Xero Insight: How cloud technology can help you keep on top of your business finances
Donna Torres is an international leader in small business and is responsible for growing the Xero subscriber base throughout Europe, Middle East & Africa. She is passionate about helping SMEs to succeed and is focussed on supporting them through the challenges they face today with the latest technology.
Cloud technology is a very effective tool that can save small businesses time and resources. It delivers servers, storage, databases, networking, software, analytics and intelligence over the internet. You can tailor your cloud usage and subscriptions to suit your business’ needs and budget, delivering fast and flexible results.
When it comes to finances, cloud-based technology can save businesses money and help them manage finances more effectively in a number of different ways.
By taking certain business operations into the cloud, businesses can save a lot of money on setting up a costly server and storage system on their premises. Logistical costs like setting up a server can wipe out a lot of business’ budgets when they’re starting out - it will also cut down ongoing repair and maintenance costs. Enabling the cloud helps save capital for other aspects of the business that need your attention and TLC.
Real time data
Cloud technology can give business owners an accurate and up to date look at data like cash flow, to the minute. This can also be accessed remotely and from any device. This prevents financial mistakes and going into overdraft - as the business is aware of how much cash they have at their disposal at any given time.
Cloud accounting platforms like Xero will help you track and report on key business metrics in real-time. These include accounts receivables, operating margins and inventory turnover. Having a good handle on these business metrics will help you manage your cash like a pro – and take advantage of new opportunities.
Team time and resources can be one of the most costly aspects of running a business. Cloud technology unlocks the power of automation. Employees can spend less time on time consuming tasks like bookkeeping, logging expenses or invoicing. For example, businesses can now send an invoice as soon as it’s ready, see when it’s been opened and viewed, and send automated reminder notices.
Cloud technology also makes sharing large files much easier as all data is backed up using the internet. This means large assets can be shared with a simple link and with no delay.
This gives employees more time to spend on creative thinking and problem solving for your business, leading to quicker growth and expansion, and, let’s face it - happier employees!
The cloud is entirely scalable so businesses only pay for the exact technology and services they need. For example, you may only initially want cloud accounting, like Xero, and a simple storage solution when you’re starting. You can then upscale your cloud usage as your business grows.
Xero currently has 800 apps on its ecosystem which integrate with its software, featuring innovative technology for every industry. For example, farmers could use Xero’s integration with Farmflo to improve the speed and accuracy of keeping their farm records for reporting and compliance. Retailers can access seamless point of sale and inventory keeping with Vend, which feeds into Xero to give you an accurate look at business performance.
Cloud technology is a great equaliser. Previously, small businesses found it difficult to compete with larger companies and competitors who could afford more expensive and elaborate server systems. Now, even the smallest of companies have access to cutting edge technology. Having the latest technological advances makes your business much more attractive to potential investors, making access to investment and capital much easier.
Access to further innovations
The beauty of the cloud is that it is constantly being updated and improved without its users being hassled to update their software. This all happens in real time without bothering the businesses who are trying to get on with the day to day running of a company.
Cloud technology lets users tap into innovations like Artificial Intelligence, data analytics and machine learning easily. These tools allow a business to learn faster about key areas; from competitors to customers to what’s driving sales.
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Some small business owners may be wary of the cloud when it comes to data protection. However, it is actually one of the safest places to keep your data. If someone were to steal your laptop, they would have access to all the information on your hard drive. The cloud enables password protection for your business’ data so you can also easily control who has access to what information.
The cost of losing data can be huge, not to mention all of the team time that would have to go in to replacing and recovering this information. By allowing the cloud to back up and protect all of this for you, your business won’t have to spend money on recovering anything that might be lost.
For businesses looking to grow, stay financially healthy and remain innovative in a competitive environment - cloud technology is an invaluable tool that helps level the playing field and save time for smaller businesses.
FIVE things fintechs must do to keep investors onboard
New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.
Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?
The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.
Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.
Equal access to financial wellness education
Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.
The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.
Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.
For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.
Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.
The rise of AI-Powered Advice
Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?
Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs.
Focus on financial mental health
New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.
It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.
Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.
Gamification for good
The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.
Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.
Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.
The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.