Are you thinking of switching to cloud-based accounting software, but are unsure if it’s right for you? Let us break it down for you, and help you make your decision.
What is cloud-based accounting software?
Cloud-based accounting software gives you the ability to keep your business books online. The information uploaded is easily accessible from any device with an internet connection. Everything uploaded is encrypted so only people with login permissions or access can see the data.
You can subscribe to cloud-based software online and can connect to a business bank account with a real time bank feed. Which will save you from a lot of data entry as it is done automatically.
Additionally, you can give access to your accountant so they can input any data or help you with any processes.
Problems with traditional accounting:
When compared with cloud accounting, traditional accounting using desktop software or paper-based records, can give rise to multiple problems:
- System data is not always updated in real-time.
- Only works on one device. Data gets moved around which is not reliable or secure.
- There is no space for collaboration as usually only one person has access.
- It is expensive, particularly if you are charged per user licence for desktop software, and hard to keep backups (if this is done at all).
- Time-consuming to update your business books.
- High risk of loss of data.
What are the benefits of switching?
There are many benefits to switching to cloud accounting, some of which are as follows:
Cost: Cloud accounting offers ‘Software as a Service’ (SaaS), which includes many programs that can be accessed individually, with little or no notice period. These programs are hosted on the service provider’s remote server and can be accessed from a variety of devices. This is all included in the fixed monthly subscription cost.
Time: Accounting and bookkeeping processes can be automated, such as invoicing, bank reconciliation and reporting. Enabling you to focus “on the business, not in the business” and concentrate on driving profit and business growth.
Collaboration: Sharing data and documents across the cloud is much faster and easier. Your accountant and team will have access to anything uploaded. Meaning there will no longer be a rush to get everything to your accountant at the financial year-end.
Reliability: Cloud-based software isn’t perfect, but most of the time it usually runs at least 99.99% uptime. There are fewer problems because the software isn’t being downloaded to individual computers, which are all running different programs and systems that can cause issues. Cloud software companies take care of the software and fix any problems right away.
Mobile: You don’t need to send documents from your home to your office computer, because you can save them all in the cloud and access them from anywhere. With cloud accounting, you can run your business from the comfort of your home or office or when you’re out and about seeing customers. You can see your business in real-time, no matter where you are.
Recovery: Whether or not you use cloud computing, it’s always important to back up important documents to a dedicated hard drive. However, in the event of a disaster, your documents are still stored in the cloud, meaning you can access them from anywhere in the world with an internet connection. In the event of a disaster, your business operations don’t have to grind to a halt.
Why not try Xero?
We exclusively use Xero at BW Business Accountants and Advisers, to help our clients save time and brain space for other things. It’s a perfect choice for small businesses that need simple accounting, alongside detailed reporting, as the business expands. Xero also has a huge worldwide app ecosystem, which allows businesses to access hundreds of apps that integrate with your Xero account. We are a silver partner with Xero, so if you’re ready to switch to cloud-based software, get in touch with us and we can help you ease you into your transition.
Want to learn more? Read our advice on when to get bookkeeping support.