When I was introduced to Cloud Accounting several years ago I was extremely excited as I could see the potential this gave business owners to have better control over their finances within their business. I was shocked as to how many people differed from my opinion telling me they were costly and risky.
Since those early days lots of people have realised the value of being on the cloud, however, some small business owners still haven’t taken that leap yet. With Making Tax Digital coming into force over the next few years then this is a time where all self-employed people, however small they think their business is, should be thinking about moving to cloud accounting, there are many benefits to this:
- Save time and money – People may think that cloud accounting systems are expensive, most do have a monthly cost to them, however, the saving in time using the system usually out ways the cost of the software.
Also if you are still using an old cash ledger system your accountant will most probably re-enter your accounts into their own system anyway. If you have already entered them into the cloud you can give access to your accountant and they have no need to re input, saving you money on your accountancy fees.
- More accuracy – The good cloud based systems have an incorporated bank reconciliation facility which means you can easily double check that you have all your invoices/expenses inputted into your accounts. Any anomalies would be glaringly obvious through their absence of the paperwork. They also take away the possibility of human error by working out VAT and other calculations for you.
- Work anywhere – The old desktop based systems we used to work on were very limited for sharing data with other people or other locations. Having a cloud based systems means you can work on any machine, or device, you have available to you that is connected to the internet.
It also means more than one person can work on your accounts without the worry of losing data or having to wait till someone else has finished with it.
- Easy integration – Software developers are continuously trying to capture the market to develop the next new time saving application for business owners and there are masses of software packages that integrate with the more popular cloud based software, they are designed to make your business life easier.
If you have any time-consuming chores that you know could be lessened by a link to your accounts then it is most likely that someone has already developed it.
Our favourite software of the moment is “Autoentry”. It is a tool that links with your cloud accounting system that reads the data directly off the receipts, accurately saving vital time inputting all the details. It also works as document storage as the PDF version of the invoice is captured in your accounts system – magic!!
- Less risk – Having paper based accounts is quite risky and irreplaceable if you lost it. Having everything on the cloud may seem risky as we are relying on the companies and the internet to be able to access our accounts, however, the reputable companies have many backup systems in place to ensure full data protection and online security. They have restore features, in case you made a total hash of things and needed them to re instate your accounts.
- Better understanding – Many of the Cloud accounting packages have instant access to reports that previously you had to rely on your accountant for. This does pose a risk that if the information you have entered is incomplete you could be getting incorrect reports, however once you are confident with the bank reconciliation and knowing that all the queries on the accounts are sorted, then you have full access to your management accounts at a click of a button. Taking some time with your accountant how to read and understand these reports, will enable you to understand your business numbers and move the business forward.
- Being ready – As I mentioned earlier Making Tax Digital will eventually affect all businesses whatever size. Getting ready to be compliant now is good business sense and using a cloud based accounting system will mean you’ll have nothing to worry about when it is your time to have to electronically submit your accounts quarterly.
If you would like any advice on which Cloud Based Software’s would suit your business, advice on what software is available to help you either reduce your time doing accounts or give you a better understanding of your business numbers or if you have no idea about Making Tax Digital and want to know more then we’d be happy to help.