by third parties to the practice, and vice versa, at any given point in time
• Real-time information on the practice’s bank balances using automated bank feeds
• Budgeted income and expenditure figures for the current financial year
• Information regarding both historic cashflow trends and predicted future cashflow based on available data.

What value can this provide to practices?

Having real-time financial information available throughout the year can give rise to a wide variety of benefits to practices and provide valuable insights to assist with decision making and change management:

• Income and expenditure comparisons can help to highlight any unexpected cost increases or income reductions, so that proposed solutions can be discussed, and action can be taken swiftly. If a budget is put in place, current profit levels can be monitored against this and any variances can be identified promptly
• Details of amounts owed to the practice by third parties can be used to ensure tight credit controls are in place and outstanding monies are received in a timely manner
• Bank feed information and cashflow tools can be used to monitor practice cashflow and promptly identify any remedial actions that may be required. This information can also be used to assess the reasonableness of partner drawings levels, practice working capital requirements and the timing of year end current account distributions
• Predicted future cashflow information can be used to plan upcoming practice spending requirements and determine whether any external funding may be required for specific projects.

In addition to the above, all financial information can be easily tailored to meet your needs. Management accounts, cashflow forecasts and budgeting information can all be produced from a digital accounting system and can also aid the efficient preparation of the year-end financial accounts.

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