Pandemic has changed the way the world has been working. The companies made a shift to cloud-based services to enable remote working. From project management to accounting, many things were done via cloud-based services, resulting in increased use of cloud accounting software.
Cloud accounting is an emerging trend that is bringing in a significant change in the way companies does accounting. Organisations, especially start-ups, are benefitting a lot from cloud accounting. There is no need to install any expensive software or hardware, for that matter.
Everything is done online, on computer systems or phones, making it easy and flexible. Cloud accounting has become an integral part of organisations lately, and this article will help you know a lot more about it.
○ Cloud accounting- what is that?
○ Benefits of cloud accounting
○ Cloud-based accounting software for small businesses
○ Wrap up
Cloud accounting- what is that?
For ages, bookkeeping has been done on paper and later evolved to Excel. But, now the times have changed. Technological advancement impacted the accounting function too. The entire bookkeeping can be done online from anywhere at any time with bookkeeping software.
It is called cloud accounting. The best part about this is that you don’t have to worry about losing your data because of computer malfunction, fire or storm. Everything is stored in the cloud and is accessible on any device with an internet connection. It is an absolutely safe and secured method for bookkeeping.
With cloud accounting in place, start-ups don’t have to break their bank anymore. As everything is done on the server and stored online, there is no need to invest in hardware. The software comes at an affordable price, making it a cost-effective option too.
Cloud accounting brings many benefits to the table, which has made it a go-to option for start-ups lately.
How does cloud accounting work?
It is quite simple. You just have to choose and subscribe to reliable cloud accounting software. After subscribing, upload all of your bank statements, bills and invoices and reconcile. Your bookkeeper can do this by sitting a thousand miles away.
Now, you can either use a web browser or software app to access your books. Most businesses connect the software to their bank accounts to fetch all transactions as they occur to facilitate cash flow tracking.
Benefits of cloud accounting
Businesses are benefiting from automation lately, and involving yourself in mundane accounting tasks doesn’t seem like a good idea anymore. Investing in the right software to take care of all of your accounting tasks is always a good idea rather than spending a lot of time and effort.
In today’s business, automation has become an indispensable tool. You can focus on the core business rather than worrying about any other task. Bookkeeping, tracking the cash flow on a daily basis will surely take a lot of your time. However, the software will automate all these tasks once you connect to the bank, making it easy to track and organise.
Collaborate and work
Cloud accountants can easily collaborate and work online from anywhere. The software makes it easy for everyone to access the ledger. Don’t worry; this is safe, and one can access your account with valid credentials only.
Bookkeepers, accountants, payroll operators, accounts team, owners, investors and lenders. All can view your books online.
You can collaborate and work with your team using cloud-based accounting software.
The cloud accounting software is very flexible and can be integrated with other software you use in your business. You can integrate the software with your existing accounting system and import all of the data to it.
Apart from that, this software comes with open APIs, which means they can work with a range of third party APIs and tools. From project management software to the invoicing tool, you can use the APIs and integrate your software seamlessly.
The best benefit of this is that you will have all of your data in one place and working around the data becomes easier than ever this way.
Use tools like Zapier to integrate with third-party apps.
Live feed from bank
This can be considered as one of the most important benefits of cloud-based accounting. You can link accounting software with your bank, and it will fetch each transaction automatically. This will eliminate the need to enter each transaction or upload the CSV file directly into the software.
The live feed will pull all the data from your bank account after the transaction happens. This way, the cash flow will be up to date, and you can check it whenever you want.
Accounting at your fingertips
Usually, cloud-based accounting software offers different options to access it. You can view it in the browser or download the app on your phone. This will give you the feasibility of using the app from anywhere at any point in time.
Safe sharing of data
Data transfer is critical when it comes to accounting. You can grant access to the ledger directly for your accountants, bankers or any other person with whom you want to share. There is no need to use any memory sticks or emails either.
The one thing that will linger through anyone’s mind when they hear about cloud accounting is how safe their data is in the server! Trust me; it is so much secure when compared to being stored in your hard disk. The cloud servers are safe, and no one can access them without authorisation.
Even if something happens to your system, mobile, you don’t have to worry about your data being lost or, even worse, exposed. No one can check the details without your authorisation, and this is a great way to keep your records safe. You can also control the access level of other users.
Most software use two-factor authentication (TFA) in addition to just a user name and password.
Zero maintenance cost
With cloud-based accounting, you save huge on maintenance costs. It doesn’t need any specific hardware and can be operated online; it doesn’t require any maintenance. Just update the app or software from time to time, and you are good to go.
Cloud-based accounting software for small businesses
There are many reliable accounting software available in the market for small businesses. We are listing a few here for you.
Quickbooks is specially designed for small businesses and self-employed people. Quickbooks offers a myriad of features that one can explore. There are different plans available with Quickbooks, and you can choose the right one that goes according to your small business needs.
You can file the tax returns digital with Quickbooks. It also offers payroll services, pays bills and send invoices. Connect it with your bank account and track every expense you do with ease.
Sage is a popular and most used bookkeeping software in the U.K. Its desktop version was a go-to option for businesses and accountants back in the day. With the latest advancements in cloud-based software, Sage ventured into the same. They now provide accounting software solutions on the cloud, making it easy for organisations to work around.
Sage has two plans- one basic plan for small businesses and another one for established organisations. Right from creating invoices to providing real-time reports, Sage does it all.
It also has a mobile app with which you can access the majority of its features and link your bank account simultaneously.
Free Agent is aimed to offer better and easy accounting solutions for the small businesses out there. This software has three plans that are designed for different business setups- sole trader (self-assessment filing), Partnership/LLP (profit sharing calculation), Limited company (corporate tax forecasting, self-assessment filing, dividend vouchers).
You will also have a chance to track your time, manage the expenses, payroll activities and connect the software with your bank account too. They offer a free trial which can help in knowing how the software works.
Xero provides smartbookkeeping software. Xero is completely cloud-based and offers reliable security for its users. With Xero, it is easy to file tax returns on your own.
The best thing about Xero is that it will assist you in the automation of everyday business tasks. You will also stay up-to-date with your financial information. As it is cloud-based software, you can access your account from anywhere on any device without any hassle.
Easing the way you do business and making most of the technology is the need of the hour. It is time to ditch the age-old accounting techniques and adapt something new, cost-effective and time-saving method- cloud accounting.
There was a time when people resisted internet banking and thought it wasn’t safe, but now everyone is used to it. Cloud accounting is similar. People who don’t know the kind of benefits it offers may resist it at first, but it will be the future of accounting very soon.
The demand for cloud accountants is increasing, and most start-ups and established businesses will opt for it only.