It can sometimes be time-consuming to oversee all the day-to-day operations of your business, but your company’s long-term success hinges on maintaining accurate books. QuickBooks Online is cloud accounting software that helps you take care of your finances and does the number crunching for you.
Online accounting software like QuickBooks offers several different cloud accounting features depending on the size and type of business you own.
What Is Cloud Accounting?
Cloud accounting software, as its name suggests, is software based in the “cloud” rather than installed on your desktop or manually maintained in ledgers and journals. The software for cloud accounting is thereby hosted on a remote server instead of a server on your business’ premises. Your accounting data is sent to the cloud, processed on the remote server, and then sent back for you to access.
None of the accounting processes occur on your desktop. The application functions entirely in the cloud. This frees your business from installing and maintaining software on multiple computers throughout your company. Your accounting or HR department can access the exact same version of the software as you and access real-time data within your account.
Differences between cloud accounting and traditional accounting
Cloud accounting and traditional accounting have some key differences. Cloud accounting is much more flexible, meaning anyone who has access to your cloud account is able to crunch real-time numbers from any device, anywhere, as long as there’s an internet connection. Personnel don’t have to be at a specific computer to do their jobs. In fact, balances reflected by your entries with cloud accounting have a high level of accuracy, as far fewer errors occur in cloud accounting than in traditional, manual accounting.
Benefits of Cloud Accounting
Cloud accounting has several benefits, such as:
- Immediate transactions
Retail operations electronically enter transactions as they occur, whereas you might only enter your transactions at the end of each week or every other week, depending on the size and sales volume of your business. Small business accounting in the cloud compels you to keep your data entry current.
With cloud accounting in place, you can quickly spot a gap in cash flow or see if customers are abusing your extension of credit. Business owners who simply place all of their receipts in a drawer to deal with at a later date might not catch a potential issue until it’s too late.
You can run balance reports or expense reports and get a financial snapshot of your business at any given point. Cloud accounting software can also handle the calculations for different currencies in the event you do business with foreign companies, compensating for the fluctuations in exchange rates. It can be time- and cost-prohibitive if you or your accounting department has to crunch those always-fluctuating numbers on paper.
One of the main reasons that small business owners decide to transition to cloud accounting is that it allows flexibility of location. If your CFO wants to go on vacation but still maintain the “books,” they can continue sipping their martini under the palms while they run a revenue report. And since the majority of communication today is done with the assistance of a handheld device, it’s easier to send invoices, track expenses, record current expenses with a photo of a receipt, track billable time and even use your phone to import new clients. Not having to physically exchange journals, ledgers and receipts improves morale all the way around.
- Centralizes your most important tasks
Several aspects of your day-to-day business operations, like managing inventory, invoices, payroll, and even portions of your customer relations management can all be tied into your cloud accounting software. Save your hard-earned money – no separate software is needed.
- Simplifying tax compliance
You must remain compliant with the CRA or you can face stiff penalties. Cloud accounting software helps by showing you things like how much tax you owe (even down to specific invoices) or how much you’ve paid over time on a specific tax. Cloud accounting software like QuickBooks makes it much easier to compile the information you need to file a successful remittance.
- Analysis tools
Have you ever wondered how much easier (and more accurate) your business tasks might be if only you had a personal financial advisor? Cloud accounting apps not only give you tools to customize your own reports, they even suggest reports for you based on the type of business you own. You can make solid financial decisions when you can see the bigger picture – just like having your own advisor.
There’s a report you can run for virtually every question you have regarding your business’ financial health. Wondering which of your clients haven’t paid you yet? Run an Accounts Receivable report.
The accuracy of your numbers is crucial. There’s always the chance of a transposed number or erroneous math in manual entry accounting, but cloud accounting software does the calculations for you. And the software also maintains other necessary information, like inventory on hand, supplies on hand and which vendors you use for which products. Need to mail something to a client? Even your client’s addresses are maintained in QuickBooks Online for easy access when the need arises.
But is Cloud Accounting Right for Your Business?
From the smallest downtown laundromat to the largest Fortune 500 company, your business can benefit from implementing cloud accounting. Whether you have one employee or 1,000 – even if you are the only employee – cloud accounting software like QuickBooks can help you manage your payroll expenses, tax remittances and other business expenses.
Do you track your employees’ time, mileage or other expenses? You might need time tracking and mileage tracking software, payroll processing, or other software programs to assist you in maintaining your records correctly. The great thing about cloud accounting software is that many other software programs integrate seamlessly with QuickBooks Online, meaning all of your information is linked. If your company uses an ‘actual-minutes worked’ type of format, your time tracking software (TSheets is a good option) can integrate with your accounting software to maintain accurate payroll records. You can basically build the accounting software suite of tools that most applies to your specific business.
How Much Does it Cost?
Costs can vary greatly among different cloud accounting service providers. QuickBooks Online offers a free, 30-day trial of its online accounting software. This cloud accounting online software offers the usual browser compatibilities, plus applications for Android and iOS mobile devices. The family of Intuit QuickBooks programs has different tiers, depending on the scale of your business and what you need the software for.
The tiers include:
- Essentials, and
EasyStart is $13/mo, Essentials is $27/mo, and Plus is $40/mo after your 30-day free trial.
There are also versions of QuickBooks for the self-employed individual and even corporate-sized entities. Ready to dive in? Desktop accounting applications might be on the way out, so transitioning to cloud accounting is a smart choice now. 5.6 million businesses use QuickBooks. Join them today to help your business thrive.