Moving to cloud accounting software won’t be the most important decision you will ever make for your business. But it will set the tone.
Why Cloud Accounting Software
Moving into the cloud sounds complicated and high up in the sky. How can software ‘live’ up there?
It doesn’t. Cloud is just another word for somebody else’s server. It just means that the software is no longer stored on your but their server.
Think of online banking. When you log into your bank account, you really log into the bank’s server. And the same is true for your cloud accounting software: When you log into your account with Xero, you log into Xero’s server (or server space Xero rented).
Is it safe? It is as safe as online banking. So for most of us that is safe enough.
Here are 8 reasons why cloud accounting software might save you time and money.
# 1 Bank Feeds
Bank feeds are a blessing. They are the single most important reason why you should move into the cloud. Once set up you will never ever have to key or manually upload your bank transactions again. It is all there.
# 2 Bank Rules
Bank rules will also save you time. You set a rule how you want a certain transaction to be booked. And then the software does this for you every time.
Bank rules work well, but not as well as they could. When you consider what is technically possible with AI and the lot, this could already work so much better. But even in its current clunky version still a plus.
All providers offer bank rules – just give it a different name (would be boring if they all agreed on common terminology).
# 3 Software Updates
You no longer need to load new software onto your computer or struggle with different versions or upgrades. Your software provider seamlessly takes care of all that behind the scene.
# 4 Monthly Fee
You no longer have to put a big chunk of money on the table to get your software package. You just pay a monthly fee which is much easier on your cash flow.
# 5 No Lock In
You can switch from one software to another within minutes or hours. All cloud software providers offer the transfer of data to another provider. And all usually let you go by the end of the month if that is what you want to do. There are no lock ins anymore.
# 6 Access from Anywhere
You don’t need to be at your computer to see what is happening in your business. You can check your data from anywhere in the world.
# 7 Connect With Others
In the cloud you can directly send and receive invoices through your accounting software (at least some), if your customers or suppliers use the same software.
# 8 Backups
If your computer catches a bug, you rely on your backups and if you don’t have one, you are stuffed. In the cloud you don’t worry about backups. Your software provider does.
Changing from a desktop solution to cloud accounting software is a hassle. Why change when you know what you are doing and it works as is? Here are three reasons that count against the move.
# 9 Uploading Past Transactions
Most bank feeds only go back for a certain period of time or a certain number of transactions. Going further back than that you need to manually upload what is missing. The way to avoid this is to start or switch as of the 1 July (or the first day of your accounting period).
# 10 Only Works Online
Once you are in the cloud, you can’t see your numbers when you are offline. You need to have an internet connection to see your numbers.
# 11 Limited Functionality
Cloud accounting software will cover the needs of most small to medium business but doesn’t cover more sophisticated solutions like sophisticated stock management systems. For those you often have to use a hybrid solution. But this is changing fast. Most software providers are looking into cloud solutions for their products.
So this is our homage to the cloud. A huge step forward.
Got stuck? Please email or call – we love to hear from you and will try to help.
Disclaimer: Tax Talks does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.
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Last Updated on 14 November 2019