Did you know that almost half of small business owners and executives consider bookkeeping and taxes to be the least enjoyable part of running a business?
Despite this dislike, 20% of small business owners still do their bookkeeping by hand, while 46% continue to depend on traditional desktop software, rather than try cloud-based accounting. Some studies have even found that small businesses have been more hesitant to move to cloud-based solutions for accounting than for any other business operation.
It’s true that bookkeeping and accounting can be expensive, complex, time-consuming, and the source of various administrative frustrations. But with the advent of cloud-based accounting software, some of those frustrations could be alleviated.
So, read on to find out whether cloud-based accounting software could make your business more efficient and relieve the burden of bookkeeping from your shoulders.
What is Cloud-Based Accounting Software?
Do you use online banking? Have you ever stored files on Google Drive? If so, you’re already familiar with the cloud. It is a system that allows for the storage of data and software online, instead of on your computer’s hard drive.
The more experience you have with websites and Internet-based software, the less time it will take for you to master the system, especially as many cloud-based accounting solutions are designed to be simple and user-friendly. So, what does cloud-based accounting software do?
Cloud-based accounting software handles your basic bookkeeping and accounting functions. All of the major players in cloud-based accounting software perform the same basic functions: tracking accounts payable and receivable, invoicing, customer and vendor profiles, bank synchronization and reconciliation, bill management, financial reporting, and cash flow snapshots. Many also offer payroll, inventory, quotes, and other services as add-ons, or as part of a package.
Accountants and Software: The Perfect Match
Did you know that Entrepreneur.com ranks accounting/taxes as the #1 task entrepreneurs should outsource to professionals? I couldn’t agree more!
Both business owners and executives agree that accountants are the most important professionals used by small businesses, supplanting attorneys, and bankers.
You might be wondering if accountants are afraid that cloud-based software will replace them. Surely they would see it as a threat? Actually, it’s quite the opposite. Accountants and bookkeepers play a huge role in encouraging small businesses to adopt cloud software. In fact, software companies often market directly to accountants and bookkeepers.
Bookkeepers and accountants tout cloud-based software for so many great reasons. For one, they no longer have to worry about constant software updates/maintenance. Two, it provides business continuity and quick disaster recovery. And three, the biggest benefit often championed by professionals in the field is improved productivity.
By replacing the monotony of data entry and manual reporting with automated solutions and real-time collaboration, bookkeepers and accountants can focus on giving sound business advice to their clients. Cloud-based bookkeeping allows for business owners to have more control and flexibility in their accounting solutions!
Who Are The Major Players?
The most popular cloud-based accounting solutions are Intuit QuickBooks Online, Xero, and Wave. Each option varies in terms of pricing and features, thus some options are appropriate for certain businesses, but not others. This is the reason why ratings for all three tend to be inconsistent, across various reviewers.
Competitors include FreshBooks, which focuses on invoicing and is very popular among freelancers and sole proprietors; Zoho Books, although this software lacks payroll integration; KashFlow, NutCache; and FreeAgent. There are also more advanced and expensive solutions such as Intacct, NetSuite, Financial Force, and Sellsy.
Today, Intuit QuickBooks Online drives 89% of traffic, with Xero and Wave at almost 5% and 4%, respectively. Here at Milky Way VAS, I am a certified QuickBooks Proadvisor, as well as a Xero Certified Proadvisor.
Which Solution is Right For You?
In order to make the proper decision about which cloud-based accounting software is right for your business, you should ask yourself the following questions:
- What is your budget for accounting?
- How many invoices do you create every month?
- Does the software need to scale with your business?
- How many users need to access the system?
- What reports do you need, and to what degree will customization be required?
- Do you need payroll services? How many employees do you have?
- Do you want inventory solutions within your accounting solution?
- What other software are you already using that you’ll need to integrate with?
- Do you use a smartphone for business?
As long as you choose an option that suits your business, switching to cloud-based software should make the financial management of your business so much easier.
The Benefits of Cloud-Based Accounting Software for Small Businesses
Access it Anywhere
All you need is an internet connection and a mobile device to access your cloud-based accounting software from anywhere in the world. You can even grant access to multiple employees, meaning team members can quickly and easily complete their work regardless of their physical location. Whether a sales rep needs to add expense receipts, or a project manager needs to check an invoice for a supplier, having cloud-based tools in place makes organizing and accessing important information as easy as taking a picture of a document or searching by vendor, amount, or date.
Many people believe that having online-only software is risky, but in fact using cloud-based software actually reduces risk when compared to the average computer-based software program. Why? Well, reputable cloud providers protect your data through the use of passwords and advanced encryption techniques. They also facilitate the dissemination of that data over multiple, highly secured servers. When it comes to PC-based programs, they are more vulnerable to data loss through file corruption and system crashes, and your sensitive information is always at risk whenever it’s stored or transferred externally from one source or physical location to another.
Maintain your Business’ Reputation
As a small business owner, you’re probably very aware of how damaging a software glitch or error can be to your professional credibility. Thus, working in the cloud assuages the downside of service delays and data loss. A host of qualified cloud providers and software developers are always on hand to oversee and resolve any possible issues with their online programs. Not only does this allow you to seamlessly get on with business as usual, but in most cases, it also translates into a significant time and cost savings where program maintenance and repairs are concerned.
The Most Up-to-Date Information is Always at Hand
By using cloud-based accounting software, entries are progressively updated in real time. This means you’ll always be able to retrieve the most up-to-date information available for your business, whether it’s related to payroll, taxes, or cyclical reports. As a small business owner, I’m sure you already see the value in that! Being able to access accurate and timely data is one of the most important factors for making better business decisions.
The Bottom Line
Should you use cloud-based accounting software for your small business? The answer is yes! But if you truly want the most efficient, hassle-free way to handle your small business’ financials, then you’ll not only want proper cloud-based accounting software but also a professional to be in charge of using that software.
At Milky Way VAS, you can rest assured that your business’ books are in the hands of a true professional who actually cares about the success and growth of your business. As a certified QuickBooks Proadvisor and Xero Certified Proadvisor, I make it a point to handle all your bookkeeping needs. From bookkeeping set up, to payroll, to customer invoicing, to tax preparation and filing, your business is sure to benefit from my experience!
I believe in building a relationship with you and your books so that I can understand your business and help advise you about the best choices for your finances. So, if you’re a small business owner in Toronto or the Greater Toronto Area, don’t hesitate to reach out to Milky Way VAS. I am always happy to answer your questions and figure out all your bookkeeping needs!