Technology is always changing. New and improved solutions are appearing on a constant basis. Cloud accounting, for one, offers so many advantages it’s a complete game changer – it makes data accessible online anytime, anywhere.
There are endless numbers of cloud-based tools that help with many different aspects of your business, not just finances. They’re bringing innovation, increased efficiency and improved profitability to the smallest of businesses, making benefits previously only accessible to large companies available for all. Business owners can now focus on what they do best.
So what are the advantages of cloud accounting?
Here are just 10 of the many reasons small business owners are switching to cloud accounting.
1. Save money
Traditionally, a small business would spend a lot of money on licensing software or buying packages to install on individual computers. Cloud computing does away with all of that and provides ‘Software as a Service’.
This includes many programs which are available individually, with very short or sometimes no notice period, often with free trials. These programs are stored on the service provider’s remote server instead of on your hard drive, so you don’t need a high-end computer to use them.
And not only can you access them from your tablet or phone, they’re actually designed to work on them. In short, you can be anywhere.
Cloud software providers take care of updates and program maintenance – this is all included in fixed monthly subscription costs. So you can significantly reduce staff and support costs.
2. Save time
Cloud accounting was developed to be an on-tap service that requires little knowledge or input from the end user – often referred to as ‘plug and play’. As a result, there’s no need to waste time installing programs and downloading updates. Developers roll out new versions of software regularly, and automatically. Even more significant is the amount of work which can be automated. Traditionally, many accounting and bookkeeping processes such as entering invoices, bank reconciliations and reporting, were done manually. With cloud accounting it’s all automatic.
This allows business owners to focus ‘on the business, not in the business’ and concentrate on driving profits and business growth.
And it allows ourselves as accountants to serve you differently: as business advisors, helping you to understand your financial position, and then how to grow your businesses.
This is a massive change. It’s a lot quicker and easier sharing data and documents instantly through the cloud. For example, a colleague on a business trip can quickly find a company document through the online systems, rather than waiting for co-workers back at the office to find and email it to them.
That same colleague can also submit an expenses claim remotely through the cloud. Accounting software and add-ins to QuickBooks Online take pictures of hotel, food and travel bills. Any expense claims can be approved, authorised and paid before they even return from their trip. As the accountant, you can help set up the rules for the various expenses, so the whole business machine runs smoothly and in a way that’s fully HMRC-compliant.
Unlike traditional accounting software, cloud software allows cost-efficient multi-user access. It’s therefore much easier to work together with colleagues and advisors to produce results and solve problems. You can also control the level of access individuals have to your data, so you can restrict someone’s view to only what concerns them, without revealing all the company details.
The cloud also allow your accountant to look at real time data, and you don’t have to bundle up books and records for submitting to your accountant.
Data storage is one of the core ‘Software as a Service’ offerings of cloud accounting. It allows businesses to access huge databases of information without having to operate their own floors of servers – this is of significant benefit for even the largest of corporates.
Outsourcing like this means that instead of having to invest in more hard drives and servers to increase capacity, a growing business can free up space and time. All you need is an Internet connection and electronic devices to access it.
Looking back, have you ever had a hard drive fail, a flash drive become corrupted, or a piece of paper get ripped, stained, or lost? We’ve all been there, and it’s not much fun. While cloud-based software is not infallible, most programmes provide an average uptime greater than 99.99%.
It goes to prove that Software as a Service is more reliable. Fewer problems arise because software isn’t being downloaded onto individual computers, all of which are running other programmes and systems, which can easily clash. Cloud software providers directly manage the software and deal with issues as soon as they arise.
Why do some people still subject themselves to the immovable nature of on-site physical storage, when technology allows you to have everything you need in your pocket?
It’s almost as if cloud computing was designed specifically for mobile devices because you don’t rely on the device itself for storage capacity. You no longer need to email documents from home to your work computer as you can simply save them in the cloud. You can then access them from both locations.
You’ve now got the flexibility of running your business from work, home or out and about. You can have a real time picture of your business wherever you are.
Security is one of the biggest concerns voiced about cloud computing. But there’s actually no need as the cloud is much, much more secure than you’d think.
For starters you’re guarding against physical theft, such as a break-in at a business premises. Nobody can access your data unless they have your online log-in details.
The National Cyber Security Centre also argues that hacking or system failure is not a concern. That’s because well-engineered software offers the benefits of security at scale. Your provider will be looking across all their customers and connections to observe security patterns. This ensures you’re protected before any problems reach your business.
In addition, cloud software often has additional levels of encryption and uses https certification.
8. Disaster recovery
Backing up important documents on a separate hard drive is always important, whether you’re using cloud accounting or not. But in the case of a natural disaster such as a fire that denies you access to your physical premises, your documents will still be stored safely in the cloud.
Since you can access your documents anywhere you have an internet connection, your business activity doesn’t need to stop in its tracks should disaster occur. Cloud computing is a vital tool to ensure business continuity.
9. Evolved IT
Studies have shown that the life-cycle cost savings of cloud computing are as high as 50% for companies using large numbers of in-house servers. Add to that the elimination of service interruptions caused by traditional IT issues, such as downloading updates and fixing system errors, and you can move forward a lot faster than the competition.
Cloud accounting also offers handy add-on apps which allow you to process receipts and invoices with more ease, track your cashflow and chase outstanding debtors. These are fast becoming popular and integrate with cloud accounting software easily.
Forward-thinking accounting firms specialise in giving advice on which cloud products clients should use alongside QuickBooks Online to make the running of their business more efficient, and access the right management information on a timely basis.
They give clients the option of undertaking a systems review so that owners and their teams look at areas which are a drain on time. They aim to cut out manual intervention where possible, including the use of spreadsheets. Instead, you can use expense capturing software, tailored reports either within QBO or KPI apps, or other specialist add-ons such as those dealing with stock.
10. The environment
Whilst the above 9 reasons clearly spell out the benefits of cloud accounting for small businesses, moving to the cloud isn’t an entirely selfish act. The environment gets a little love too.
When your cloud needs fluctuate, your server capacity scales up and down to fit, so you only use the energy you need, and you don’t leave oversized carbon footprints. Removing the need for physical storage also eliminates much of the waste and pollution that comes with discarding hard drives, paper and ink.
Any three of the above benefits would be enough to convince many businesses to move their business to the cloud. But when you add up all ten? It’s approaching no-brainer territory.
Cloud technology is fast becoming the way forward for business. With Making Tax Digital, cloud accounting ensures everyone complies with government digital tax requirements more easily.
So have we convinced you to move away from your paper files and folders? If so, get in touch to find out how we can help you to go paperless!