With cloud based accounting software, you are purchasing the right to use the software over the internet via a subscription model, as opposed to traditional software applications that are installed and run via a desktop computer. The cloud is a platform that makes data and software accessible online anytime, anywhere, from any device, your hard drive is no longer the central hub.
Cloud accounting has been around for quite a while now, but even still, the idea of taking our data to the cloud can be a little confronting for some and may seem like a risk. Why trust your entire operation’s financial information on a server somewhere you can’t see? As it turns out, cloud accounting is the safest way to keep all of your records. Your information is kept in large data centres with more backup systems and redundancies that you most likely have in your own business. So how does the cloud compare to traditional accounting software?
Small business accounting software that’s not available via the cloud can be tedious. Traditionally, it can take up far too much of your business’ time and effort. This doesn’t add value, and takes the fun out of being in business. Cloud software can save your company time and money, but is best suited to small to medium sized businesses, who don’t have complex customised systems and processes that large businesses may operate with.
Problems with traditional accounting software
- The data in the system isn’t up to date and neither is the software.
- It only works on one computer and data bounces from place to place. For example, on a USB drive. This is not secure or reliable.
- Only one person has user access. Key people can’t access financial and customer details.
- It’s costly and complicated to keep backups (if done at all).
- It’s expensive, difficult and time consuming to upgrade the software.
- Customer support is expensive and slow.
Benefits of using Cloud accounting software
- You can use cloud-based software from any computer or mobile device with internet connection, available in flexible 24/7 accessibility when it is convenient for you. There is no longer need to be restricted to one computer, user or location.
- Live data links, such as bank feeds provide up to date records of your current financial position. Allowing you to make better informed decisions about the financial future of your business in real time.
- Online accounting means small business owners stay connected to their data and their accountants. You have one centralised data file that can be easily shared with your accountant or bookkeeper, reducing the time and money spent reviewing your financials.
- Increased accuracy, manual processing can be tedious and also prone to errors, cloud based accounting eliminates any duplicated entries or discrepancies with its fully automated processing. Saving you time checking for errors.
- The software can integrate with a whole ecosystem of other cloud based software add-ons, to automate the flow of data for greater control and flexibility.
- It’s scalable, cost effective and easy to use.
- Go paperless, declutter your office and save on storage costs. The need to keep copies of expenses, receipts invoices is eliminated, as your data is stored on the cloud and can be quickly retrieved when required.
- In the cloud, there’s no need to install and run applications over a desktop computer. Instead, you pay for the software by monthly subscription.
- Automatic back-up of data, so you never have to worry again about using up your own hard-drive or taking regular backups.
With these technological enhancements, there’s never been a better time to understand the opportunities to optimise and grow your business. If you wish to discuss how Cloud accounting software applications, such as Xero, may benefit your small to medium business, contact your Liston Newton adviser.