Cloud Accounting – Does it live up to the hype?
Cloud accounting isn’t a new concept, many platforms have been around for a number of years now, but with the move towards MTD in recent years it’s certainly being talked about a lot more. Large advertising campaigns by some of the market leaders such as Quickbooks and Xero have been hard to miss, but what are the benefits, and can it really make a difference to your business?
Ease of Access
Cloud accounting software is accessed via the internet using either a web browser or an app on your phone or tablet. This means the software can be accessed anytime, anywhere. This has been shown to be incredibly useful during the Covid-19 lockdown. As we come out the other side of this and start adapting to working in new and more flexible ways, desktop based software packages are unlikely to cut it for many businesses and the cloud will become more important than ever.
Having your accounting records in the cloud rather than on a desktop means more than one person can access the data at one time. This is particularly useful if you have more than one person in your finance team. Another benefit of this is that it allows your accountant to offer you remote support and to access your records if you require accounts in a hurry. It’s important to note that most cloud solutions allow you to vary access for different members of your team, for example you can allow some employees to only access sales invoices and even limit this down to them only being able to draft them, others can be set to only access purchase invoices or just submit them for approval, others could be granted full access to the software. This allows an enhanced level of control whilst still allowing collaboration, invoices and receipts no longer need to be input and approved by just one person.
Data loss or corruption can cause major issues for any small business. With your accounting records in the cloud you can rest assured that your data is safe, so you don’t have to worry about a virus, fire or theft destroying your records. The data tends to be backed up in multiple locations and heavily encrypted, so the chances of data loss or security breaches are incredibly low.
With standard desktop accountancy packages, updates are regularly released and must be manually installed which can mean down time for you and your team. Cloud software is updated regularly by the software providers. As it is all hosted remotely, there is nothing for you to do and generally no downtime.
As cloud software develops, automation is becoming more and more common. From direct bank feeds which make bank reconciliations a doddle, to receipt capture apps which take a picture of your invoices and receipts and pull out information to reduce data input, systems are constantly being improved to reduce the time it takes you to complete your bookkeeping. These systems also make it easier to keep your records up to date, no more waiting for your bank statements to arrive in the post! The time saved by automation should not be underestimated, all these little bits add up and allow you more time to spend on other areas of your business or with your family.
Most cloud software allows for the integration of third-party apps which can enhance your records and give you better insight and control over your business. Xero is particularly advanced at this with a well developed app marketplace allowing bolt-on apps which can help in all areas of your business, including direct feeds from your till or online store, stock control, employee expenses and timesheet capture, credit control, and detailed analytics reports. If selected carefully and used correctly these could help you reduce data input and significantly increase your understanding of your business.
Many of the cloud accounting software options out there tend to be cheaper than the popular desktop solutions. You may also find that a lot of them will offer a reduced price for the first 3 months and/or a free trial period for you to find your feet. There are a few free options available, but it is worth selecting your software based on its suitability for your business’s needs, not just the cost.
With all these potential benefits you will more than likely find that cloud accounting software is the way forward for your business. As the world moves on from Covid-19 and starts to look for more flexible and resilient ways of working, the increased flexibility and adaptability of cloud software is likely to become essential for many small businesses.