7 Benefits of moving to cloud accounting

It's time to consider upgrading your accounting system to cloud accounting if your accounting team or bookkeeper is still using desktop software or spreadsheets.

Cloud-based accounting offers many benefits over on-premises solutions that could help you and your business save time and money.

However, many small businesses are yet to make the switch.

What is cloud accounting?

First, let's quickly go over what cloud-based accounting is.

Cloud accounting software is hosted on remote servers rather than your local computer network. This allows you to access it anytime, anyplace, and anywhere provided you have an internet connection.

Some common examples of cloud accounting software include:

• Quickbooks
• BrightPay
• Xero

What are the 7 main benefits of moving to cloud accounting?

There are many benefits that cloud-based accounting offers against on-premises solutions.

Seven of the top benefits include:

Data Security

When you store your data in the cloud, it's hosted on remote servers rather than your local computer network.

This means that your data is less likely to be lost or stolen since it's not kept on a physical device that could be damaged or accessed without authorization.

Cloud accounting software also offers enhanced security features like two-factor authentication and password protection that make it difficult for unauthorized users to access your data.

Furthermore, cloud accounting solutions are often backed up by redundant servers, meaning your data is more secure than if it was stored on a single server - there's no danger of losing important data if a laptop is stolen or damaged.

Compliant With Making Tax Digital

HMRC's Making Tax Digital initiative requires businesses to keep digital accounting records.

Cloud accounting software is fully compliant with HMRC's Making Tax Digital initiative, meaning you can rest assured your business is meeting all the necessary requirements.

Plus, cloud accounting solutions make it easy for your accounting team or bookkeeper to submit your tax returns online, so you can avoid any penalties from HMRC.

One single source of truth

Storing your accounting data in the cloud means you're always working with a single source of truth.

This is unlike on-premises solutions where your accounting team or bookkeeper could be working with partial information that's manually entered into multiple spreadsheets without being reconciled.

With cloud accounting, you always have the most up-to-date version of your data. This means there are no discrepancies between your accounting records and any other versions that might exist.

Integration with other business tools

Cloud accounting software is often compatible with other business tools like your Customer Relationship Management (CRM) solution, Enterprise Resource Planning (ERP) solution, or Human Resource Management (HRM) tool.

This enables your accounting team or bookkeeper to automate many time-consuming tasks.

For example, cloud accounting solutions are typically integrated with online payroll systems to automate the calculation of employee paychecks. This means your accounting team or bookkeeper no longer needs to calculate hours worked manually.

Accessibility

Since cloud accounting solutions are web-based, you can access them from virtually any device with an internet connection

This enables your business to adapt quickly to changing circumstances by allowing employees in different locations or working on different shifts to access your data whenever they need it.

Going paperless

Cloud accounting software can be configured to receive and store electronic versions of receipts and invoices, and also to send invoices to clients via email.

In addition to helping reduce the environmental impact of your business, your data is also more secure since it's no longer stored on paper, which could be easily lost or damaged.

Real-time reporting

With cloud accounting, you're able to access real-time reports about your business and financial performance, rather than having to wait for weeks while data is reconciled.

This enables you to have the information to make critical business decisions more quickly.

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How do I get set up with a cloud accounting solution?

The first step is to speak with your accounting team or bookkeeper to get their views on moving to a cloud-based accounting solution.

There are a variety of cloud accounting solutions available, but it's important to choose a cloud accounting solution that meets your specific business needs and is compatible with the other tools you use in your business, like your CRM and HRM solutions.

Once you've signed up for your chosen cloud accounting solution, it's important that all users are trained on how you use the features of the platform that are relevant to their role - but don’t worry, the majority of cloud accounting tools are intuitive and easy to use.

Then it's time to start uploading your data, and start to enjoy all the benefits of your cloud-based accounting solution!

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If you need impartial advice about moving to cloud accounting, we'd love to help. Please contact [email protected] for a confidential chat.