March 2018: News you won’t want to miss!
Here’s another edition of the ApprovalMax monthly roundup of the best articles, and this time we’re looking at what has been published in March 2018. As we emerge into springtime, the accounting and finance world is busier than ever. But there’s still time to keep updated with the latest news, insights, and opinions from the industry’s best writers.
This month, we look at the role of fintechs in capital markets, ways to boost business efficiency, accounting at nonprofits, open banking, and more.
A caveat: These are the opinions of the writers themselves. We don’t always agree with every argument presented in these articles, but we do think you’ll find the stories interesting!
1. Fintechs Are More Likely to Complement Rather Than Disrupt Capital Markets
In this article by Tom Groenfeldt for Forbes, he talks about how finance technology specialists have expanded their services to the world of capital market. Prior to this, their expertise was relegated mostly on retail banking and payment or financial services.
He also cited a recent report published by McKinsey & Company – Fintech Decoded: The Capital Markets Infrastructure Opportunity – which shows how fintech in capital markets had outgrown other areas of financial services. Whilst corporate banking and payments had grown, the capital market has seen 277 % in growth.
According to Groenfeldt, he points this growth towards the fact that the incumbents in the capital market infrastructure look at fintechs as partners, not disrupters. Knowing the CMIP firms allot a huge chunk of their expenditures to IT, they still turn to fintechs to equip them with innovation and technological firepower.
2. 4 Ways to Boost Your Business by Cutting Costs
Monica Zent writes this insightful piece for Entrepreneur, wherein she discusses in detail about ways which would help improve business processes whilst cutting costs. She believes that there is a lot of fat to trim for businesses to maximise efficiency without necessarily spending more. It is all about identifying areas that are inefficient and providing alternatives.
She has outlined four ways that would enable businesses to cut down on their operational costs. The first one is to discover where your inefficiencies lie. Process is crucial to any business in any industry. If you can introduce a process or improve your existing one, your operational costs will become more efficient in the long run. This is where she introduces the idea of automation. However, Zent insists on a thorough evaluation of current processes first; otherwise, automation will be ineffective.
The third suggestion by Zent is to rethink how you market your message. Use tools such as polls in order to benchmark your products or services, as well as get insight into your customer’s minds. You can change your processes and marketing approach accordingly. And finally, she also tackles the business’ spending history. She even recommends scrutinizing that spend history closely so you can discover opportunities to save.
3. What Nonprofits Need to Know About Accounting
Accounting for a nonprofit organisation can be extremely tricky. The lack of a fixed funding source, the stringent tax requirements, and the lack of accounting staff can add to the problem. Hence, Katharine Paljug interviewed tax and accounting professionals to provide a guideline for nonprofit organisations to handle their accounting processes.
The first tip that accounting professionals share is to make accounting a priority. Even with all of the variables, it is important to have a dedicated accountant that will manage the organisation’s finances. These professionals also recommend staying abreast with the current tax codes. This is where a professional accountant can help. Even when you’re working with volunteers, you will still have to include it in your tax report. Hence, accountants can provide you with valuable guidance on how to track the services and time provided for by volunteers.
Paljug also notes donor activity for nonprofit organisations. Pledges from new and existing donors should be managed by an accounting professional, according to her interviewees. Finally, monitoring the functional expenses and funding sources should be looked into more closely. The taxes, donations, and fund allocations are all an integral part of the accounting system for nonprofit organisations.
4. Defining a Path for Future Accounting Business Success
Mark Gilbert writes this piece for Accounting Web wherein he provides great insight as to how automated technology is transforming the accounting industry. While some might look at technological solutions as replacing accounting professionals, he refuses to believe so. In fact, he sees an opportunity for accounting professionals and firms to exploit these technologies for more business success.
In particular, Gilbert points out two ways to exploit technology for business success:
- Choosing the right accounting technology
- Using the technology to add more valued services to your clients
He starts by suggesting that you evaluate your goals before investing on a new technology. Make sure that the solutions offered is aligned with your goals, and if current tools are no longer providing the solutions offered. You must showcase expertise on how to exploit the technology to bring higher efficiency and results, and serve as the voice of expertise in improving processes and facilitating business growth.
5. Open Banking: An Interview with Xero
Lucy Skoulding wrote this interview article for Accountancy Age, featuring Xero’s Banking Fintech and Ecosystem Director, Edward Berks. To start off the interview, Berks explains his role at Xero, which is to manage the strategic partnerships that they have with fintechs, banks, and other application systems. This role has enabled him to work directly with accountants so he can have a good understanding of how they use the technology provided by Xero in terms of their own business needs (and for their client’s too).
He goes on to discuss the concept of “open banking”, which is essentially driven by the Competition & Markets Authority in the UK. This will identify a set of standards to make it easier for retail customers to get data shared and facilitate easier payments. He believes that open banking will impact the accounting industry, because it serves both companies and individuals. Thus, it also calls for accountants to increase their knowledge on open banking, especially since customers will turn to them for advice on the matter.
Finally, Berks talks about how they have gradually integrated open banking with the services of Xero. They have partnered with many other financial firms and banks to streamline payments and manage finances better – especially with small businesses that are still improving on their cash flow.
6. How Xero Helped a Ridiculously Young Entrepreneur Grow His Cloud Accounting Firm
This article by Grant Hutchinson examines the journey of a young entrepreneur who now runs his own cloud-based accounting firm, Bookkeeper360. The young man in question is Nick Pasquarosa. At 26, he owns a successful company and attributes a lot to Xero.
While still in college, Pasquarosa worked as a part-time bookkeeper in Long Island. During his stint as a bookkeeper, he saw a gap in the financial capabilities of the clients that he worked with. He believed in the value of cloud-based accounting and its ability to facilitate real-time collaboration for accountants and business owners. He decided to take the leap from being a freelance accountant to building his own cloud accounting firm.
While he saw a gap and wanted to exploit it as a business opportunity, Pasquarosa’s main goal was to inform his clients about how to leverage technology in all aspects of business, not just in accounting. This is when he was introduced to Xero and saw the potential that this accounting technology could offer his firm. Because of his ability to leverage Xero, he was able to service clients with six-figure IT budgets.
Have we missed any great articles? Please do let us know, and if you’d like to submit your article for consideration, get in touch with firstname.lastname@example.org.