Should I use online accounting software?

Online accounting software has been available for a significant amount of time and there has been a sharp increase in demand over recent years. There are many reasons why businesses are choosing to use online accounting software over more traditional formats. This is our guide to online accounting software. Here, we explain the benefits of using online accounting software and how your company can benefit. This article does not touch on the ‘Making tax Digital’ requirements but most cloud software complies with these.

What is online accounting software? 

Online accounting software uses the cloud to store all data. As long as you have an internet connection, you will be able to access this software, no matter where your physical location is. If you have used online banking before, then you have already had first-hand experience of cloud computing at work.

If you want your business to work faster and more streamlined, online accounting software can help you achieve this. It is a worthwhile investment as it brings many benefits. Traditional business accounting software that is not run online can often be tedious and can take a large amount of time and effort. Time is precious for any company and cloud software can be a big help here.

What are the problems of traditional accounting software? 

Traditional accounting software is run on a hard drive as opposed to online. This means that the user has to be located at the computer the hard drive is attached to in order to access the information. In a world where more and more people are working remotely, this is a major disadvantage and inconvenience.

In addition to this, most traditional software only allows one user at a time. This can cause issues when more than one person needs to access financial information at once and a business could end up with errors and delays. Having the software only in one place requires a lot of transferring of sensitive information via email or USB. This is not the ideal way to share information and could lead to leaks of sensitive data.

Although it is possible to keep backups of the data, the process of doing this for traditional accounting software can be costly and sometimes complicated. In some cases, this can lead to companies not having backups at all, which can have disastrous consequences.

When traditional software needs upgrading, it can potentially be expensive and can often take time to install. Although customer support is usually available for this type of software, it can often be slow and expensive.

How can online accounting software benefit my company? 

One of the main benefits of using cloud-based accounting software online is that you can access your financial information from any device and any location with an internet connection.

Automation Updates 

With online accounting software there is no need to install any applications to your desktop computer. Any updates necessary will also happen automatically, meaning you and your team do not need to worry about working on out of date software. It will always be the most recent version.

Improved Accuracy 

All the information you need to access is available directly via the internet, meaning that it is always real time data and the latest version. This was not guaranteed with traditional software as it was often difficult to keep track of different versions which often lead to more human errors. With online accounting you have the reassurance that everyone is working on the most recent information available.

Real-Time Information 

Whereas traditionally you would only have access to financial data and statements retrospectively, if you regularly update your information online (and most cloud software has a regular automatic bank feed) you will be able to access a snapshot of your business’ financial situation at any point of the year. This information is vital when business and tax planning. A real time snapshot can show you whether you have the money you want to be able to invest in future projects or whether you need to cut costs.

Security 

Many businesses want to ensure that their data remains secure and some business owners can be reluctant to have all their data stored in the cloud. However, storing data online in the cloud is one of the most secure options available. If your computer or laptop is ever stolen, you do not need to be concerned about your accounting information being lost. In fact, the information cannot even be accessed because a user has their own login details and password.

This level of security is also great in case any natural disasters, such as fires, take place. These events, although devastating for a company, will now not be as bad as in the past a company was likely to have all their data lost as it would be all stored onsite. With cloud computing, the information will remain safe online.

Environmentally Friendly  

With many companies now making a conscious effort to reduce their carbon footprint, it is good to know that cloud-based accounting software can help with this. Now that businesses can access all their transactions, invoices and accounts online, it significantly reduces the need for anything to be printed. An example of this is that invoices can be emailed directly to your customer.

Cost-Effective 

There is also sometimes a misconception that online accounting software options are more costly to a business. This is usually not the case. Businesses need to understand that by adopting online accounting software they will save time and therefore save money. In addition to this, most software providers work on a subscription basis, charged monthly. Most software can be tailored and adapted to meet their requirements. If a business is expanding, they can easily scale up the functionality of the accounting software to match what they need.  For example, by adding stock control or payroll.

Online services often come with free trials so that you can explore which option is the best fit for your needs. If you ever need help or guidance, they also tend to offer real-time help online whether this is via chat message, email or phone.

What essential accounting software features should I look for? 

To choose your software, you should look at the key features the service provides to ensure that what they are offering meets and exceeds your needs. Although each business is different, here are some of the features you should look for:

Ease of Use 

It is important that you choose a software that you and your employees will find easy to use. Not everyone has the same level of computer skills and this needs to be considered. Do you think this software will be easy for your team to use? Many providers offer a free trial and plenty of support to help with this.

Integration  

Online accounting software packages all include basic functions such as bank reconciliation, invoicing and entering purchase invoices. If possible, ensure these functions are all integrated with one another. It will save a lot of time to be able to only use one system for all these jobs.

Security  

Always choose a vendor that is reliable and has a trustworthy reputation. Although cloud accounting is extremely secure, always ensure the option you choose allows you to have separate logins for each user. Also check to see if you can amend access on an individual basis. Some users will only need to access certain information and many packages allow this flexibility.

Scalability  

If your company grows in the future, choose software that can accommodate this growth. Many accounting solutions are flexible and can grow with your increased requirements. You should also be able to add new functionality as and when you need it.

Customisation  

Choose a vendor that has a degree of customisation. Having an accounting service that allows you to adapt reports and statements to meet your exact requirements makes your job a lot easier.

Affordability  

Although price shouldn’t be your only driving force, it is an important factor in the decision-making process. Weigh up your options carefully and ensure you are getting a good balance of features at a price that is within your budget. You should also remember that this software is an investment and should reduce the time it takes to carry out accounting tasks. We would advise not to go for software simply because it is the cheapest option.

No matter what the size of your business, you can benefit from the use of online accounting software. Cloud accounting can offer companies flexibility, security and simplicity that many seek when thinking about their finances. We recommend that you take the time to learn the new software and choose the best fit for your current business needs Then you will be able to reap the benefits, ultimately saving yourself time and money.

If you would like any more information regarding online accounting software and how it can work for your business, please get in touch with a member of the Wright Vigar Team.  Email website@wrightvigar.co.uk