What is Cloud Accounting and Why it’s Essential for SMEs in 2021

Cloud accounting, sometimes known as online accounting, is a necessity for both accountancy practices and accountants in business in 2021. Xero’s cloud accounting software gives you the ability access to your finances 24 hours a day, 7 days a week. 

At Steele Financial we work with Xero’s software to get rid of loose pages and keep accounting simple. Working with Xero means we can streamline the accounting process to make running your business easier.

Instead of storing mountains of paper until tax season, you can keep all your business books online with Xero. Sounds simple? Or maybe you’re still asking “what is cloud accounting?”. In this article, I will explain all and tell you why you need to upgrade your bookkeeping in 2021 to a cloud accounting service.

What is Cloud Accounting?

Online accounting isn’t a completely new concept. For example, all your mobile-banking information is stored online. Likewise, with cloud accounting, all the information is stored in the same way, in the cloud. To put it simply, Xero keeps all your data stored online. 

Xero tracks your income, expenses, assets and liabilities behind a protective layer of encryption. Encrypting your data is vital so that only people with the password can access your information. 

With Xero, you have the ability to also connect your online accounting with your business bank account’s online banking. This automates a long and tedious aspect of the bookkeeping process, giving you more time to focus on your business. You’ll be rescued from hours of data entry and instead, left with accurate and up-to-date books that are accessible from your phone!

Why you need Cloud Accounting

A lot of businesses, from SMEs to large enterprises, have been using cloud accounting software for quite some time, however, some are yet to be convinced. 

There are endless reasons to switch from paper to digital, despite this there are still loads of businesses who don’t use cloud accountants. Although some businesses still use desktop accounting software, this is still second to Xero. 

Save Time with Xero Cloud Accounting

The days spent inputting data are long gone, and even longer gone are the days of physical books and paper. You can use cloud accounting software from anywhere, even your phone. Xero will bring your business into 2021 by shredding all those loose receipts and pages.

Time is one of our most precious resources. So why waste time manually typing in numbers and keeping a hold of receipts? 

Xero is accessible from anywhere with an internet connection. Therefore, you can instantly check in on your books without waiting or searching for the right thing. Inevitably, you’ll save hours by switching to cloud accounting, giving you more time back so that you can focus on running your business. 

More Accurate Accounting 

We’re all humans and mistakes happen. However, when it comes to your business finances you want everything to be spot on. Manual bookkeeping leaves so much room of error and it’s often something you have to accept when you’re doing everything yourself. Meanwhile, some traditional accounting software also requires you to manually input the majority of your own data. Again, this creates space for mistakes to be made. 

With cloud accounting, you can be sure that your bookkeeping is accurate. There is only ever one version of your data kept. Which means that your data is more likely to be up-to-date. Also, you have the ability to add your whole team to your cloud accounting software. More eyes to proofread means greater accuracy. 

With Xero, you can also connect your accounting directly to your business online banking. This automatically updates your books whenever a change is made in your bank. This is a much more efficient way for your financial data to be stored and tracked.

Protect Your Information

A common misconception is that the cloud isn’t a safe place to store important documents. Xero cloud accounting comes built-in with measures placed to keep your finances and data protected.

Keeping your data safe is a vital part of cloud accounting, hence why Xero have multiple layers of protection to keep your data secure. To minimise the chance of losing your data, Xero will also store your information in other highly protected locations. 

Most importantly, you are in control of who sees your data. With Xero, you can invite your whole team to have access to certain areas. For example, if you don’t want your staff to have access to payroll, you can hide that. Cloud accounting puts security and protection at the centre of everything, another reason why it’s a necessity for any business in 2021.

Helpful Features

Aside from storing all your financial data in the cloud, Xero also has other features to improve the efficiency of your accounting. With Xero, all your data is automatically backed up. Therefore, a broken computer will not delete all of your financial history. 

Instead, you’ll be able to access all of your information from another device. With traditional accounting methods, data back-ups can be costly but are necessary to protect your information. On the other hand, cloud storage is the centre of all cloud accounting so it comes at no extra cost to have your information stored. 

Other helpful features with Xero cloud accounting includes the ability to add IOUs, bill reminders and cash flow projections to your homepage. The software has been built to be simple for business owners to use and understand. Xero gives you more flexibility and control over your accounting than ever before.

Start with Cloud Accounting Today 

At Steele Financial we love Xero because of how efficient and simple it is. Using a cloud accounting software can save you time, energy and money so there’s no reason not to update your accounting.

Don’t stay stuck in the past. Get started with cloud accounting today by booking your free consultation with us. At Steele Financial, we like to make accounting simple and efficient for your business. Accounting shouldn’t be a drain on your time, instead, it should work for your business to help you achieve your goals. Get in touch with us today, you won’t look back.

Learn more about our cloud accounting services in Bristol.