It’s the buzz phrase that you hear almost everywhere – your business partners talk about it, your friends, clients, suppliers, even your accountant: cloud accounting. But what exactly is it and is it right for you and your business?
If you don’t yet know what the cloud is, then here’s a brief recap: it is a virtual storage facility, using a supplier’s servers, and enabling access to your account from anywhere and from any device. Think of your Google photo bank, you online banking, or your iPhone’s cloud-based back-up system. It’s exactly the same concept only for accounting software.
Is it right for me and my business?
If you are a business owner, particularly a small business, entrepreneur, start-up, or sole trader then cloud accounting is ideal for you. Why?
- It saves you money, avoiding big expenditure on accounting software systems
- You pay a monthly subscription, spreading the cost across your financial year saving you having to fork out a small fortune for complex software licences every year
- It gives you real-time access your data anywhere, anytime, and from any device. All you need is an internet connection and a laptop, tablet, phone, or desktop computer
- Anyone working for your business with the login details can access the data, it does not have to be restricted to one or two individuals who could act as a bottle neck during busy times
- You don’t have to have a degree in accounting, most software is easy-to-use and simple to understand
- You don’t have to worry about backing up your data, or having a back-up of the back-up, just in case. The supplier manages all of that on your behalf
- There is no need for software updates as that is all the responsibility of the cloud supplier who manages their system and keeps it up to date
- It is secure. Cloud accounting software suppliers take security very seriously, knowing it is critical to you. Data will be encrypted, backed up, and with the latest security and virus checks. It also takes away the risk of you losing a laptop or storage device with sensitive information on it
- It saves you time. You can input expenses, invoices, or payment details at any time without having to wait until you are back in the office to end up spending a day on administrative and accounting tasks that can take your focus away from other crucial elements of the business
Why use cloud accounting if I have an accountant?
Cloud-based accounting software does not make your accountant redundant, but it does make their and your life easier. Your accountant can access your data in the same way you do and can advise on any issues or problems you may be having instead of storing them up for your monthly, quarterly, or annual meeting when much of the detail has been forgotten. It also makes it quicker for your accountant to prepare your tax returns, check VAT figures, and help you prepare management accounts and business plans, which, ultimately, is a further cost saving for you.