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Cloud accounting has revolutionised the world of financial management and reporting. The emergence of cloud accounting software has been a game-changer for businesses of all sizes. It provides more flexible, efficient, and safer ways to record and manage financial data. In this article, we’ll explain what the terms ‘cloud accounting’ and ‘cloud bookkeeping’ mean. We'll also discuss the advantages and benefits of harnessing the power of the cloud in your business.
The terms cloud accounting and cloud bookkeeping are related and somewhat interchangeable. Both involve using cloud-based (internet) technology and software for financial management. However, the scope of a cloud accountant’s role and responsibilities has some subtle differences to that of a cloud bookkeeper.
Cloud bookkeeping primarily focuses on recording financial transactions and making sure these are organised correctly within the financial accounts. The key tasks of a cloud bookkeeper include:
They might also monitor and manage the cashflow of a business and produce cash flow forecasts. In small to medium businesses a bookkeeper might also provide payroll services. In larger firms, however a specialised payroll officer will often perform these tasks.
As the name suggests, in cloud bookkeeping, the bookkeeper uses cloud-based accounting software and tools. This allows the cloud bookkeeper to work remotely rather than at a business’s physical address. This feature of cloud bookkeeping provides many benefits to businesses. This includes the ability to outsource bookkeeping needs to professional, specialist bookkeeping firms. This allows the business access to a team of experts without the extra headcount.
Darcy Bookkeeping has been providing cloud bookkeeping services to Australian businesses for more than 10 years. Our team are experts in the popular cloud accounting software programs and can work onsite at your office or remotely. Give us a call on 1300 728 875 or send us a message to get started.
Cloud accounting goes beyond the scope of bookkeeping; a cloud accountant will usually provide more strategic advice and services. This often includes:
Similar to cloud bookkeeping, cloud accounting is made possible by cloud accounting software and can be done remotely or onsite. A cloud accountant is sometimes referred to as a Virtual CFO. They can work in-house on a full- or part-time basis, or the work can be outsourced to a professional accounting firm like.
Once upon a time, financial transactions and balances were manually entered into a paper-based journal and ledger by hand. Can you imagine how time-consuming that would have been? Just think how tedious it would have been to search for the error, fix it, and redo all the balances. And how easy it is to make a data entry error.
Then, computers came along and made it easy to enter, update and calculate the figures. They could populate the connected relevant reports instantly. It was a transformative revolution. However, desktop accounting software still had its flaws.
A business would have to purchase a copy of their preferred financial accounting software and install it on a desktop computer that sat in an office. Businesses would have to purchase and install the programs on multiple computers if they had more than one person working on their accounts. Data was stored on local machines or network servers and backups were kept both onsite and offsite to prevent loss due to hardware failures or disasters. When it came time to update the software a business would need to purchase a new version and install it all over again.
In larger businesses, bookkeepers would manually compile financial reports from various sources. This could cause delays when team members weren’t available, or figures weren’t ready.
Data sharing with remote teams or an external accountant was done through email or sending physical copies of discs. Not only was this a potential security risk, version control could also become a costly nightmare if somebody was referring to a superseded file.
In this digital, online age, it is rare that we have to enter a transaction from scratch. Bills (accounts payable) are often sent digitally and can be emailed to the accounting software. The software then sets up a draft with pre-filled information that then just needs to be checked and approved for payment. Hard copy bills can be scanned with a phone and sent to the software too. This helps to reduce manual data entry errors (and misplaced paperwork). Fewer errors leads to more accurate financial reporting and reduces the time needed to be spent on error correction.
Cloud accounting software allows users to access their financial data from anywhere, at any time, as long as they have an internet connection (and the correct security permissions, of course). This flexibility is especially valuable for businesses with remote teams and those that aren’t office-bound (eg tradies and salespeople who travel a lot).
When financial data is no longer stored on standalone computers or servers ‘back at the office’, multiple users can access and collaborate on the same data simultaneously. This eliminates the need for sending files back and forth, reducing the security risks and ensures that all stakeholders are working with the most up-to-date information.
Cloud accounting software provides real-time data in dashboards and reports. These are constantly updated as transactions are entered. This allows businesses to gain accurate and up-to-date insights into their financial health, and thus make informed decisions when needed.
With the introduction of software as a service (SaaS), businesses no longer have to bide their time and plan for when they can afford to invest in upgrading to the latest version of a software program. Instead, the software provider usually releases updates as part of the subscription for as long as it is active. To remain competitive, this usually means SaaS companies regularly update their programmes with new features and security enhancements. These updates occur when a user logs in to the program and are fairly unobtrusive – no more sitting around waiting for a manual, large update to finish installing.
Most cloud accounting software is available on a subscription basis rather than for outright purchase. These subscription plans are often offered as either monthly or yearly options. This provides flexibility for businesses to be able to budget for the expense and save money with a yearly subscription. Many also offer tiered subscription plans with different levels of features, allowing businesses to only pay for what they need. Software providers are no longer trying to achieve economies of scale by distributing a one-size-fits-all product that may contain advanced features many businesses don’t need.
As mentioned above, the tiered subscription plans with different features allow growing businesses to scale up to more advanced features or increased volumes as needed. For example, as your company grows, you might want to upgrade to a level that includes timesheets and staff rostering features, or inventory management. In addition, you won’t need to upgrade computer hardware just because you’re now processing more transactions.
Many cloud accounting platforms offer integrations with other business tools, such as e-commerce systems and mobile apps, to streamline data input and prevent double handling of data. These integrations and add-ons are usually fairly easy to implement. Additionally, thanks to their being cloud-based, there are very few incompatibility issues.
Reputable cloud accounting providers implement robust security measures, such as data encryption and multi-factor authentication when users attempt to login. This ensures the safety of sensitive financial information. They also maintain regular backups for customers automatically, which allows you to restore data if you need to. You have a better chance of recovering your data as the software provider will be hosting it offsite and often in numerous secure locations.
Cloud accounting software often comes with customer support options via online chat, email, or phone support. There is also usually online documentation readily available for users to find answers to questions or when they need guidance.
Although cloud accounting software is hosted on the internet, there are also usually work offline options so you can still access your data in the event of an internet outage. Once you’re back online, you can automatically sync your data when you login to the software.
As you can see, there are many compelling reasons to switch to cloud accounting solutions. The adoption of cloud accounting and cloud bookkeeping services provides opportunities for businesses to manage their finances efficiently and make well-informed decisions in an increasingly fast-paced business environment.
In 2006, the world’s first cloud-based accounting software, Xero, was released in New Zealand and then later in Australia. Xero’s software-as-a-service (SaaS) business model made accounting software more accessible to small businesses and provided the scalability and automation solutions larger businesses needed.
Since then, many other accounting software programmes have also become cloud-based, including MYOB and QuickBooks Online, leading to cloud accounting software becoming the industry standard.
As with any change, initially there was some fear around the security of data in web-based accounting software. However, as long as you use a reputable software provider, you will actually benefit from better security. No longer does sensitive financial data need to be sent via email or copied to USB drives that can fall into the wrong hands.
There are many benefits to be gained from adopting cloud accounting software in your business.
One of the most popular cloud accounting software is MYOB. MYOB can make a big difference to your small business once it is set up by CPA-titled bookkeepers. It is extremely easy to use and offers convenience. Tax time will never again become a problem once you learn to trust MYOB.
MYOB services include MYOB Business, which is perfect for small business owners, and MYOB AccountRight, which is great for bigger businesses. MYOB bookkeepers can handle your daily bookkeeping needs using only this software as their weapon. They include training for business owners on how to manage MYOB while MYOB bookkeepers provide support in the background.
Producing instant reports on PAY, GST, and BAS is breeze. MYOB bookkeepers can help you with your day-to-day reports using this intelligent and very organized software. Whenever there is a tax change, MYOB updates automatically so you will also be aligned with the Tax Office. It is also updated to include superannuation rate charges. You and your bookkeeper can easily collaborate through MYOB so you can both check your accounts together. Asset write-offs and depreciation can easily be recorded and get ahead of others with your ATO SuperStream obligations in record time.
Reckon have helped a lot of small businesses in Australia through their bookkeeping software. They offer a lot of great features that will keep your bookkeeping running smoothly.
Reckon software packages include Reckon One and Reckon Accounts. Reckon One suits small business owners in Australia, as it makes it easy to collaborate with your bookkeepers. You, your team, and your bookkeeper can share files with each other wherever you are.
Reckon One also makes it easier for you to track your receipts, payments and GST. You can see real-time changes with your net position as your bookkeeper updates things. Categorise unlimited transactions through Reckon One and manually import your bank statements too. It also integrates SuperStream in it as an added efficiency. You can also manage your invoices through the free mobile app provided, so you can keep things up to date on the go.
Access your Saasu account flexibly with its Clear Jelly feature that lets you create the perfect report and dashboard for your business in just a few clicks. See your bank balances and sales through the live dashboard. Saasu also allows you to create professional invoices and give a credit card or PayPal payment options to your customers.
You can simplify your expenses with Saasu, as it allows you to attach receipts via mobile and web apps for easy accessibility of these data. Keep everything up-to-date with your bank feeds as you reconcile your accounts without a fuss.
One of the best features of Saasu is its Forecaster, a tool that lets you see your future cash flow so you can breathe easier during tight times. You can efficiently manage your inventories using its powerful inventory management tool as well as its purchasing and supply chain tools. Rest assured, Saasu will save you time and money.
Xero is one of the most popular accounting softwares, and one of the leading ones when it comes to mobile cloud accounting apps. It has already made its name as a great tool for handling transactions online. It has made many business owners’ lives easier and helped streamline many business processes with its innovative features.
Xero’s mobile app, Xero Touch, allows users to easily create invoices and receipts on the go. One of its claims to fame is its ability to take pictures of receipts and store them in the app itself, bringing more convenience for users on the go.
Xero's real-time monitoring dashboard helps you see your bills, invoices, receivables, fixed assets, and more. This can help you understand your business’s current standing in terms of income and expenses.
Last but not least, their user interface is not only intuitive, but also very streamlined and elegant.
QuickBooks Online allows you to keep up with your bank reconciliation automatically. You can also record and save the receipts of your expenses, even photograph them for future tax time use. You even also create professional invoices complete with your company brand to send out to your customers. It also makes managing your employees’ payroll easy.
The most prominent feature of QuickBooks is its multi-factor authentication (MFA) to safeguard all your files. This is an added security feature before you can access your account. MFA lets you confirm your account information by entering a code that is delivered to you via text message or on your email account. Once you have confirmed it, you can log into your QuickBooks Online account.
Are you ready to harness the power of the cloud but don’t know where to start? Give us a call on 1300 728 875 or send us a message to discuss your needs.
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