It’s difficult to find reliable data on the number of businesses using cloud accounting but it’s fair to say it’s a very large percentage and increasing all the time.
There are many advantages to using cloud accounting, here are our top 5:
The data can be accessed from anywhere in the world (provided you have an internet connection and your login details) by whoever you choose. Most businesses give access to their accountants to facilitate real time support, forecasting and tax planning. Some businesses also give access to their bank manager, particularly those that are required to provide regular management information.
Ease of use
As cloud accounts software is web based, anyone who knows how to surf the internet can generally find their way around the software without the need for training. Most cloud software uses user friendly terminology such as payables and receivables rather than creditors and debtors.
As most cloud accounts software is under 10 years old they tend to work really well with other modern technology for example most of the packages will link with your on line banking and import transactions automatically meaning your management information is in real time. Cloud accounts should also, in theory, be future proof and ready for new HMRC innovations such as Making Tax Digital.
Although this varies from provider to provider and is dependent on the number of bolt ons you require (cloud software tends to be aimed at the mass market with paid for add ons), it is generally significantly cheaper than traditional accounts software. You will also save on server storage space as the data is stored ‘in the cloud’ (ie on someone else’s server). If your software is linked to your on line banking your year end accounts fees may also be lower as your accountant will not need to spend time reconciling the bank transactions.
There is a wide variety of options available including Xero, Quickbooks, Freeagent and Sage Online so you can choose the one that best fits your business.
As with everything in life, there are disadvantages. If you lose your internet connection then you cannot access your data. Thankfully this happens less and less these days.
A big consideration should also be how financially stable is the software provider? Clearly it would be disastrous should they cease trading suddenly and switch off their servers!
You also need to consider what happens should your business close or be sold. You need to keep financial records for 7 years and, as the data is not on your server, you will either need to keep up the subscription or back up the data onto your system.
Finally, as with all data kept in the cloud, you need to read the small print as to where it is held and what their security processes are (even more important now GDPR has been implemented).
Walsh360 has been using and supporting cloud accounting software for nearly 10 years now and is the number one provider of Xero software in Hull and East Yorkshire. For a free review of your accounting systems or a demo of any of the above mentioned software please contact us on 01964 614234 or email firstname.lastname@example.org.