These days, running your business with your head in the clouds has two vastly different meanings. You’re either running around absentmindedly, using impractical systems or (our preferred option) your head’s in the clouds when it comes to your company’s financial management. In which case, you’ve already adopted cloud-based accounting.

What is cloud-based accounting?

Before the Fourth Industrial Revolution (4IR), accounts were originally kept in ledgers or journals and recorded by hand. The first technological advance saw the use of software (such as Quickbooks Desktop) hosted locally on a computer’s hard drive. Now, everything’s moving to the cloud using software that’s hosted remotely, in other words, your accounting software and records are online.

PCMag explains the cloud as, “a way of storing and accessing data and programs over the Internet instead of on your computer’s hard drive. The cloud is simply a metaphor for the internet.”

So why the change to cloud-based accounting and why you should be using it in your business?

How the cloud benefits your accounting efficiency

4IR is the name given to the rapid changes in technology, industries, and societal patterns and processes resulting from increasing interconnectivity and smart automation. While these technologies are often considered separately, when combined they become the IoT (the Internet of Things). This simply means powerful systems that process huge data sets that are quickly translated into intelligent information that results in an action that integrates the physical and virtual worlds.

The result? A powerful way of organising operations.

What does this have to do with accounting?

Small business accounting software that’s not available via the cloud is repetitive and monotonous. It requires a lot of manual data entry – in other words, time and effort. It also doesn’t add value.

Traditional accounting software comes with a host of problems in today’s fast-paced and highly competitive business world:

• Your data isn’t always up to date
• Security is a challenge when the data’s moved from one computer to another.
• Because this software is housed on one computer, only one user has access to it. This means key personnel can’t access financial and customer details.
• Backing up data is expensive and complicated if it’s done at all.
• It’s expensive, difficult and time-consuming to upgrade compared to cloud accounting software, which updates automatically.

Faster, smarter accounting from anywhere at any time

On the other hand, if you want your business to work smarter and faster, cloud-based accounting software is a wise investment for efficiency.

Because the IoT helps automate core processes by efficiently collecting and processing information, the benefits are wide-reaching, and include:

Better decision-making – To make informed financial decisions for their clients, accountants in advisory roles have access to in-depth, real-time data analytics, business patterns, and market research when using cloud-based accounting software. You also have an instant overview of your numbers because the software checks data during processing.

Better cash flow – For new businesses, capital doesn’t need to be invested in your accounting software. With little or no upfront cost and a modest monthly payment, you can better manage your startup and ongoing costs.

Always up to date – Once you’ve signed up for cloud-based accounting, you don’t need to worry about updates. These are not only included in your monthly subscription but also don’t need any action from you to implement them.

Safe and secure – Financial data not only needs to be easily accessible but it also needs to be protected. Leading cloud-based software comes with leading security and regular data backups. For business owners, you no longer need to worry about lost or stolen data.

Quick, easy collaboration – You and your accountant, and any other stakeholders, can access your accounts at the same time, even remotely. This is particularly helpful for reporting and strategising.

Less human error –  Because the remote software is rigorously tested for accuracy, the chance of human error is significantly reduced.

An expert at your fingertips – The software isn’t just about data processing. It also serves as an expert. An example of this is the information it provides on depreciation methods for specific scenarios.

Scales with growth – Another major benefit of cloud-based software is that it can connect with other tools, such as sales pipelines, inventory systems, and your budget and cash flow. It also forms the foundation for a bigger integrated systems as your business scales.

Convinced? To get real-time, data-driven information for your business, call us to discuss switching from your time-consuming Excel spreadsheet to fast and efficient cloud-based accounting.