Unlocking efficiency and growth: The benefits of cloud accounting
In business, staying ahead of, or at least up with, the curve is crucial for success. Over recent years, one of the revolutionary tools that has transformed the way businesses manage their finances is cloud accounting.
Essentially, this means all your accounting information is held in an online application (such as Xero) and it offers several benefits over traditional, on-site accounting systems. Here are some of the main ones.
Accessibility
With a traditional accounting system, it may be installed on a single PC or be set up in a single location. That means the finance team must be physically present in the office to be able to access financial data. Cloud accounting is available anywhere you can reach the internet and frees you from this constraint. It gives you access to real-time financial information anytime, anywhere. This kind of flexibility and access can be very valuable, allowing teams to collaborate and decisions to be made regardless of location.
Suitable for Making Tax Digital
As HMRC rolls out Making Tax Digital (MTD) across the tax landscape, having software that can access the tax portal and present data in the right format is essential. While some office-based systems can also do this, many businesses using something developed in-house or using more general business tools (excel spreadsheets for example) will struggle to comply when making submissions. Currently VAT is already under the MTD scheme but over time other business taxes will be added making cloud accounting a much more attractive option.
Cost efficiency
Cloud accounting operates on a subscription-based model, avoiding the up-front software licence costs usually involved in traditional accounting systems. Cloud accounting systems also typically receive automatic updates and maintenance, as well as being backed up regularly by the provider, which can reduce the demand for IT support.
Security
The security of financial information is naturally a top concern for a business. Cloud accounting providers use advanced encryption measures to ensure that sensitive information is kept safe. These providers usually have dedicated teams focused on monitoring and addressing security threats too. This provides a level of protection that may be difficult to replicate on your own premises. Cloud accounting systems also include robust backup processes, which reduce the risk of losing data because of hardware failing.
Automation and Integration
With many cloud accounting systems – or by means of subscribing to linked automated data entry software – data entry can be automated. The most common example is capturing expenses. By uploading a copy of the invoice or receipt expense management software can ‘read’ the data and create the entry needed by the cloud accounts system. While such systems aren’t 100% accurate, the time-savings can be considerable and allow those dealing with finance to concentrate on more strategic work.
It’s also possible to connect other applications to your cloud accounting system. A great example here is your bank information. You can connect your bank accounts and it will bring in a daily list of all the transactions, which you can then match to transactions in your cloud accounting – updating invoices and bills as paid automatically.
The benefits of cloud accounting can be transformative to your business, whatever the size, and give you a competitive edge in today’s dynamic market. Embracing this technology is not just a trend but can be considered a strategic move towards a more agile, responsive, and prosperous business.
We have experience of various cloud accounting systems, and all our packages include subscription to the most up to date ones. If you’d like an assessment of your current system to see how cloud accounting might help you, please contact us!
