Why choose cloud accounting?
If you’ve been researching your financial or accounting options in the last couple of years, you’ll probably have come across the term ‘cloud accounting’.
But the more people we speak to, the more we realise that freelancers and small business owners aren’t always sure exactly what this means, and if they are, don’t really grasp the benefits.
If you’re a sole trader or Ltd company owner and you’re unsure about cloud accountancy, you could be missing out on an opportunity to save money and time. We explain what cloud accountancy is, the benefits and the disadvantages to help you make up your mind.
What is cloud accounting?
In a nutshell, cloud accounting is an all-in-one financial management tool. It lets you easily manage your business finances when and where you want, using software that’s delivered as a service over the internet.
What are the benefits of cloud accounting?
Cloud accounting companies give you access to user-friendly interfaces and time-saving tools that make keeping track of your finances quicker and easier than ever before. Should your business deal with lease accounting, for example, you are going to want to make sure that your documentation is compliant with any relevant standards, and specific lease accounting software can help do just that.
In fact, having the right accounting software for your business can even eliminate the need to pay for (or reduce the need for) professional services. You may find that some accountants now even offer a subscription to cloud accounting packages as part of their offering.
Not only can cloud accounting help to save you money and time, but it also gives you an instant snapshot of your finances whenever you need, and allows multiple users to access it if you wish, making collaboration between business partners more simple.
With cloud accounting there’s no need to install, renew or upgrade your software – any improvements are automatic, instant and should be included in your monthly fee. As well as simple, convenient software, handy mobile apps are popping up to make bookkeeping on the go even easier. Now filing an expense can take you a matter of seconds as soon as you make a purchase – so there’s no excuse for not keeping on top of your records!
What are the disadvantages of cloud accounting?
So if cloud accounting saves you money and time, why isn’t everyone doing it? The answer, it seems, is that many freelancers and small businesses like the reassurance of having a real accountant at the end of the phone or email. And to be fair, if you want an accountant that you can actually meet in the flesh and build a one-to-one relationship with, cloud accounting is probably not the right choice for you.
Recognising the need for reassurance and one-to-one service, some cloud accounting companies offer assistance from accountants as part of your package. You can call or email your own personal accountant team with questions about your accounts at any time – and in fact may even get a quicker reply than from a traditional accountant who needs to divide his or her time between many clients.
How can cloud accounting save you money?
Cloud accounting’s streamlined software processes mean that their accountants need to spend less time calculating your finances – savings which are passed onto you. Or, if you choose a software-only company, your accountancy charges should be less as many of the tasks you’d normally ask them for help with can be handled automatically by your software.
You also save money through extra time gained from a quicker and easier accounting process for you – and don’t need to spend out on admin and maintenance for the system. Any problems with the software or server will be handled quickly by the cloud accounting company, giving you one less thing to worry about.
Who offers cloud accounting?
There are a number of established companies offering popular cloud accounting packages to choose from, including:
Xero offer a software-only subscription that enables you to manage your finances easily in real time, but doesn’t provide support from accountants. For £19 a month you get:
- Access to real time online accounting software that takes care of invoices, recording expenses and automatically reconciles your bank transactions if you wish.
ClearBooks also offer a software-only subscription that enables you to manage your finances easily in real time, but also don’t provide support from accountants. For £19 a month you get:
- Access to real time online accounting software that takes care of invoices, recording expenses, VAT reporting and automatically reconciles your bank transactions if you wish.
Make the right choice for you
Managing your finances properly is vital when you’re a freelancer or small business owner – but so too is keeping your costs down. Cloud accounting helps you to stay on top of your finances easily all year round, saving you time and money. Some companies even provide you with your own expert team to answer questions and guide you, giving you many of the benefits of a traditional accountant for much less.
So if you really do want to sit across the desk from an accountant you can see and shake hands with, find someone local to you. But if you want to potentially save time and money with a virtual service, cloud accounting could be the right choice for you.