We are in a new phase for accounting software which many people will be familiar with, ‘cloud accounting’. A lot of traditional accountancy software companies are adding online capability to their platform so they can make sure they don’t miss out on the opportunities that this revolution presents.
So what is the benefit over software located on your hard drive or server? And what about small business owners who might not even use software at all? My spreadsheet is perfectly adequate for my needs, isn’t it?
In the online world, information is always available, assuming you have a wifi or data signal. And so it is with cloud accounting software. You can take your financial information with you and access it whenever you want. So that means you can invoice, make payments, do your payroll, reconcile your bank and plan your cashflow, all on the move. This should help get you closer to the numbers and ultimately closer to the things that are driving your business forward.
A common misconception is that data held at a third party is less secure than that held locally. But how often do you forget to back your data up? What if someone drops a cup of coffee on your laptop, would that cost you a lot of time (and money)? With cloud systems everything is always backed up automatically and storage is not an issue.
This is where the current systems are streets ahead of using a spreadsheet. Most of them will allow you to automatically bring in your bank transactions, which ensures your books are more accurate and complete. If you’ve ever struggled to reconcile your bank before this will be a thing of the past!
You can also invoice your customer from the system and then check who has or hasn’t paid, and perhaps automatically send them a polite email reminder. Once they have paid the system will recognise this and suggest the bank receipt is reconciled. And in the background, all the accounting is taken care of which should take the pain out of bookkeeping!
This is just one of many processes that are usually streamlined when using accounting software. However, the cloud computer developers are moving functionality forward much faster than desktop software. More about this in a later blog…
Having better access to information is a key benefit of accounting software, particularly when that information is up to date. By being on top of the bookkeeping, business owners can see quickly what is going well and not so well in their business. Most systems have standard reporting and some have advanced features such as editing of templates to provide rich reports which compare performance across periods or against budgets. But the main benefit of the cloud is being able to see information quickly so that decisions can be made.
You could argue that some of the benefits mentioned could reduce your reliance on a bookkeeper or accountant as the production of good quality reports is well within reach of someone with a basic knowledge of accounting. This may be true but it brings me to possibly the biggest opportunity for accountants of the cloud accounting revolution. By operating in the cloud it gives access remotely to someone who can help analyse the information from your system in a useful way and provide you with advice which can help improve your profits.
So if you are tempted to make the move to the cloud please get in touch with us to discuss how it could work for you.