Cloud accounting: what is it, and why should I care?
We're increasingly familiar with the idea we can access our bank anytime, from anywhere, using an internet browser or app. Cloud accounting simply extends that concept to give you anytime, anywhere access to your financial information from any device. Your hard drive, your PC or Mac, is no longer the central hub for your accounts. Cloud computing is a term which refers to a model of network computing,in which a program or application runs on a connected server or servers rather than on a local computing device such as a PC, tablet or smartphone
Here we'll concentrate not on the technology, but the benefits which cloud accounting might bring to your business. We'll also run a brief comparison with a traditional, desktop solution.
Here's how cloud accounting could benefit your business
Get things done when you're on the go
Access real-time customer information, capture expenses and send estimates or invoices from your iPad, iPhone or Android device.
Connect to your business bank account
Automatically import and quickly reconcile bank account transactions from all the major banks.
Track sales and expenses
Up to date view of your sales, full details of expenses, and a clear view of profit and cash, all from your PC, table or smartphone.
Track and manage your tax
Instantly view your tax liability and get everything you need to complete your VAT return, every quarter. Making Tax Digital compliant.
Automatic backups and updates
Automatically back up your data every day, keeping everything safe. Upgrades are all included, so you'll never have out of date software to work with.
Small businesses benefit most
We're not suggesting that moving to the cloud is important for everyone. On the downside, you'll be paying monthly and your data is sitting on servers managed by a third party. On the upside, you'll be able to get to your data anywhere and anytime - which means you'll be connected to your data and your bookkeeper or accountant, all the time.
Some of the problems traditionally associated with a desktop solution, and which cloud based accounting software addresses, include;
- The data in the system isn’t up-to-date and neither is the software.
- It only works on one computer and data bounces from place to place. For example, on a USB drive or shared folder. This is not secure or reliable.
- Only one person has user access. Key people can't access financial and customer details.
- It's costly and complicated to keep backups (if it's done at all).
- It's expensive, difficult and time-consuming to upgrade the software.
- Direct and secure links to online banking means that transactions are readily accessible, and you can always see what's going on
- You can access your data using a smartphone, iPad or iPhone, PC or Mac. In fact, anything which can access the internet can access your data.
- Backups are always taken care of; upgrades are always managed carefully and there's no sharp intakes of breath when you realise a PC has crashed, or you need to get an upgrade in and running.
- You can give as many people access as you like; there's no extra cost, and you can restrict access to allow people to just see or do what they need to do.
- The best packages will simplify reconciliation, attempting to match transactions from the bank with those entered into the accounts.
Which means in practice....
Our clients who've made the move say;
- they've collected money faster from late payers; they can check on site or straight away whether the payment's in and email a second copy of an invoice direct from their iPad or smartphone.
- they feel more in control of their finances. If they're not sure how things stand, or who owes what, they can get to the information straight away; whatever the time of day. No more phoning the bookkeeper to see what's happening.
- they can invoice on the go. If a client's working on a remote site, finishes the job, they can write up the details and email the invoice without going back to the office or home. Faster, more productive.
- the relationship with Whitehill is more productive, because there's no need to swap files, or check versions, to see what's behind their figures. We can collaborate online, looking at the same figures at the same time.
- upfront costs are lower - no need for a server, backup or remote login.
- they can concentrate on the business; outsourcing bookkeeping is always a good idea, for the same reason. Now, we can provide the online cloud accounting package which means you really don't have to worry about running software or getting data.
Which cloud accounting software do you recommend?
Before we partnered with anyone, we checked out the offerings for UK clients in some detail. The result is written up in our white paper, available free (click here). As a result, we have partnered with Quickbooks Online and Xero; our staff are trained and certified by these providers, ensuring that you can have confidence in making the move.