By Tim Fouracre, founder and CEO of Clear Books
The majority of businesses are now familiar with cloud computing, what it is and what it can help companies to achieve with their business operations. And people are also familiar with cloud services they use every day, such as Gmail, online banking, Facebook and Twitter.
Within this broad-brush definition, there are specific applications and services that enable businesses to perform tasks in the cloud, one of which is online accounting.
Traditionally, and for many years, accountants, their clients and small businesses generally have relied on desktop software such as Sage or Excel to manage finances. This meant installing software directly onto computers with subsequent timely updates required as new functions and features were added. With no other modern day alternatives to choose from, desktop accounting software was for a long time largely unchallenged and the default option.
More recently, however, cloud accounting has grown in prominence and popularity, primarily because it offers several workflow, cost and efficiency advantages over and above the historical approach.
The major difference between desktop accounting software and cloud accounting is that the latter is delivered by service providers over the Internet. As with other cloud technologies, this means that businesses can benefit in several ways, such as frequently updated online product enhancements (no need for desktop installations), automatic back up in the cloud and real-time access for users.
Because of these types of benefits, cloud accounting has become a real alternative to the traditional desktop approach and thousands of SMEs, accountants and accountancy practices have switched some and in many cases all of their financial systems into the cloud.
For SMEs cloud accounting has significantly changed the way they handle and view their accounts. Whereas previously they would have relied on their accountant to present data at timely intervals, such as at the end of a VAT period or Year End, now they have complete transparency of their finances in real time at any time.
Traditional accountancy firms have been able to transform their relationships with clients as well as their own business operations. With clients, for example, they can collaborate in the cloud on the same set of data at the same time, rather than it being a ‘toing and froing’ process. This saves both the accountant and client time which means that it’s a more efficient way of operating for both parties.
If you are a small business considering a switch to cloud accounting, here are tips based on the feedback that we receive from our own customers.
Advice and tips
Start with some research
If you’re unfamiliar with cloud accounting or have recently started a business and have never had to do accounts before, take some time to do some research before jumping in. There are lots of different types of services and of course prices, features and levels of support vary.
Look at who’s already using it
All types of businesses are using cloud accounting and it’s highly likely that companies in your market sector are already using it. Take a look at a provider’s case studies to see how others are successfully managing their accounts online. Ask your potential cloud accounting provider about any testimonials that they have received from clients in your sector. They may even be able to put you in contact with existing customers for a one-on-one chat (especially if they run a community programme).
Find or switch to a cloud accountant
You may find that your accountant has recently become a cloud accountant or it might be the case they haven’t decided to add online accounting to their service offering. You could always suggest it, of course, or maybe even take the decision to move to a new accountant if you’re keen and your existing one has decided that it’s not for them right now.
Take a free trial
A great way of testing whether or not an online accounting service is right for you and your business is by taking a free trial. This should be a no obligation offer and will let you play around with the system to see how it works for a set period. And if you have any questions, call the company and chat to their team.
Be comfortable with the support and training available
Not every cloud accounting provider offers the same types and levels of support and you may find that this sways your decision. Ask them where their support is based – for example, offshore or in the UK – and also look at whether they offer chat, telephone contact, email, and online and onsite training.
Join a cloud accounting community
Collaboration has become an important aspect of modern business working and it may be the case that your potential provider has a community of users who share ideas and provide feedback, both online and in person. This can prove to be an invaluable and worthwhile exercise, especially if you can pick up new ideas that help you to run your business and finances even more effectively and efficiently.