Future of online UK accounting: A dummy’s guide to the cloud

Cloud accounting is the buzzword of the accounting industry and its popularity means it is now difficult to avoid the ‘cloud’. The number of cloud accounting software providers has exploded in recent years, resulting in increased choice.  Here’s our guide on how to make sure you find the most appropriate and secure accounting solution for your needs.

Overview to cloud accounting

Cloud accounting is similar to traditional accounting software, but the major difference is that the software used to power it is hosted on remote servers and not installed on a computer or laptop.

Functions are performed offsite i.e. sent to the ‘cloud’, processed and returned to the user through the internet, via a cloud application.

We’ve helped numerous businesses in Lincolnshire, Nottinghamshire and London to migrate over to cloud accounting. Give our team a call on 0845 880 5678 to arrange your free initial consultation. Or, click here to find out about cloud accounting software packages.

Round-up of the benefits of cloud accounting

Cloud accounting has been around for over 10 years and during this time it has become more powerful, offering business owners a more agile way to manage their business’ finances. Here is a list of the top benefits of cloud accounting:

1. Greater flexibility

Financial information can be accessed anywhere, 24/7 on a range of devices e.g. desktop, laptop, mobile, tablet and even on a TV, as long as it has an internet connection. This meets the needs of business owners today, who often require access to their business’ financial information whilst on the move.

The majority of cloud accounting providers enable you to upload financial data, such as bank transactions, invoices and receipts, to the cloud using an app. So, instead of losing your petrol receipt down the side of your car seat, you can upload it straight into the accounting software to be stored and processed.

2. Accurate information

Unlike traditional accounting software, cloud accounting software automatically updates your financial data and enables financial reports to be accessed in real time. Plus, it reduces the chances of mistakes being made, which can happen with manual entering.

3. Matches the needs of your business

Accounting software that is held on computers or laptops is very restrictive. It limits the number of people who can use it at one time. Plus, as your business expands, you may have to fork out more money for additional licences, which could lead to higher maintenance and support costs.

Cloud accounting has the ability to grow with your business. Extra users can easily be added on when needed and at a much lower cost. Training on the software can be carried out online or via video tutorials, meaning you don’t have to pay for staff to attend external training sessions or hire someone to undertake internal training, unless you feel this is beneficial. Additionally, updates to the system are automatically carried out by the software provider, which saves your IT department from having to do it.

4. Security

As traditional accounting software is held on a computer or laptop there is an increased risk of your confidential financial data getting corrupted, lost or stolen. No business owner wants their confidential financial data out there for the world to see.

Cloud accounting software has built its reputation on being a secure system in which you can store your financial data. Access to the cloud is encrypted and password restricted. Plus, as it is not held on a computer or laptop there is a reduced risk of the data being misplaced or destroyed. If the accounting software does ‘crash’, providers generally keep copies held on different servers, ensuring your valuable data is accessible at all times.

What to consider when choosing a cloud accounting software

When searching for a cloud-based accounting software for your business, you’ll discover there is a vast choice to choose from. From small start-up providers to well-established providers like Xero, FreeAgent and Quickbooks. Finding the right one for you can be a daunting task. To help you narrow down the options, here are some things to consider:

Performance

Would you hire a new employee without checking out their past performance? Probably not! So, why pay for a software that you will be storing and processing valuable financial data without first checking out its performance. Most software providers have client testimonials on their website, or if you are looking for something less biased, look at the comments that users have left on the provider’s social media accounts.

Support

One of the biggest selling points of cloud accounting software is the ease of use. However, there may be times when you need a helping hand to get you going. As business is no longer confined to 9-5, it is important to understand what support is provided to you, when it is available and how it is delivered i.e. online, telephone, or via chatbots for example.

Budget

Most cloud accounting software is available on a monthly subscription. The cost of these monthly packages varies, depending on, for example, the features needed, the number of users and the level of support needed. Before signing up to a package, consider what features are essential and what would be nice to have.

HMRC approved

Making Tax Digital (MTD) is the biggest change to happen to HMRC in the last 20 years. If you are self-employed, in a partnership or a director of a limited company, keeping paper records will no longer be sufficient. From April 2019, VAT registered businesses with turnover over the VAT registration threshold, are required to keep digital records for MTD purposes. Other businesses will soon follow. This means using cloud accounting software that can link to HMRCs system, or linking spreadsheet using bridging software.