According to Fundera, about 20 percent of small businesses fail before they complete their second year. Among the many reasons for this widespread demise is the lack of effective money management and bookkeeping. Utilising a cloud-based accounting system can do a lot to prevent your business from falling into this trap, keeping you on the right side of that grim statistic.
As a new business owner, it can be tough to implement an accounting system into your business, especially if this is not your area of expertise, and especially worse if you’re a creative type that doesn’t like any form of paperwork. However, getting the right system in place is crucial for tracking the financial health of your business. Don’t be shy in reaching out to an accountant to help you with this.
The 4 benefit of cloud-based accounting systems:
1. Real Time Access to your Numbers, Anytime, Anywhere
Using a cloud-based system like Xero, Wave, or Quickbooks, allows you to access your financial information at any time, from any where. With your information securely in the cloud, you do not need to bother your accountant, bookkeeper, or accounts administrator to pull last minute reports, check your overdue accounts, or provide you with a snapshot of your business finances. As long as you have Internet access, you have access to your financial information. On top of the easy access, many systems allow you to have automatic bank feeds, which is a perfect way to keep track of your business balance sheet in real time.
2. User Friendly
Many of the cloud-based accounting systems have been build with non-accountants in mind. Gone are the days of clunky, desktop only accounting systems that are created for accountants. These systems makes it easier for the everyday business owner to use on their own, or in collaboration with their accountant. To top it off, most of the cloud-based accounting software has great instructional guides and videos, along with available tech support. We have used Xero since 2011, and throughout the years, we have found their tech support team incredibly valuable.
Shoe boxes, pencil cases, and plastic sleeves full of receipts are a thing of the past. As are invoices using Word or Excel. A huge benefit of cloud-based accounting systems is how organised they keep your finances. You will never accidentally save over a previous invoice, or track them in a spreadsheet so your invoices numbers are correct and you know when they were paid. The cloud-based systems have automatic invoice numbering, an you can easily mark them paid. In some of the accounting software, you can create Purchase Orders and Quotations, that can then be converted to invoices once the client has accepted to work with you.
4. Software Updates
The cloud-based accounting software is updated by in-house developers. This means that as things change, the system developers can modify features to keep-up-to date with new legislation or user feedback. It also means you never need to worry about purchasing the latest version and upgrading the software on your computer. Unlike desktop accounting software programmes, all updates are free and included as part of your monthly subscription fee.
Ultimately, transitioning to cloud-hosted accounting system is a big step. But it’s a step that helps you save a lot of time and puts you in the driving seat of your business finances.