Aug 2020

Cloud Accounting

Stat of the article 

According to the Small Business Report, 60% of small business owners feel that they might not have enough knowledge about finance and accounting.

My History with cloud accounting

A few years ago I attended a conference in the States organised by one of the cloud based bookkeeping software providers.  My five star trip took me from Heathrow to San Francisco and from there to San Jose.  Whilst there we visited Silicon Valley, saw the Goo Goo Dolls in a private concert and visited the Levi’s American football stadium.

The whole conference was incredibly stimulating and gave me the opportunity to spend time with and learn from like minded accounting specialists. They hailed from across the globe and included leading thinkers from the UK. The points made then are increasingly relevant today!

There were two sessions, of the many I attended, that really resonated with me.  They were two of the most engaging speakers in Sekou Andrews and Oprah Winfrey.

Sekou is a poetic speaker in the US but his message is relevant to all SME owners making the point that they cannot be “everything” to their businesses.

The other was Oprah Winfrey who, I am sure, needs no introduction and her point is that of “intention”.  She says that everybody you engage with has their own agenda, in order for this to be mutually beneficial you need to understand each other’s intent.

The future of cloud accounting

Keeping in line with Oprah’s thinking, my intention is to highlight the benefits of cloud software and how it can assist you and your business.

As a Small business owner you need support with your business especially as we start to emerge from this current world crisis.

I would encourage you to consider sharing some of your responsibility with a trusted partner who may be better equipped to perform certain tasks.  According to Smallbiztrends, 86% of small business owners feel that their accountant is a trusted advisor.

There is a lot to be said for letting the best person for the job fill the role.  One of the statistics coming out of this seminar was that your small business is more likely to succeed if you have an accountant on board. Behind every good business is a team of supportive advisors as Sekou says you cannot do it all!

I have invested the time to research and delve into the pros, and cons (of which I found none), of the benefits cloud accounting brings to your business, so you don’t have to.

Benefits to you

Collaboration

One of the biggest benefits of cloud based software is the collaborative relationship it allows small business owners to have with their bookkeepers and accountants. This provides you, as the business owner, with support as and when you need it.

Only 21% of small business owners contact their accountant more than once a month. Cloud accounting would enable us to make contact when you need and provide daily bookkeeping. The latter being a key feature of my practice.

Data Entry

Most cloud based systems draw information directly from your bank meaning there is a seamless transition as well as improved accuracy.

This can be supported by additional software to assist with various tasks such as processing purchase invoices. This saves the need to manually enter data which is more efficient and will lead to increased consistency of entries.  It also allows your team to be more productive as they are not spending their time entering data unnecessarily.

Real time

Bookkeepers and accountants are able to offer you support and advice based on real time information. Replacing the reliance historical data many business owners are accustomed to receiving from their trusted advisors. This enables more efficient credit control which impacts on cash flow and improves information on which to base decisions.

Forecasts, Budget and Cash flow

Based on this information we can work together to construct forecasts, budgets and cash flows which enables us to create “what if situations” going from worst to best case scenarios. These can be based on your historical data and updated or worked from scratch.

In the current climate, this gives valuable information to you as a business owner who can use it to make informed decisions.

Access

You can access the information from any device you choose, be it your phone, tablet, laptop or PC. This gives the ability to access crucial information anywhere at any time in an easy to digest format.

No need to add to infrastructure

There is no initial outlay nor the need to upgrade your hardware because everything works through the internet and cloud applications.

Utilising this software will not require additional expenditure on infrastructure or downtime for system upgrades.  It also provides a single source of truth in a ledger that all interested parties have instant access to.

87% of companies have felt an acceleration in their businesses by incorporating cloud in their business processes (McAfee Report).

Conclusion

Cloud accounting allows for more efficient data entry saving time, which as we all appreciate is the most valuable commodity.

Summary of benefits

  • It provides an opportunity for more collaboration with your chosen advisor
  • Draws data straight from your bank
  • Automatically provides real time information giving you accurate financial data at your fingertips.
  • Makes forecasts, budgets and cash flows more realistic therefore giving better insight into potential outcomes
  • Ability to access on any device with an internet connection
  • No additional expenditure on your business infrastructure, all you need is technology you already have!

To quote Mark Twain – “a great way to accelerate progress is to learn from the mistakes of others, so you can avoid those mistakes, and go make new ones!”.

We learned from the mistakes of using outdated, unsuitable and sub par software and look forward to discussing your individual business needs with you.

 

#cloudaccounting #digitalaccounting #futureofaccounting