Cloud-based bookkeeping and accounting solutions are a popular choice in the small business sector. It has quickly become the new standard because of the many benefits it provides. How do you manage your books and accounting processes in your business?
If you’re a small business owner and your accounting system isn’t yet in the cloud, keep reading…
In this blog, we explore the advantages of cloud-based bookkeeping and how you can boost efficiency in your business by using it.
What is a Cloud-Based Accounting System?
A cloud-based accounting system is financial management software hosted on remote servers and accessed via the internet instead of local servers. They operate on a ‘software as a service’ or SaaS basis. That means users pay a monthly or yearly subscription fee to access the software. There are usually multiple options for users, with more features available if you’re prepared to pay more.
As a small business owner, you can choose a subscription and pricing level to suit the size of your business and budget. If your business expands, instead of requiring costly new equipment and larger servers, you can simply upgrade your financial management software subscription.
Popular options for cloud accounting software include Xero, Intuit Quickbooks, and MYOB. All have similar features, but if you’re looking for a cloud accounting solution, make sure you explore the options first. That will ensure you can make an informed decision to suit your specific business needs.
What are the Key Advantages of Cloud-Based Accounting Software vs Manual Systems?
Access Your Accounts Wherever You Have Internet Access
One of the main advantages of using cloud services is that all your accounting data will be centralised in one secure place. But, it’s still easily accessible to you wherever you are, so long as you have an internet connection. This eliminates the need to have extensive IT infrastructure and large servers on your premises.
Data Security
Data security is a key consideration when shifting to cloud-based accounting. Just be sure to choose a reputable cloud provider so your financial data will be safe. Security monitoring is already built-in when it comes to professional accounting software solutions. So, you don’t need to be a cybersecurity expert yourself to protect your data.
Better Disaster Recovery
One of the key benefits of cloud accounting is having backups of your financial data and better disaster recovery. If, in the course of running your small business, you suffer from a natural disaster or property-related damage at your premises, you’ll have peace of mind that your financial data will remain completely safe in the cloud. Whereas, with desktop software and data stored on your own servers on your data located only on your premises, your business will be more vulnerable to data loss. In that case, once all your data is gone, it’s gone forever.
Access Real-time Financial Reports to Assess Your Business Performance and Drive Business Growth
Real-time insights and financial reports are available with cloud accounting software. With dashboard features, you can see all your financial information at a glance. So, you’ll always be able to get an up-to-date view of your true financial position and financial performance.
You can accurately monitor your cash flow, make informed decisions, and drive business growth – unlike static paper reports that quickly become outdated.
Real-Time Collaboration with Your Accounts Team
Do you have a bookkeeper or an accountant that you need to send data or tax reports to?
Another benefit of cloud accounting tools is they allow for easy real-time collaboration with your accounts team. This is ideal for teams working in multiple locations.
Reduce Human Error and Improve Efficiency Through Automation
Say goodbye to manual data entry! With cloud software, you can reduce instances of human error because there are less manual processes and administrative tasks. You can automatically import bank information through seamless integration with your bank accounts. You can also schedule reports, produce recurring invoices, follow up late payments automatically, and more.
Environmental Benefits
In addition to the many operational advantages that cloud-based accounting brings to your business, it is also a more eco-friendly solution. By removing the need for reams of printed financial reports and documents, your business can significantly reduce paper waste.
Are There Any Disadvantages of Cloud Accounting Software?
The only real disadvantage of cloud accounting software for a frugal small business owner is that you have to pay subscriptions on an ongoing basis–sadly, it is not free.
Typically, the cost increases as your business grows. This is because you will need more features and have a greater volume of transactions as your business expands.
Other challenges you might come across are:
- You will need to invest some time in setting up cloud accounting systems.
- It doesn’t reduce ALL manual data entry. For example, someone will still need to upload your invoices and receipts to the system. Human errors could still happen – there is just less of a chance.
- You will still need to control access to your financial systems and ensure that software security features are enabled to keep your data completely safe.
Interested in Cloud Accounting for Your Small Business?
Ask the Experts at First Class Accounts
If you have a growing business and feel ready to explore how cloud accounting can drive your productivity and growth, perhaps consider talking to an expert.
An experienced bookkeeper can help you navigate the online accounting software options available. They are also a valuable resource who can help you set up your cloud system or even manage your books on an ongoing basis.
At First Class Accounts, we have a team of professional bookkeepers located right across Australia.
Contact us today to find a bookkeeper near you.
