It's no secret that we here at Generate are big fans of cloud accounting, particularly Xero and the huge library of add-ons available in their online marketplace. We frequently get asked by small business owners why they should consider the move to cloud accounting so I thought it useful to outline some of the many benefits here.
Being on the cloud means that wherever there is internet access you have access to your accounting records. Not only does this mean you can send off an invoice whilst on the road, it also means that your accountant, bookkeeper, and yourself all have access to the same data all the time. No more sending data files back and forth, and no more remembering which file marked "latest version" is actually the latest version.
Cloud accounting packages offer a variety of levels of access meaning that you and your accountant can log in to discuss profit forecasts for the coming year, whilst staff can log in to submit expenses, fill in timesheets, get copies of pay slips and apply for leave.
As the software is hosted on the cloud there is no need to install software on your local machine. No more worries about having the latest version installed or having compatibility issues. It also means that you no longer have to allocate resources to managing your own data backups - this is all handled by the cloud accounting software provider which tend to have far tougher data security policies than any small business could dream of affording.
No more entering bank statements line by line! Cloud accounting software allows your bank to send statements directly into the software every day (known as "bank feeds"). Once the data is in there, the software can be taught 'rules' so it knows where to code your various types of expenses automatically. The software will also attempt to match deposits with your outstanding debtor invoices meaning you don't need to go through your debtors ledger to ensure the figures match. All of this adds up to less time on the books and more time on the business.
For Xero there is a whole world of add-on software options that further increase the power of your online accounting software and help you save even more time. For example, there is software that manages and chases outstanding debtor invoices, inventory management, time and job management, payment facilitation and much more. Have a look for yourself here.
Perhaps the greatest single virtue of cloud accounting software is that it gives small business owners the information they need when they need it in order to make informed business decisions. It eliminates guess work and allows you to track the performance of your business in real-time from wherever you happen to be. It also allows you to work with your accountant without the need to prepare reports in advance - a quick phone call and you're both looking at the same information from wherever you may be to get the advice you need when you need it.
If you're interested in learning more about making the move over to a cloud accounting software solution, please get in touch. We'd love to discuss implementing a system tailored to meet the needs of you and your business. We here at Generate use cloud systems for our entire business (accounting, tax, files, etc.) and we love it.