Cloud Computing for Accounting
Cloud accounting software can revolutionize the efficiency of your bookkeeping, streamline your financial administration and provide a real-time view of your key numbers. But with so many platforms on the market, how do you know which one is right for you? In this article, we’ll guide you through the core benefits of switching to cloud accounting, with advice on which platforms are available to suit you.
Recording the income and expenditure of your small business to keep track of your historical financial performance is nothing new. Double-entry bookkeeping has been around for centuries and accounting software has existed for decades, giving finance teams the ability to record and track the money coming into, and out of, the company.
Traditional accounting software
Prior to cloud, most accounting software was desktop-based. In other words, the actual application was installed and run from the hard drive of your office desktop computer. This has a number of drawbacks, including limited access to your data, the need for constant software updates and the ongoing cost of backing up all this financial information.
Cloud accounting software
Cloud accounting (or online accounting) has all the same functionality as desktop accounting, but moves the whole process to the cloud and expands upon it. There’s no desktop application – you log in to an always-up-to-date online solution and all data is safely stored on a cloud server. Most cloud platforms will also have an open API, which basically means third party software can connect with your system to provide even further value to you as a business owner.
Benefits of Cloud Accounting
Moving accounting from the desktop to the cloud has been a huge leap forward in financial management, with many of the drawbacks and cost implications of traditional accounting being removed from the equation.
Access your accounts anywhere
Cloud accounting gives you access to your key business numbers 24/7, from any location where you can access the internet, removing the need to work from one central office-based computer. Log in via a web browser from your laptop, or use your provider’s mobile app to access your accounts from your phone or tablet.
By keeping your bookkeeping and bank reconciliation up to date, you can achieve real-time reporting. Instead of looking at historical reports that are days, weeks, or even months out of date, you have an instant overview of the company’s current financial position. This real-time overview is vital when looking at your cash position, planning future spending and when making big financial and strategic decisions as a management team.
Open APIs mean you can add a range of third-party apps and tools to expand your core business system. There are cash flow forecasting apps, online invoicing apps, industry-specific project management tools and a host of other practical solutions to choose from. These tools enable you to further save time, reduce resourcing costs, identify problems further in advance, and generally ease the pain of unnecessary admin that’s weighing you down.
Always working with the latest software version
When you log in to your accounting platform in the cloud, you’re always using the latest version of the software. There’s no need for time-consuming and costly updates – you just sign in and start working. Plus, you don't have to be responsible for applying security fixes - your software provider will handle that for you automatically.
Secure sharing of data
When you’re working with your accountant, bank or other advisers, you can easily grant access to your accounts with cloud accounting software. There’s no need for USB memory sticks or sending emails back and forth. Your advisers have safe and secure access to all your financial information, in real time. This is quicker, safer and gives your advisers the information needed to support and advise you, going forward.
should your company use Cloud Accounting
To get the most from cloud accounting, it pays to make use of the additional digital connectivity and real-time data capabilities that cloud offers.
The enhanced real-time data capabilities of cloud accounting make it ideal if your business wants fast access to detailed financial breakdowns, management information and key performance indicator (KPI) metrics. And with most platforms offering an open API, there’s a wealth of choice when it comes to building an app stack and creating a custom suite of business apps.
Cloud Accounting Software options
Cloud providers to choose from include:
Xero – A great choice for small businesses that wants simple accounting alongside detailed reporting as the business grows. Xero also has a huge global app ecosystem.
QuickBooks Online – A platform that’s aimed squarely at small businesses, with all the accounting functionality of QuickBooks classic desktop version, plus a great app store.
Sage 50cloud and Sage 200cloud – Each combine the convenience of the cloud with the power of desktop accounting software.
Kash Flow – A good choice for small businesses that want a straightforward platform that gets the job done. All the basics are there but with fewer options when it comes to apps.
Zoho Books – Unlike many cloud accounting providers, Zoho provides several other business softwares of its own to connect Zoho Books with. It also sports a few connections to third party software too.
Free Agent – For freelancers, contractors or microbusinesses, Free Agent gets your accounts done without all the additional bells and whistles.
ClearBooks – Great for small businesses, ClearBooks even offers a free option called Micro which they say is best suited to "new or super small business". It offers a few third-party apps to connect to, but not at the same scale as Xero or QuickBooks.
QuickFile – Like ClearBooks, QuickFile also offers a free option to businesses under a certain size.
Exact – For both small businesses and enterprises, Exact offers a range of financial software which can offer additional functionality beyond accounting. There's also an app store to add even further functionality.
Sage Business Cloud Accounting – Bigger businesses will like the scalable accounting of Sage’s cloud platform, with all the business functionality of their desktop version. Third-party apps are available, but extra Sage modules will add to your costs and budget.
MYOB – One of the key providers in Australia, MYOB is designed for small businesses that want a streamlined accounting solution with all the benefits of the cloud.
Created & Posted By Suraj Kumar
Paid Assistant at TAXAJ
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