WHY CLOUD ACCOUNTING IS SHAPING THE FUTURE OF BUSINESSES

By Martin Bown, Founder and MD of My Management Accountant, a leading Yorkshire-based cloud accountancy practice

In an increasingly digital age, more and more businesses and services are adapting to become fully functional online, with the ability to store all forms of data in a central cloud service continuing to become more prevalent.

Nowadays, the uptake for complete cloud infrastructure is massive, with more than a third (36%) of European enterprises adopting this approach last year alone1 and this integration is expected to climb further.

Cloud accounting has had a huge impact, completely streamlining the way businesses manage their finances, but what exactly are the benefits to adopting cloud-based accountancy?

Martin Bown

 

Accessible and reliable

Using the cloud to manage your accounts gives you instant access to your financial data from anywhere, be that on a laptop, desktop or mobile phone.

Having access to such information at your fingertips allows you to complete tasks such as paying bills, preparing quotes, sending sales invoices and taking payments remotely, allowing you to stay on top of things even whilst you’re working away from the office. This is something that is a huge benefit given how many companies have adopted long term hybrid working weeks.

By contrast, if your business is reliant on dedicated software, managing these accounts would likely be limited to the use of a specific desktop computer which hosts the software, with typically only one individual able to access it at any given time.

Not only does the cloud make accounting more accessible and efficient but it is also notably more secure. All cloud servers are continuously backed up by the server hosts and monitored around the clock to ensure that manual back up copies of files and fail safes against failures in specific software programs are not needed.

Furthermore, the scale of such cloud servers means that they are far more reliable; there are rarely, if ever, issues with unscheduled downtime. As a company that has exclusively used Xero Online Accounting software for the last ten years, the number of issues we’ve experienced have been negligible, which gives us peace of mind that we can provide a continuous and reliable service for clients.

 

Adaptable and flexible

Cloud infrastructure, by its very nature, connects different stakeholders together in a way offline, dedicated software simply can’t. With members of the business or even independent accountants all able to access the same central point on the cloud, everyone has access to the same version of the software and live documents, which eliminates duplication of work and minimises any miscommunications at the same time.

The fact that cloud accounting software also gives you the option to connect to your bank account feed enables you and the accountants to track real time financial information about the business, allowing you to forecast and adapt your potential spend or investment as you go. This type of adaptability has become a crucial characteristic of a lot of businesses since the start of the Covid pandemic.

Cloud accounting provides a basic software suite for you to complete all tasks related to financial management but is adaptable and gives easy access to more bespoke services, depending on what you need to use it for.

Whether you require access for clients and staff all in one place, a place to manage compliance workflow or even ledgers for smaller businesses, the variation is easy to integrate all through the power of the cloud.

Looking at cloud accounting flexibility a little more closely, there are also a number of different software add-ons you can utilise at the drop of a hat to enhance your user experience further and make the process even more efficient.

Features such as Dext for auto-entry will allow you to upload images of items like receipts or supplier invoices, with the software able to extract the data in a fraction of the time of manually inputting it, whilst apps like Stripe and GoCardless are cost effective solutions to provide your customers with ways to pay you.

What’s particularly beneficial is the fact that you are able to choose which add-ons suit your business, preventing you from paying money unnecessarily on comprehensive packages you often won’t utilise.

 

Costs and value for money

The practical application for cloud accounting is seamless but it is also cost effective. Making use of a cloud entity has everything in one place without having to pay huge fees to buy individual pieces of software or engineering to install, update and maintain them.

As an example, Xero has a monthly cost of just £26 for the standard version, which grants access to unlimited users. This is a stark contrast to services used by clients we’ve transitioned previously.

From supporting one business to start utilising the cloud, they made significant savings, having previously spent a staggering £10,000 a year on their software license, a fee that was subject to increase based on the number of users, further outlining the value for money that cloud accountancy software gives you.

One thing is for certain is that as pace with which cloud accounting continues to evolve, the accessibility and reliability of cloud-based services is becoming too big to ignore. I anticipate that as cloud software continuously improves, this method of accounting will become a mainstay in the majority of business sectors for a long time to come.

 

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