Are you a small business owner and looking to take your success to the next level? Have you considered the power of cloud accounting?
Cloud accounting can help simplify complicated tasks, such as financial record keeping and budgeting, giving you a comprehensive picture of your business activities that can increase efficiency, boost productivity and ultimately lead to more effective decision-making in support of your bottom line.
In this blog post, we'll discuss how cloud accounting technology is revolutionising the way small business owners access information for better results.
With all its benefits – from the ease of use to real-time data updates – Read on for an overview of what cloud accounting is and how it can be used as part of a successful strategy for your small business!
Let's get started!
What Is This Thing Called The Cloud?
Consider this the next time you do your banking online. When you log in to your bank account, you are utilising the cloud to access your financial information.
The cloud enables users to access information and software online at any time, from any location, and via any gadget. As a result, your desktop or portable hard drive is no longer the most important component of your computer or laptop.
What Is Cloud Accounting?
When you use cloud accounting, all of your company's books are stored in an online repository. This includes keeping records of your assets and liabilities, as well as your revenue and expenses.
Because the data is protected, similar to how a bank's information is, only individuals who have the login details can access the information.
In the early 2000s, companies began using cloud accounting software, commonly referred to as online accounting software.
This type of software is stored in the cloud. The majority of systems come packaged with a set of tools for quoting, invoicing, and handling various invoices.
Benefits of Cloud-Based Accounting Tools for Small-Business Owners
1. Enable smart organisation for a distributed workforce
Because the accounting data that is saved in the cloud can be uploaded to or viewed from anywhere, members of the team are able to rapidly and conveniently finish their tasks, irrespective of where they are physically located.
Whether a sales representative has to add expense receipts or a project manager wants to examine an invoice for a provider, having cloud-based technology in place tends to make it as simple as snapping a photograph of a file or looking by supplier, amount, or date to organise and access crucial data.
This is true whether the sales representative needs to add the receipts or the project manager wants to examine the invoice.
2. Maintain relationships and easily verify discrepancies
The performance of many smaller companies is directly correlated to the quality of their relationships with their suppliers and distributors. When a supplier or distributor inquires about why a bill is not being paid, proprietors of small businesses that use cloud-based technologies can quickly search for outstanding invoices.
The team's employees are able to discover a bill, determine whether it was overlooked, and pay for it promptly with the use of cloud computing technologies, which preserves the relationship with the supplier.
3. Use a broader suite of secure apps
Software hosted on the cloud, like QuickBooks Online, not only makes it possible to access data and files using any gadget but they also connect with other cloud-based software and services.
As long as a small company begins utilising one cloud-based accounting technology, it is simple to collect and exploit information across a wide range of systems, hence reducing the amount of time spent on manually inputting information and saving the company time overall.
Not out of a desire to spend time managing paperwork, people who establish their own small enterprises are doing so because they are passionate about what they do.
Owners of small companies can enhance their overall operational effectiveness by migrating their traditional accounting procedures to cloud-based systems, which also allows them to decrease the amount of time they spend managing data.
How Cloud Accounting Is Helping Small Businesses Grow
1. Save time with automation
Most cloud-based accounting software allows users to design automated workflows that help them save time. For example, you will enter the data about your supplier into the platform, and then you will find a process that will constantly pay that supplier on the date of each month.
After entering your clients' data into the system for the first time, you have the option of having the system send them recurring invoices immediately. That is how the automated system operates for your benefit.
2. Real-time view
Accounting software that is hosted on the cloud can establish a connection to the bank accounts used by your company, allowing you to monitor inventory, sales, and costs more easily. In addition, if you ensure that all information is kept current on a daily basis, you will discover that you are always able to view information that is current at any given moment.
3. Access your books on the go
Because cloud-based software can be accessed through the web, you won't have to dash back and forth to your workplace for every task. You will be able to monitor the financial data of your firm from the comfort of your own home, the office, or even from your smartphone if you use accounting software that is hosted in the cloud.
4. World-class security
After making the transfer to the cloud, 93 per cent of companies claimed that the confidentiality of their data reporting was improved.
Even though you might be concerned about certain cloud service providers keeping your information, keeping data on a cloud-based platform is actually one of the safest ways to do it.
If you use a traditional way of accounting, and somebody were to get into your computer, that person would be able to view any and all of the accounting information you keep. If you want to use cloud accounting, however, no one will be able to view your files unless they first log in to their own cloud account.
Cloud-based accounting systems additionally safeguard your information against the effects of natural disasters, and you'll also be able to authorise other individuals to view the information while restricting their access to specific parts of it.
Cloud-based accounting services perform regular upgrades to guarantee that your information is safeguarded and kept private as part of their commitment to providing the highest level of security possible.
5. Easy customisation
It might be challenging to find a standard technique of accounting that satisfies all of the requirements that a company might have. Cloud-based accounting systems give you the ability to connect add-ons so that they become a component of your complete ecosystem, which enables you to tailor your accounting system to your specific needs. In addition, you'll be able to tailor your activities to meet the requirements of your company thanks to the customisation tools.
6. Maintain relationships
Maintaining respectful relationships with suppliers, distributors, and other colleagues in the workplace is crucial. You will be capable of quickly retrieving invoices and bills through the use of cloud accounting, as well as determining whether or not a payment was skipped.
Cloud-based accounting systems also enable entrepreneurs to routinely engage with their accountants to ensure that all financial records are current, which makes the process of filing taxes significantly simpler and more streamlined.
7. Organisation
One of the most significant benefits of using cloud-based accounting systems is the increased level of financial organisation they provide. This not only simplifies the process of browsing for information but it also enables every division in your company to easily and effectively identify invoices and implement modifications to the costs they have incurred.
According to a survey conducted by Sage, 53 per cent of accountants have opted for cloud-based services to provide seamless project management and client engagement.
8. Collaborate with ease
When you used the older desktop method, you had restricted control over your accounts, which made it challenging to work together with your coworkers and advisors. For example, if your accountant required particular numbers, you could either email them back and forth or save them to a USB memory stick and then courier them to their office.
While collaborating with your coworkers and exchanging information with your advisors is a relatively uncomplicated operation when you're headquartered in the cloud.
How To Choose The Right Cloud Accounting Software For Your Business
To our good fortune, there is a multitude of cloud accounting software currently available. Some examples include Quickbooks, Xero, Hubdoc, and Expensify, and other business intelligence products.
How can you possibly choose the cloud accounting system that will best support the expansion of your company when there are numerous possibilities accessible?
Choosing the best cloud accounting system for your company among the numerous available options is one of the most important decisions that need to be made when a new company is being established, particularly on the part of startups and smaller companies. Because every piece of software comes with its own set of benefits and drawbacks, you will be required to examine all of your choices seriously.
When determining your choice, we have detailed the most significant considerations for you to take into account.
1. Business needs
Your business requirements are specific and deserve a personalised response. Therefore, when searching for the best cloud accounting software, it is important to analyse your company's type and scale carefully, and only after that should you evaluate the available solutions that are ideal for your particular needs.
2. Affordability
There is accounting technology available for any wallet. Still, if you desire something specialised in your sector or customised with capabilities unique to your firm, you should be willing to pay a higher price.
3. Ease of use
Select software that provides straightforward user interfaces to ensure that everyone on your staff has accessibility to the company's financial information and can understand it. Choosing cloud services with an intuitive user interface will make it easier for everybody on your staff to move quickly and efficiently through their work.
4. Flexibility
Because your business will expand and change over time, you will eventually require more sophisticated accounting systems in addition to larger storage capacities. Check to see whether the suppliers of cloud accounting services provide customisable plans; this will allow your company some wiggle space as it undergoes the journey into the ever-evolving technological world.
5. Integration
Your cloud software needs to be connected with your bank in order for all of your operations to be integrated. This will allow you to stay on top of your cash flow and ensure that none of your invoices is past due.
6. Data security
When looking at cloud accounting software, it is essential to take precautions to protect the confidentiality of your company's information. Please find out how each business maintains the data gathered by their program, and ensure they have robust security protections in place before deciding which one to use for yourself!
7. Customer service
When it comes to utilising accounting software, the very last thing you want is to have a negative encounter with customer care. This might result in more difficulties than remedies, so ensure that any software vendor provides exceptional support before adopting it!
Tips For Transitioning To Cloud-Based Accounting
Are you thinking about switching your accounting over to something that's done in the cloud? In that case, you are not the only one. Conventional accounting software is being replaced by cloud accounting by a growing number of companies so that they may benefit from the numerous advantages offered by cloud computing.
However, adjusting to a new system could be challenging, particularly if you are unsure of what to anticipate during the process. Nevertheless, the shift can be made as easy and stress-free as feasible with the help of the following suggestions.
1. Save important documents
Your financial records must be backed up before you undergo the transition to accounting in the cloud. This will allow you to retrieve them immediately in the event that something goes wrong during the switch.
2. Train your staff
Before your company goes live with its new cloud accounting software, you should start offering your staff education on the cloud software's capabilities and features. This will allow you to get the most out of your investment in cloud accounting options.
3. Choose the ideal software
There is a wide selection of cloud accounting software options available to pick from; nevertheless, it is essential that you take your time and make an educated choice according to the aspects of the software that will serve your company's requirements in the most effective manner!
4. Seek help from experts
If you have any issues or queries, it's to your greatest advantage to resolve them with trained specialists who will guide and support your company through this change.
Traditional Accounting Software And Its Problems
The procedure of accounting is an extremely important one that is dependent upon statistics and complex equations. Therefore, it should not come as much of a surprise that accountants were among the first individuals to utilise computers for the purpose of performing accounting tasks. It was possible to use a computer to generate ledgers, P&L accounts, and a variety of other types of account statements.
Nevertheless, traditional accounting software is no longer the ideal choice for firms in the rapidly changing and high-risk climate currently exists in the business world. Accountants nowadays are not simply book-keepers who are accountable for keeping a firm's transaction data; rather, they are dynamic business consultants that monitor a company's financial health, anticipate potential development, and play a part in the overall integrity of the firm's operations.
The problem with desktop-based accounting software
- Because it needs continual input with regard to new operations and because maintaining it in sync with real-time circumstances demands continuous work, the information that is kept in desktop accounting software does not reflect the most recent transactions. In addition, it is not as efficient as the most recent release of the software that is commercially available; rather, it is only comparable to the version that you most recently bought.
- In most cases, you will only be able to instal it on a single computer, and information will have to be moved from one location to another utilising USB drives. Using such a setup puts your information in danger of being stolen, and it also leaves your computer open to attack from harmful software and viruses, as these could be delivered to your system via the portable drive.
- There is a cap on the total number of users; now, just one individual can utilise the system. As a result, it is extremely difficult, if not impossible, to gain access to financial or consumer information in huge firms that have several critical people.
- Maintaining backups will incur additional expenses and take up more of your time.
- It will take you both time and money, and your machine will be down while you upgrade the software.
- The customer support service is incredibly slow, and it will typically cost you money for on-site visits as well as other fees.
Bottom Line
The advantages of using cloud accounting as well as some helpful hints that are likely to bring prosperity to any company are outlined above. There has been a tendency towards accounting in the cloud in recent years, and there is a valid reason for this. This movement has seen significant adoption rates.
Because of the many benefits it provides, as well as its prospective abilities and competence in integrating with other business components, it makes for an excellent and effective corporate strategy while at the same time eliminating significant administrative overhead.
Even while the cloud and implementing it might not help a firm achieve success right immediately, it does help create a business that is at its most effective version, which produces fruit over the long term rather than in the short term.
Recent studies have also demonstrated that by the year 2030, more than sixty per cent of all company operations will be on the cloud. This is due to the fact that, slowly but steadily, an increasing number of firms and organisations are becoming aware of the lot of opportunities that cloud-based services bring to the party.