In the past, accounting often meant hiring an accountant or investing in expensive accounting software and computer hardware, but the good news is — that has all changed. Fast forward to 2018 and it’s now easier and more cost effective than ever for businesses to do their own accounting. Thanks to cloud-based accounting software, you just need a laptop or your favourite mobile device, and you have a flexible, scaleable, and easy-to-use accounting solution.
In the Cloud
Cloud-accounting software runs in the cloud. When something is “in the cloud”, that just means that it’s on someone else’s servers, rather than on your computer. That eliminates your need to buy software on discs and a computer with a big hard drive to run the program. Although cloud-based software has exploded in recent years, the basic technology has been around awhile, and in fact, every time you use your email or social media account, you access information from the cloud. You can see your messages from any computer or mobile device, because they are saved on the servers of your email or social media provider. Then, you connect to that information over the internet. Of course, for your safety, cloud-based accounting software uses bank-level encryption to ensure that your data is completely secure.
What Is Cloud-Based Accounting Software?
Typically, to access cloud-based accounting software, you simply pay the provider an annual or monthly subscription fee. Then, you choose the level of service you want and go through a sign-up process. At that point, you’re on your way to accessing the many features the software has to offer.
It’s important to note that every type of cloud-based accounting software offers different services and levels of complexity. But accounting software such as QuickBooks makes it easy to do a wide range of accounting tasks with just a few clicks including the following:
- Open and access an account in seconds
- Create and send invoices
- Monitor cash flow
- Track inventory and expenses
- Get GST reports
Even better, if you’ve been doing your accounting with Microsoft Excel spreadsheets and want to switch to cloud-based accounting software, you can transfer the data to the cloud quickly and easily. Here are some compelling reasons you might consider using it.
1. Improved Cash Flow
Cloud-accounting software lets you create professional-looking invoices and send them to your clients by email soon after the purchase, even the same day if you choose. This gets rid of the practice of printing and sending invoices at the end of the month. Although there’s no guarantee, when you make it easy for your clients to pay their invoices, they may be more likely to pay their bills sooner.
2. 24/7 Access on Any Device
It’s midnight. You’re wondering if you entered a supplier bill, and a family member has your laptop watching a movie. The nice thing about cloud-accounting software is that you can grab your mobile phone or tablet, log in and check on any accounting matter you wish any time of the day or night. You also don’t have to worry about losing accounting data you forgot to save before you left work. Cloud-accounting software backs up automatically, so even if your laptop or mobile device crashes or gets lost, everything you enter into the software stays in place.
3. Team Collaboration
Most cloud-accounting software packages allow you to give access to others. If you’re working with a trusted team that needs access to some of your company’s financial data, it’s easy to give them their own usernames and passwords to log in. If you’re worried about certain team members seeing all of your company’s private financial information, don’t be. Cloud-accounting software allows you to customise access so team members only see what you want them to see. And, since they don’t need to be in the office to log onto the software, you don’t have to wait to receive valuable feedback when they’re off-site.
4. Clear Picture of Your Company’s Financial Health
If you leave accounting to others or use a manual accounting system, you run the risk of important information being left off the ledger. When you need to know the state of your company’s financial health, as you might need to when applying for a business loan, an unclear picture might cause you to miss out on opportunities. Cloud-accounting software gets you in the habit of doing everything digitally, from receiving bills to sending deposits to the bank so you have live data to show how your company is doing fast.
Here’s an example you might relate to:
Remember when you started your company, and the only employees were you and your business partner? Cloud-accounting software grows with your company so if you on-board more employees in the future, it’s easy to add them to the software’s payroll feature to ensure they’re paid on time. Also, apps that work with the software help you scale, or increase or expand, your operations. So for instance, if over the years, you collect most of your customers’ email addresses, an app that works with your accounting software might allow you to customise marketing emails encouraging your customers to buy more or refer you to their friends and family.
5. Advanced Security for Your Data
Even better than a trusty computer behind a locked door, cloud-accounting software runs on highly encrypted servers offering security that never sleeps. Software companies with programs like QuickBooks put a wide range of safeguards in place to ensure your financial information and that of your customers stays safe. There’s always a bit of a learning curve with any new technology, but thankfully, the curve with cloud-accounting software isn’t very steep. If you already use mobile devices and a laptop, you can quickly adapt to keeping up to the minute with your business’ finances and enjoy watching your profits grow.