Most things in your business are probably carried out digitally.
Accounting is no different. While Excel spreadsheets are useful, cloud accounting has a lot more functionality that can save you time and energy.
What is Cloud Accounting?
Cloud accounting software is an accounting system that can be accessed online.
How is Cloud Accounting Different From Traditional Accounting?
Unlike traditional accounting software, cloud accounting allows you to track your finances wherever you are with real-time data. And it’s cost-effective.
What is the Best Cloud Accounting Software?
There are various cloud accounting packages to choose from depending on your needs.
Xero, Sage, FreshBooks and QuickBooks are all popular cloud accounting software that are popular. Each has its own features, which you should compare before choosing the right one for your business.
At M Squared Accountancy Ltd, we don’t use bridging software, which is not a full accounting system and instead is designed to bridge the gap between your records and, for example, the HMRC digital submission requirements.
Instead, we use end-to-end accounting packages where you record transactions directly into the system, and it meets the requirements of HMRC.
Benefits of Using Cloud Accounting to Grow Your Business
There are many advantages of cloud accounting, which is why we use it at M Squared Accountancy Ltd. Some of these benefits include:
Accuracy
Cloud accounting helps to reduce human errors and makes it more accurate. With its AI capabilities, it can provide predictive insights. This helps you prepare for the future and better manage your cash flow without needing a crystal ball.
Scalability
The real-time capabilities mean you have up-to-date data needed to make quicker decisions.
You can also add new features or people to it, which enables it to grow with your business.
Making Tax Digital
Making Tax Digital is the biggest change ever to tax returns. By having all your financial information online, you don’t need a mountain of paperwork that makes you want to scream. This makes it quicker and easier to find information.
With the government introducing ‘Making Tax Digital’, you will need MTD compatible software. This helps you to keep track of all your information, and it’s easier to submit this for your tax returns. Moving your financial information to digital also helps you to be compliant and avoids any dreaded letters from HMRC that leave knots in your stomach.
Easy to use
Even if you loathe accounting more than you hate pineapple on pizza, you will be able to use cloud accounting. It is designed to be user-friendly with no installation and integrates seamlessly with your systems.
It also automates lots of processes to save you time from doing these yourself. Especially when it’s repetitive and boring!
All the information is in one place, allowing you to control your finances. It also allows you to check your finances at any time instead of relying on anyone else.
Secure
While you may worry about the security of cloud accounting since it’s online, the data is encrypted. It’s regularly backed up by the provider to ensure you don’t lose it or it becomes corrupted.
Choosing the Right Cloud Accounting
Here are some ways to ensure you select the right cloud accounting:
Identify Your Needs
Consider the size of your company, your volume of transactions, compliance requirements, and what you want from your accounting system.
Features
What features do you have to have, and which are just added bonuses? If you don’t have staff, you won’t need the payroll function. However, consider whether you’ll need this in the future. Maybe you won’t need certain features now, but if you want to grow your business, you won’t want the bother of migrating to another system if you don’t have to.
Easy to use
While most cloud accounting systems are user-friendly, try using different ones and check how intuitive the interfaces are.
If non-finance staff are going to use it, is it easy for them to use?
Integration
It’s essential that you can integrate your current systems. Check it works with your current tools.
How to Implement Cloud Accounting in Your Business
Migrating to cloud accounting shouldn’t be done overnight.
Develop an Implementation Plan
Plan how and when you will move your data and the steps that need to be undertaken.
Prepare Your Data for Migration
Audit your finances to get rid of any duplicated information or outdated data. You don’t want to bring this data over to your new system. This presents a good opportunity to go over your data and clean it up for more accurate records.
Migrate to Cloud Accounting
Move your information to cloud accounting.
Train Employees
Ensure anyone using the system in your business knows how to use it and who to go to if they need help. Your system is only as good as the people using it, so ensure your staff are confident.
Test Your Cloud Accounting
Test creating reports and different features to ensure it is working correctly.
Review Your Security Policies
You may need to review your security policies to ensure you are covered should something go wrong.
Why you Should use an Accountant who Works With Cloud Accounting
Selecting an accountant who is experienced with cloud accounting is important. It shows that they are competent and up to date with the latest technology. It also means it is much easier to collaborate with them regarding your finances and helps to avoid profit-killing mistakes.
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