As an accountant, it’s amazing to see just how many small businesses and startups still rely on clunky and traditional bookkeeping systems, like huge, unwieldy Excel spreadsheets or even paper ledgers. Accounting software has changed immeasurably over the last decade and cloud software solutions, like Xero and FreshBooks, can automate a large number of the standard accounting procedures, freeing up more time to spend on activities that really add value to the business.
Is it time for your small business to make the switch to cloud accounting software? Here’s a look at some of the benefits that come with it.
1. It allows for simple integration with other software, tools, and apps.
You’re probably already using a range of software solutions and/or apps to view and input your financial data, invoice your clients, track customer contacts, pay your employees, and do your business banking. Switching systems, even if it makes life easier all around, can cause you to worry that important documents may get lost in the shuffle.
Luckily, the majority of cloud-based accounting software comes with features that enable simple migration of historical and current information, regardless as to the app or software that you use. Some allow a simple transfer of accounts from solutions, such as QuickBooks, and the integration of your bank accounts.
2. Less worries over data security and recovery.
Any business that uses computers is vulnerable to potential attacks. One of the benefits of cloud software is that all data is stored and transmitted in an encrypted format. This means that the only people who can access it are those to whom you give permission. You can also allocate different security access to different people, allowing you to control who sees what. Keeping your data in the cloud also ensures that it is safe from physical damage to your office or theft.
3. The software is inexpensive.
Small businesses may not have the financial resources to invest in large-scale data centers or significant volumes of IT equipment. Thankfully, cloud software removes the need for physical servers and this means far less IT support is necessary. The majority of cloud accounting software can also be paid on a recurring monthly basis, instead of a lump sum for a single licence, allowing entrepreneurs to break up payments and manage cash flow more effectively.
4. Easier to collaborate.
Using desktop computers often means that the data on that machine can only be accessed by the person using it at any given time. For anyone who had to work on an Excel file located on a shared server, they’ll understand how difficult this makes it for teams to collaborate together.
With cloud accounting software, your staff can access the same files anytime and anywhere from a range of devices including smartphones and tablets with WiFi connection. On top of this, the data accessed via the cloud is in real time, so you can see changes being made and when they are being made.
5. Plenty of scalability.
By investing in this software, you only pay for the resources that you know your business will use. It’s flexible enough so that you can scale up when needed because these systems are modular. This means you can add on additional features if you require them at a later date and only pay when you need them. You can easily add new users and grant them access to the financial files stored in the cloud.
6. Simpler facilitation for online selling.
If you are planning to ramp up your online sales, integrate this software with eCommerce apps like Shopify. This allows you to access key customer information wherever you are. Allowing your accounting software to directly connect to your online store puts you in complete control of your business.
7. Stay updated with the latest trends.
Staying on top of the latest trends and providing the best value to your customers is vital in the fast paced world of a 21st century business, especially when technology is advancing so quickly. One of the great things about these solutions is that they are a service, not a product. This means the service will continue to be updated to meet the demands of the modern business world. As long as you keep paying, you can rest assured you’re always using the most up-to-date financial software on the market.
Although migration to the cloud will require a few adjustments and some investment, the long-term benefits are well worth it.
Andy Hyland is a certified Xero Accountant and the owner and director of AK Tax, an accountancy and tax advisory firm based in Medway, Kent. You can connect with him on Twitter, Facebook and LinkedIn.