If you ask entrepreneurs and small business owners why they started a venture, they would probably say something along the lines of, “I want to be my own boss or I want to follow my passion and make my vision come to life.” Rarely would you hear one say that he would like to spend hours on end dealing with accounting and bookkeeping?
Unfortunately, this is a reality for many SMEs and so, some end up spending a huge chunk of time and money cleaning up books or purchasing and implementing an expensive software.
Fortunately, there exists an ever-growing ecosystem of cloud accounting solutions and services that can manage invoicing & collection of bills, tax & compliance, online bookkeeping, and even budgets & financial planning. By embracing cloud accounting service, you can simplify these processes and have more time to focus on growing your business!
What are cloud accounting solutions?
Simply put, it’s computing based on the internet. Where in the past, people would run applications or programs from software downloaded on a physical computer or server in their building, cloud computing allows people access to the same kinds of applications via the internet.
When you update your Facebook status, you’re using cloud computing. Checking your bank balance or credit card score on your phone is via the cloud. Chances are you rely on cloud computing to solve some of the many challenges faced by small businesses, whether you’re firing off emails on the move or using a bunch of mobile apps to help you manage your workload real-time.
In short, using the cloud is fast becoming the new normal in your day-to-day life. So, why are so many businesses moving to the cloud? Cloud computing increases efficiency, helps improve cash flow, time tracking, it saves time, and offers many more benefits. Here are the advantages of cloud computing:
Smarter business decisions
As a business grows, it becomes more and more crucial to make informed decisions with a clear and updated view of the financial position of your company. Through cloud accounting technology and services, you can have updated and frequent financial statements to base your strategic decisions on.
Improve your financial accuracy and controls
Most of the cloud-based solutions propose functionalities that can truly help businesses improve their financial controls. For example, bank reconciliation can be simplified by connecting your bank account or uploading your bank statement and having your accountant match your entries with actual bank transactions.
Efficient and simple
With the right process and expertise, cloud accounting solutions can be implemented for a fraction of the time (and cost) of traditional accounting software. Once the onboarding is completed most functionalities are oriented towards the end-user, making it as easy as possible to master.
Cloud solutions ensure that all your financial information is always updated and available online. This allows you, some of your employees, and your accountant to collaborate more efficiently, and answer key questions remotely and in a faster way.
As financial data is stored online, there is no need to have regular back-ups. Your information is indeed more secure online than on-premises where hardware malfunction could lead to data being lost or corrupted.
Lost laptops are a billion-dollar business problem. And potentially greater than the loss of an expensive piece of kit is the loss of the sensitive data inside it. Cloud computing software solutions give you greater security when this happens. Because your data is stored in the cloud, you can access it no matter what happens to your machine. You can even remotely wipe data from lost laptops so it doesn’t get into the wrong hands.
The beauty of cloud computing is that the servers are off-premise, out of sight and out of your hair. Suppliers take care of them for you and roll out regular software updates – including security updates – so you don’t have to worry about wasting time maintaining the system yourself. Leaving you free to focus on the things that matter, like growing your business.
Companies who develop cloud-based solutions such as Quickbooks Online or Xero keep innovating and finding smarter ways to benefit SMEs. Once you subscribe to one of them, you will have constant access to the latest version. This eliminates the need to pay for an expensive upgrade of a traditional software every time something new comes up.
Competitive pricing and flexibility
Pricing for cloud accounting software is transparent and competitive. Such services propose monthly fees instead of big, one-time fees and most of them can be cancelled anytime.
Integration for an end-to-end solution
Cloud-based accounting software offers off-the-shelf and easy-to-implement integrations that allow you to complete your end-to-end process and tailor your ecosystem to your business. These could include payment gateways such as Paypal and procurement and inventory management systems such as Unleashed.
Achieve a competitive advantage
Wish there was a simple step you could take to become more competitive? What about web-based and enterprise-class technology, for everyone? Moving to the cloud gives you access, and allows smaller businesses to act faster than big, established competitors.
A pay-as-you-go service and cloud business applications mean small outfits can run with the big boys and disrupt the market while remaining lean and nimble. David now packs a Goliath-sized punch.
Do your bit for the environment
While the above points spell out the benefits of cloud computing for your business, moving to the cloud isn’t an entirely selfish act. The environment gets a little love too. When your cloud needs fluctuate, your server capacity scales up and down to fit. So you only use the energy you need and you don’t leave oversized carbon footprints.
Improve document control
The more employees and partners collaborate on documents, the greater the need for watertight document control. Before the cloud, workers had to send files back and forth as email attachments to be worked on by one user at a time. Sooner or later, usually, sooner, you end up with a mess of conflicting file content, formats and titles.
As even the smallest companies become more spread out geographically, the scope for complication rises. When you make the move to cloud computing accounting system, all files are stored centrally and everyone has one source of the truth. Greater visibility means improved collaboration, which ultimately means better work and a healthier bottom line.
It’s clear that cloud accounting is an attractive option for being on top of your financial management, financial reporting, income and expenses; and there is a whole slew of other reasons on why it is beneficial to SMEs. Since each business is different, the transition to cloud-based processes may seem intimidating at first. But with the right expertise or partner, those benefits can quickly materialize.
Here at Lumos, we try our best to create sustainable solutions. If you are in need of a cloud accounting solution, contact us and let us help you today.