This blog is the first of two explaining why cloud accounting is so good for businesses, whatever their size written by me, Lyra the office dog, part of the team at Rowdens Chartered Accountants.
Part 1 covers the pitfalls of desktop accounting software and goes on to list the advantages of cloud accounting. Look out for Part 2 which details how you can make the transition seamlessly and painlessly.
Don’t be tied to desktop accounting software
We're barking for joy in the world of cloud accounting!
Here at Rowdens, we love online accounting or cloud accounting as it’s also called. The folk in our firm are passionate about it and they love working with businesses who, like us, are using cloud accounting to their advantage. In fact, the only time I hear any of the team whine or even growl a bit is on the odd occasion when they are having to deal with a business still using traditional desktop software such as Sage or Quickbooks or spreadsheets for their bookkeeping.
These businesses aren’t necessarily in the doghouse as far as we are concerned because there may be very good reasons why they are still tied to the old ways but in many cases, they are definitely barking up the wrong tree!
The Growl factors of being tied to desktop accounting software or spreadsheets
I get hot under the collar when I hear about businesses who are not using online accounting software because they are wasting so much time doing their bookkeeping and accounts, time that could be better spent in other ways.
I’m sure you’ll agree that no-one goes into business in order to spend unnecessary time and resources on doing the bookkeeping! They are also missing out on lots of other advantages of keeping their books and records online. In this fast moving, online world, businesses will simply not keep up with the competition in terms of efficiency and growth, potentially struggle to keep their head above water and may even go under.
Software and hardware growls
- Access to data. Your business data is generally located on only one computer or server in the business which can be difficult to access by more than one person and is restricted to that machine.
- Hardware restrictions. Many desktop accounting software programs will only work on Windows computers and not on Macs and certainly not on mobile devices which can be very restrictive.
- Multiple data sets. It’s highly likely that your data isn’t up to date and neither is the software. There is also a risk of running multiple sets of data when backups are restored which can cause massive issues. We have known clients to be working for months on an old set of data on a desktop which only comes to light when the year end accounts are being prepared. Nightmare!
- Software updates. Keeping the software up to date with proper technical support can be expensive.
- Backups. It’s costly and complicated to keep backups and those backups can be corrupt without you knowing about it. Therefore, absolutely useless to you. Believe me, we’ve seen that happen quite a few times and it can be catastrophic to a business.
- Spreadsheets are often inaccurate and cannot cope easily with double entry bookkeeping or part payments of invoices.
Accounting and bookkeeping growls
- Visibility of reports and data. In our experience, financial reports produced by traditional desktop software can be hidden and the majority of business owners can’t make head or tail of it.
- Bookkeeping time and resources. Bookkeeping can be time consuming and tedious and will often require a bookkeeper actually in your office, taking up time, a computer and other resources.
- Hard to correct errors. If there are mistakes made in the bookkeeping, they can often be difficult and time consuming to correct.
- Out of date data. Your accountant is having to work from backups or reports of historical data which are usually out of date. While this may satisfy the taxman, it is often of no help to you in actually running and developing your business.
- Filing and storage. Desktop software and other traditional accounting and bookkeeping methods tend to generate files of paper records which need to be stored and if you need to find something, it can be it can be hard to retrieve.
The advantages of using cloud accounting software
Conversely, running your business in the cloud gets rid of all the above disadvantages and has me wagging my tail and leaping about.
- Anytime, anywhere from any device. The cloud enables you to access your software and data online at any time and from anywhere, from any device. It doesn’t matter whether you are a Windows or Mac user or using a mobile device. Your device is simply a means to login to the internet portal.
- Monthly subscription. Upfront business costs are reduced. You simply pay a monthly subscription which eases cashflow.
- Online bank integration. Online software can integrate with your bank account, improving accuracy and saving a lot of bookkeeping time.
- Sophisticated software stack. Online software can integrate with a whole eco-system of add-on apps. This means that even a small business can have access to and afford some very sophisticated software to help them run their business efficiently and effectively. Traditionally, this type of software was only available to much larger businesses at a prohibitive cost.
- Real-time data. You can have a clear overview of your financial data in real-time.
- Multi user access to the same data makes it easy to collaborate with your advisors and your colleagues. This does away with your accountants having to prepare financial reports from outdated backups. They can work with you online and in real-time making their input and advice so much more valuable to you.
- Automatic backups and instant updates. Everything is run online so there is nothing to install and everything is backed up automatically. Updates are free and instantly available.
- Cloud security is world class although I would check this with the individual software provider. If you already use internet banking, then you are already using cloud software. Being in the cloud also means that your information is securely stored offsite in the event of theft, fire or flood etc.
Want to know more about the advantages of cloud accounting? Read Part 2 of this blog. I’m now off for a well-deserved treat, hidden somewhere in the Rowdens’ office!
Bye for now and thank you for reading!
Lyra
