Every successful business has its finger on the pulse. You need to know the key numbers. Not the numbers in last year’s accounts; they’re out of date. Redundant. You need today’s numbers. And that’s where your cloud accounting system comes in.
If you don’t have a cloud accounting system this blog will explain the benefits and how to get started. There are essentially just 4 types of accounting system:
Type 1: The Manual System
A manual system is cheap; you only have to buy a book. But that’s a false economy. Manual systems simply take too long. And your time is too valuable. It also takes the accountant more time to produce accounts so you end up with bigger accountancy fees. Manual systems also do not provide that all-important management information for making great business decisions.
Type 2: The Spreadsheet
Excel and other spreadsheet-based systems are also cheap. And whilst you can automate some processes (e.g. adding up columns), they take time to set up, you need advanced Excel skills to produce management reports and you can waste hours changing the spreadsheet as your business grows and evolves.
Type 3: The Desktop system
Then there is the old-fashioned desktop system. Whilst these are far better than manual and spreadsheet-based accounting systems they come with a host of hidden costs. Yes, the software can be relatively cheap. But there is a huge hidden cost of customisation, implementation, maintaining your hardware to meet the demands of changing software, dealing with (often costly and compulsory) software upgrades, security, scheduling back up routines and restoring data when things go wrong.
Type 4: The Cloud Accounting System
In a contrast a modern cloud accounting system gives you the following benefits:
- It saves you a very significant amount of time,
- Gives you 24/7 access to up-to-date financial information and reports (you can use cloud-based software from any device with an internet connection),
- You can sleep at night knowing your sensitive financial data is always secure and backed-up automatically,
- No system downtime because all software upgrades are automatically installed. This worry-free maintenance saves you time and hassle,
- It reduces your accountancy fees because it makes it easier for your accountant to produce end of year accounts, and
- Since your accountant can access your data 24/7 you get more value from an accountant- they will help you run and grow your business rather than just adding up the members
In short, a cloud accounting system will make your life so much easier and give you the critical numbers for your business in real time.
Now the bad news...
Your first problem is deciding which cloud accounting system to opt for your business. There are a myriad of different systems. They are all different. Some are better than the others. And getting the wrong solutions will cause you a big headache. Assessing all of the options is time-consuming. Then, once you've settled on the best system for you and your business you have to set it up. Unless you're familiar with setting up accounting systems this typically takes a full day or more. Not only do you have to enter all the key details of your business (accounting year end date, VAT registration number and so on) you also need to set up your chart of accounts (that's the specific types of sales, income, expenses, assets and liabilities unique to your business). And once that its done you need to transfer any opening balances. Whilst you can do that for yourself, your time is precious and valuable.
So we recommend you talk to your accountant. Every good accountant will be able to set up your cloud accounting software.
We specialize in cloud accounting, so if your accountant doesn't offer this service we can help. And you don't even need to be in the same part of the UK...we can set it up online for you.
The best cloud accounting system we have found is Xero after extensive analysis and the fact Xero is continually developing with other cloud systems playing catch-up.
Find out about the benefits of cloud accounting
Our firm specializes in cloud accounting systems and are Xero Gold Partners.
We are running a Free Xero workshop on 30th March 2017 from 4-5 pm so sign up here to secure a place
if you want to know more about cloud accounting software. These workshops will be run monthly and are open to both clients and others as they are informative and trouble shooting.
If you can't make it get in touch to set up a meeting