The Benefits of Cloud-Based Accounting
Everything lives in the cloud these days: our Google documents; our holiday snaps; our powerpoint presentations and our music. In business, it's no different: everything from customer databases to photo editing software can be and infrequently is stored in the cloud.
The advantages of using cloud-based systems are well documented, ranging from convenience to security. Data – provided it is encrypted and backed up – can be accessed from anywhere and is safe from the threat of fire, theft or hardware failure. Cloud-based software is also cheaper thanks to licensing arrangements that enable multiple users to access the same program simultaneously.
The cloud isn't the future – it's the present and it's all around is, even if we can't quite see it. As the number of cloud-based solutions continues to grow, businesses are faced with tough decisions to make: to stick with what they know or to take the plunge and move their operations to a virtual environment. Just because it's possible do something in the cloud doesn't mean it's necessarily right for your company. Every solution needs to be assessed on its merits rather than its ubiquity or perceived trendiness.
Accountancy is one of many fields to have benefited from the cloud computing revolution; it's now possible for businesses to maintain all of their financial records online. When audits and tax returns are due, there's no need to take a hard copy to your accountant's office: at the press of their button it can be instantly delivered to their desktop, saving you time, money and the need to ransack the office in search of a thumb drive.
'Time and money' is the mantra that's used to sell most business systems of course. Will it make your life easier? Will it reduce your overheads? And if so, will the savings justify the initial investment required to train staff and purchase the software?
Payroll and accounts may be two separate systems but they're closely linked. Cloud solutions provide the option to seamlessly merge these two divisions, ensuring that records are in synch and in the same place. That said, it's possible to have one without the other; SMEs may still prefer to process their payroll manually in-house for example. For larger limited companies however, it makes sense to use the two in tandem via an integrated cloud-based system.
Packages are typically priced via a monthly tariff which includes a provision for a maximum number of employees. The larger your company, the higher the fee you'll be expected to pay. Invoicing, payroll and bookkeeping are all included, ensuring that at the year-end, the blind panic induced by having to round up a year's financial records is largely eliminated.
Major software vendors including Sage provide all-in-one cloud-based systems, complete with 24-hour support and free introductory trial. It's not just convenience that might compel a business to move all its operations to the cloud: fully-integrated invoice generation can also enhance the perception of your business. Whether visiting your premises in person, shopping online or ordering over the phone, customers will benefit from having their records all in one place.
For example, a company technician can issue invoices and create sales records on the job, with quotations emailed instantly to the customer. Spare parts, new stock and repeat business can all be processed with the minimum of fuss. Emailing records directly to customers doesn't just look professional – it substantially saves money on stationery and postage costs.
One of the biggest headaches that businesses face is VAT. If it's kept up to date, VAT can be dealt with fairly easily. It's all too easy to put it off until the last possible moment however, leading to the risk of late payment fines from HMRC when deadlines loom and then pass.
Cash is king
Accountancy software isn't just about calculating the monies that are due to Caesar; it's just as useful when it comes to managing cash flow. It's all well and good having stock, customers and sales enquiries, but cash flow is what makes a business tick. Healthy cash flow is at the heart of a healthy business. Good cash flow management software will enable you to keep track of all monies coming into and out of your business. Takings, credit, cash card and cheque receipts are all calculated, giving you an accurate figure of your finances – one that's updated in real time.
The range of administrative tasks that accountancy software can handle is exhaustive. If you're considering a cloud-based solution, however, it's possible to be overwhelmed by the options available to you. Having all of your data in one place is undoubtedly convenient, but avoid overcomplicating things by tacking on services you really don't need. Most cloud systems are modular, enabling you to tailor a bespoke solution to suit.
One option may be to start off with the essentials – payroll and accounts perhaps – before bolting on additional features as and when they're required. This also ensures that staff can be trained up gradually rather than having to dispense with years of acquired knowledge and master new systems overnight.
If you're in the market for cloud-based accountancy software, try the free trial at Cloudbasedaccounting.co.uk, focus on the features you really need and allow your staff time to adjust. After the initial teething period, you'll be well-placed to reap the benefits every single day. More time. More money. Less hassle. It's that simple.