Regardless of the size of your business, Cloud-based accounting applications can offer significant value to your organisation, both in terms of security and reliability, and in allowing your business to run efficiently.
What is Cloud-based accounting? In simple terms, it operates just like a regular accounting software solution that you install on a computer, but rather than have it installed on the computer itself, a Cloud-based application is instead stored on the Internet. Rather than log into it by clicking on an icon on your computer, you log in online, as you would with your email accounts. As much as that might sound like a simple difference, there are real benefits to moving your accounting to one of these online platforms.
Because it’s possible to log in to the account from anywhere, a company’s accountant or managing director doesn’t need to be in the office or using a specific computer in order to manage the businesses’ accounts. This is of particular benefit to smaller businesses, which might not have a full-time accountant, or the managing director might need to personally log and check the accounts. Being able to do so from anywhere helps ensure that accounting can be completed immediately.
2. It enables collaboration
It’s quite difficult for multiple people to be working on the same accounting software when that software is stored on a single computer or laptop. With Cloud-based accounting, as many people that need access to the solution can use it, making it easier for a team – rather than an individual – to manage the organisation’s finances.
Mistakes can be made when managing accounting software stored locally. The wrong file might be loaded when booting up the system, for example. Or backups might not be kept with enough regularity, leading to critical data loss if the computer crashes or is somehow damaged (for example, through theft or fire). Adopting a Cloud-based accounting solution mitigates these risks entirely, as the service provider is responsible for ensuring the integrity of the data (by having backups of the servers that host the data), and because the data being kept in the cloud, it will always be the most up-to-date, so there’s no risk of working off the wrong file.
Smaller businesses often try and make do with inferior accounting solutions because that’s all they can afford. But Cloud-based accounting solutions offer the same feature sets to businesses of all sizes, and simply scale up in cost as the business grows. This gives businesses of all scales access to high quality, fully-featured accounting solutions, which in turn helps the business to operate to its full potential.
5. It integrates with other solutions
Standalone accounting software rarely “talks” with the organisation’s other management solutions. Or, if it does, it can be a complicated process to set up and manage. Cloud-based accounting solutions are designed to effortlessly link into other Cloud-based management solutions, thus making the overall operation of the business that much more seamless and pain-free.
Which Cloud accounting solution is right for you?
There are a number of different Cloud-based accounting packages on the market, each offering its own feature set and targeting particular markets. Sole proprietors have different needs to small businesses, which in turn require a different feature set to large enterprises.
Meanwhile, businesses have an incredible range of accounting solutions to choose between. The most popular, however, tend to be Xero, BankLink and MYOB. Each product has it’s own strengths and weaknesses, so you should consult your accountant to ensure you invest in the software most appropriate for your business.
It’s important to keep the potential need to move software providers in mind before adopting an accounting solution. By nature, accounting records need to be kept over a long period of time, and if a change in provider is necessary, it’s important to be able to migrate the previous data to the new platform. Some Cloud-based accounting solutions have a limited ability to export and/or transfer data, and this is something that could impact on the business in the longer term, so be sure to do your due diligence before signing up, taking into account what might happen to the business five, if not ten years down the track.
Thinking of moving to the cloud?
For advice on what accounting software will best suit your personal or business needs, contact Pinn Deavin to help you implement the best solution for your situation.