The recent adoption of accounting software as a service (SaaS) is increasing, and cloud computing can boost individual practitioners and small businesses. This blog post from Libeo reviews the 6 most current and effective cloud accounting benefits for accountants.
What is Cloud Accounting?
Don’t know what cloud computing is? It’s basically getting your accounting software online through a third-party provider. Cloud accounting features allows users to forecast their cashflow, send and track invoices, get paid faster, act on real-time reporting and reduce manually data entry.
Cloud accounting solutions in the UK are growing rapidly in popularity among small businesses and startups through technical integrations with software such as Dext, QuickBooks Online or Xero. Cloud accounting is a popular choice among businesses but it also comes with many benefits for accountants and their clients.
Cloud Accounting VS Traditional Accounting
Both Cloud accounting and traditional accounting have the same functionality. Cloud accounting is different than traditional software because it’s hosted in the cloud instead of installed on your computer or server. This is the reason why Cloud accounting is often more affordable and more scalable than traditional software.
Cloud accounting services are accessed through an Internet browser, which means you can access them from anywhere. Which means you are no longer tied to your office.
1. Improve real-time collaboration within your firm
The biggest benefit for accountants is how cloud platforms allow multiple users to access data at the same time and make changes in real time, so there’s no need for duplication of work or waiting around for others to finish their tasks before you can proceed with yours.
Also, Cloud accounting solutions allow you to work with clients remotely — which means you don’t have to be in the same room as them when discussing their finances. This allows accountants to collaborate more easily with one another, which saves time and money by making it easier to share files and discuss client details without having to travel back and forth between offices. An effective solution to combat scope creep.
2. Develop an efficient accounting process
With traditional software, accountants have to keep track of their own data and manually transfer it into reports and other documents. With Cloud accounting, they can easily store their clients’ data in a secure place, where they can access it whenever they need to compile reports or create invoices or other documents. This allows them to develop a more efficient process than ever before:
- Ease of use: Cloud software is designed to be simple and intuitive. There are no complicated setup processes or extensive training required. Instead, users can log in and begin using the software immediately. This allows you to spend less time on set up and more time using the features that matter most to your practice.
- Flexibility: Cloud accounting allows accounting firms to set up approbation workflows and automation rules for invoicing. These automated approval workflows allow accountants to approve invoices themselves or delegate approval to other team members or clients in real-time. This ensures that invoices are approved quickly so that payment can be issued immediately upon receipt.
- Efficiency: Cloud computing solutions streamline processes and save accountants valuable time. They help anticipate and prepare statutory accounts, financial statements and balance sheets. Last but not least, they play a major part in reducing invoice processing costs.
3. Onboard and collaborate with clients
Cloud accounting also allows accountants to spend less time on mundane tasks, like data entry and manual reports, so they can spend more time on value-added services like financial planning or tax preparation. This is important because it allows accountants to provide better service — not just on tax returns but also throughout the year as their clients need assistance with various financial matters such as budgeting, record keeping and more.
One of the biggest challenges for accountants is new clients. Cloud accounting makes onboarding easier by giving you access to your client’s data, such as bank feed and credit card transactions, at any time. This eliminates the need to wait until they send in all their documents or even meet in person before getting started on projects like tax preparation or financial statements. As a result, you can start working on their financial reports right away instead of waiting months before they send everything in.
Cloud accounting also makes it easier for new team members to get up to speed quickly by providing them with an easy-to-use interface that requires little training or experience in order to use effectively.
4. Embrace the mobile workforce
If you’re like most accountants, you spend a lot of time on the road visiting clients or running errands.
Cloud accounting systems are designed to be used on mobile devices. This means you can be in the field running a client meeting, yet still be able to access your data instantly on your mobile device or tablet. No matter where you are or what device you’re using, you can always have access to your data without worrying about IT support or network bandwidth issues.
You can also make sure that their data is accessible from any location by using mobile apps or web portals that allow them to access their financial information on their own computers or mobile devices at any time of day.
5. Optimize your billing process
Cloud accounting makes billing easier by automating the time-consuming tasks in your billing process:
- You can keep track of clients’ invoices and their payment status, so you always know what to expect from them.
- You can automate recurring invoice payments, which eliminates the need for manual reminders or phone calls.
This process will ensure that they pay on time each month, which will make life much easier for both parties involved.
6. Access real-time data safely
Cloud accounting allows you to easily create customized reports for your clients by pulling data directly from their accounts and manipulating it however you want through simple drag and drop features. These reports are useful not only for billing purposes but also for tax season preparation as well as general business management.
Cloud providers have multiple layers of security in place to ensure that sensitive information remains safe at all times, including encryption methods and secure firewalls protecting against unauthorized access attempts by hackers or other malicious entities.
What are Cloud Accounting advantages and disadvantages?
Despite all the benefits of cloud accounting software (saving time, reducing errors, more secure than on-site servers, etc.), it does have some disadvantages.
One of the biggest disadvantages of online accounting software is that not all of them have been designed with accountants in mind. Some have been created by businesses who have no experience of accounting at all, so they don’t really understand what accountants need in an application.