The past year has shown us the importance of technology; both personally and professionally as we set foot into the world of remote working.
What is cloud accounting?
Cloud accounting is an internet based accounting system which can be accessed from anywhere on any device through internet connections. Traditional accounting systems are downloaded onto a computer or laptop, known as desktop systems.
With the use of cloud accounting, businesses can be more efficient, achieve better results, while keeping costs down.
Cloud accounting Vs Desktop accounting
The benefits of cloud accounting compared to desktop accounting:
- Flexibility – access accounting data from anywhere, on any device. Enabling working from home with ease.
- Real Time Information – financial data is updated automatically and provides real time information such as bank transactions
- Improved accuracy – as data is updated automatically, this minimises the errors due to manual data entry
- Cost – cloud accounting does not require specialised hardware, such as a server. With desktop accounting you most likely will be required to own hardware, which will need to be insured. There may also be additional costs for installation and maintenance.
- Security – Cloud accounting systems are more secure compared to desktop systems as software and security get updated automatically.
Making Tax Digital is a part of the government’s plan to make it easier for individuals and businesses to get their tax right and keep on top of their affairs. MTD requires you keep digital records and submit returns online, using a cloud based software means you are digital-ready and can send returns in the required format.
Xero and QuickBooks are both cloud accounting softwares. You are then able to link other applications such as CRM (Client Relationship Management) systems, payment platforms and receipt capturing software to automate processes and improve efficiency. Most cloud based systems are purchased as a subscription model, these can vary depending on the features.
I have experienced both, desktop and cloud based systems; I can definitely say that cloud accounting wins! I understand change is difficult so if you have any questions, I’d be happy to have a no obligation chat to discuss cloud accounting systems.