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 small business accounting and bookkeeping?
Unfortunately, this is a reality for many business owners of SMEs and so, some end up spending a huge chunk of time and money cleaning up books or purchasing and implementing expensive accounting software.
Fortunately, there exists an ever-growing ecosystem of cloud accounting solutions and services that can manage invoicing, collection of bills, tax as well as compliance, online bookkeeping, and even budgets & financial planning. By embracing online accounting software, you can simplify these processes and have more time to focus on growing your business!
What are Cloud Accounting Solutions?
It turns out having your head in the clouds isn’t such a bad thing. In fact, it could be the best thing if you own a business or manage IT operations. We hear a lot about how information is being stored, accessed and analyzed using cloud-based technology these days. Most of the entertainment we consume and the messaging platforms we stay in touch with are powered by cloud-based technology.
That movie you watched at home last night and that email notification you just received on your phone probably both came through a cloud. We all already use cloud-based systems in our everyday lives. However, that doesn’t make cloud-based technology any less mysterious for the average person. What exactly is the cloud?
The average small business owners might be confused about what a cloud accounting software, as well as computing, is and why they need it. However, there is no question about the fact that every business does need it, especially for financial management.
Time, money and manpower can all be saved when online accounting software is used.
Simply put, it’s online accounting and computing. Where in the past, people would run applications or programs from software downloaded on a physical computer or server in their building, cloud accounting and computing allow people access to the same kinds of financial management 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 a online accounting software 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.
Cloud computing in a nutshell
What are people talking about when they refer to cloud based accounting and computing? Cloud computing is a means of delivering essentially any type of computing service using the Internet. It umbrellas servers, Cloud-based computing and online accounting software helps with security and accesses many types of online and computer data. databases, software, storage, networking, analytics and more.
All that small businesses need to take part is an Internet connection. You probably already have that covered. That means that all of the files you are storing and the systems you are running using clunky servers can be transferred to a platform that can be accessed around the clock from anywhere. Entering the cloud is like removing any tethers that were holding your team back from working and communicating from anywhere.
How can a cloud based accounting software help you?
The sky is really the limit when it comes to cloud computing and other online accounting software. So many aspects of small business accounting and operations can be handled using cloud-based technology. For instance, developers can create new apps and services on any platform using resources that ensure that all compliance requirements are being met. Cloud-based computing also makes it easy to test and build applications for your company.
We provide help with small business accounting software for all security, apps, business data and more. Many companies enjoy a big reduction in both the cost and time required to develop applications once they upgrade to the cloud. It’s also possible to use the cloud to protect data during transfers.
Users can seamlessly share information from any device or location knowing that everything is being safeguarded. The brilliant connectivity doesn’t end there. Users with cloud access can stream audio and video from anywhere and at any time. Groups of users can also access the same content at the same time. Imagine what that could do to boost the impact of your meetings.
It’s important to not skip over the ways a cloud-based infrastructure can make it much easier to analyze data. This is especially true if you’re struggling to get a full picture of your data across several teams, offices or divisions.
Cloud-based computing enables you to unify data and use all of the information you have to make smart business decisions based on the insights that have been captured. It will all be right there in front of you. Your company is falling behind if you’re not already tapping into the analytical power of today’s technology.
Why is cloud accounting solutions good for business?
How does cloud computing look in the business landscape? A cloud-based setup can simply be used for data storage, networking and small business applications. In addition, a cloud-based system can be customized to use machine learning to aid in decision-making processes across an organization. What you are doing when you switch to a cloud-based system is essentially unbinding your team from the need to stay close to computer hardware.
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:
There’s a common misconception that in order to use cloud based accounting software, you need to be the best accounting wiz out there — but that’s not true. Providers of the best accounting software know that most small businesses or most small business owners are not that well versed in accounting.
That’s why they strive to make online accounting functions such as cash flow management, inventory management, bank reconciliation and more, user friendly. These accounting programs help small business owners save time and money with easy to use and cost-efficient solutions.
You no longer need to worry about accounting management when you have an accounting system that takes care of itself.
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, all thanks to its real time features!
Improve your financial accuracy and controls
Most of the best accounting software 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.
Pay-as-you-go professional services 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.
Are cloud-based solutions actually safe for small business accounting?
Modern technology has done a lot of great things for cloud-based accounting. But despite this, the concern of safety and security remains. Over recent years, we’ve seen major ventures with the utmost security measures be hacked within minutes. And while it’s true that a large majority of small businesses are transitioning to online accounting and other web-based software, business owners remain to wary of security breaches.
So in hopes of answering your question, we’re going to debunk some of the more well-known myths around cloud based software, starting with data breaches!
Despite the misconception that a web based accounting solution is more prone to data breaches simply because it’s easy to use and easy to access, such accidents are actually rare for small businesses. The recent security breaches reported were not web based — as a matter of fact, they were internal breaches. Meaning financial data were accessed from an internal network, and not online.
Just because most financial software applications are easy to use doesn’t mean it can easily be accessed by random internet users. The best accounting solutions provider ensures that your data entry stays encrypted and safe, regardless of where you are. Besides this, their team of experts take the time to train your people with the best practices of keeping financial reports and other accounting data safe. And like we’ve mentioned earlier, ensuring the security of general ledger, bank account and cashflow information are one of the major reasons why business owners take the time to invest in user friendly accounting programs and solutions.
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 cloud accounting solutions for small business is beneficial. 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 cloud solutions for accounting firms, contact us and let us help you today.