By John Coldicutt, head of KashFlow
When a small business makes an investment in IT (or anything else for that matter), it’s vital that it pays immediate dividends, whether in reducing costs, improving productivity or enhancing the experience delivered to customers.
One investment that some small businesses seem reluctant to make is in cloud computing. Although cloud is now commonplace in large multinationals, it seems there is a mixed reaction from SMEs. This was highlighted in a recent KashFlow survey where, when SMEs were asked if they believe cloud computing is suited to their business, 43% agreed, 42% disagreed and 15% didn’t know.
It is of course right that a move to the cloud is approached with due care. However, small businesses that fail to make such a move risk wasting both time and money by persisting with inefficient and ineffective business practices. This in turn could hinder the speed at which their business grows.
So, what are some of the advantages of cloud for small businesses?
Helping to speed up payments
Being paid on time is a major bugbear for many small businesses in the UK, especially when faced with customers that have 90 day or more payment terms. Research carried out by the payment company Bacs revealed that during the pre-recession days, UK small businesses were owed £30.2 billion, with close to one million businesses suffering late payments. However, by using cloud accountancy systems, businesses can produce professional quotes that can be converted into invoices and sent to clients via email. These may even include ‘pay now’ buttons and automatic reminders to encourage a customer to pay, as well as regular alerts so they know who to chase and when.
Enhancing collaborative working
Cloud based systems inherently promote collaborative working practices between businesses, a good example being the way a company works with its accountant. Access to shared information and reports creates a far more effective way of working, with accountants having 24/7 access to their clients’ financial data. Therefore, they can oversee and ensure efficient financial management, leaving the client free to focus on the business of growing.
Managing cash flow efficiently
Along with extended payment terms, SMEs are frequently presented with unexpected costs, which can put further pressure on a company’s cash flow. Moving accounts away from traditional desktop software to the cloud means business owners and their accountant can receive a full, detailed update on its cash flow instantaneously. Immediate action can then be taken to ward off any financial issues.
Reducing IT risk
Rather than introduce risk, moving to a reputable cloud provider significantly reduces it. Key business data is safely and securely stored in a highly optimised computing environment with high levels of physical and data security. Backups are taken regularly and management systems ensure that even if a hard disk fails, data can be served from a fully functional disk with no apparent disruption.
Automating otherwise time consuming processes such as order processing, accounting and payroll can allow SMEs to save valuable time and resource whilst also dramatically reducing the risk of human error in rekeying data.
Spreading investment with gradual migration
Moving to the cloud needn’t be a wholesale, overnight change. Instead it’s possible to gradually move systems and processes into the cloud at a pace that makes sense. This not only helps to keep the initial cost of investment down, but also supports the business in getting used to its new process.
Encouraging flexible working
The cloud enables employees to work from anywhere at anytime. No longer do people need to be sat at their desk in the office to make important financial decisions. Businesses benefit from the cloud as it helps to reduce some of the daily stresses and strains that can arise, for instance when submitting accounts at year-end or filing tax returns. Everything required to complete the task is already stored in the cloud and the detailed, underlying information can easily be accessed at the touch of a button.
Cloud computing can change the way small business owners do business. It helps streamline operations through efficient working processes, leaving owners free to focus on growth.