Should you put your business accounts in the cloud? This is a question many small businesses are considering. For years small business owners have relied on accounting software, spreadsheets and physically storing our data in filing cabinets. However, times have changed and if you want to minimise costs and improve your efficiency then you should consider cloud accounting. This is something most chartered accountants will advise for those businesses too small to warrant an investment in expensive servers and accounting software systems.
But just what are the main advantages associated with cloud accounting software?
First and foremost, it is essential to clarify the limitations of the traditional approach to accounting.
These are as follows…
- It’s time consuming and complicated, which results in inefficiencies.
- It can be costly. You have to purchase hardware and you’ll undoubtedly face upgrade costs at some point.
- Your system won’t always be up to date.
- To upgrade the software will take time, effort and money.
- Customer support can be slow.
- Keeping back-ups can prove to be difficult and costly.
- Access to software can be challenging, as many traditional software packages are restricted to one computer.
Instead, cloud accounting proves to be a much more efficient solution. Cloud accounting simply means that your software and data is stored in the cloud, i.e. remote servers, as opposed to your own hard drive. There are many benefits to be gained by going down this route. Firstly, you can access your accounting system no matter where in the world you are. All you need is an Internet connection. This is especially beneficial for professionals that travel regularly and require access to data.
Cloud accounting is also much more reliable. Everything is stored on the Internet, on professionally managed servers, which means you are less susceptible to a disaster. Consider what would happen if your own hard drive failed? You could lose all of your critical data. Perhaps you have a disaster plan in place, but keeping back-ups is challenging and expensive.
This is also a much more cost effective approach to record keeping for self-employed small business owners, which is especially good news for those recovering from a prolonged recession. When it comes to cloud accounting you will pay a set fee per month so it is much easier for you to manage your expenses. If you stick to traditional forms of managing your accounting, you would need to pay a significant amount upfront for all of the hardware and then you will face more costs along the way. Cloud accounting also makes it easier for you to share data with your accountant and if your accounting firm also offers a fixed fee accounting service it will be even easier to budget for your annual costs.
It is also worth pointing out that you will always have the most up to date software if you opt for cloud accounting, as the system will be updated regularly without any disruption or cost to you. Given the increasing number of security threats around to businesses of all sizes this is a definite bonus.