Pros of moving to online accounting software

Mobile online accounting

With online accounting software, you can access your data anywhere in the world with a desktop, laptop or mobile device and an internet connection.

Cashflow

Online accounting allows you to get a ‘real-time’ view of your financial position, who you owe and who owes you, which you can access at any time.

Team access and collaboration

Everyone in your team can access the same data at the same time, no matter where they are based. Your accountant can access the same information as you which means you can go through your financial position together, whilst in different locations.  There is also the functionality to restrict access to certain areas of the accounting system.

Tracking

It’s easy to invoice and track inventory and you can schedule and make batch payments to suppliers. You can also review and approve receipts in expense claims which can be uploaded from multiple members of staff. Also, your latest banking, credit card and PayPal transactions can be imported and categorised reducing data entry.

Updates

For most cloud based packages, updates tend to be automatic, so you do not need to factor in any down-time whilst updates are being made, saving you time and money. This also means that you are always on the latest version.

Get paid faster

Some clients find that using online accounting software allows them to get paid quicker, as you can track when invoices have been opened or not, so non-payment of invoices can be actioned quicker.

Disaster recovery

Your data is backed-up automatically in the cloud and in the event of a disaster or cyber-attack for example, your data can be easily restored.

Easily integrated

Online accounting software can be easily integrated into your existing systems and in the most cases will improve your processes. Also, with some planning it’s easy to migrate data over to the cloud.

Fraud reduction

Automating some processes can increase the accuracy of financial reporting and there is some evidence to suggest that online accounting software reduces fraud as businesses have more control over data and access to data so anomalies can often be identified quicker.

Paperless

Using the cloud can support an organisation’s aim to become paperless. All accounting paperwork and records can be stored in the cloud and even receipts can be photographed from mobile devices and automatically filed into the online accounting software.

Online accounting add-ons

There are hundreds of add-on apps for online accounting software, some of which are industry or service specific. Some are free and some you pay for but it’s worth investigating add-ons relating to banking, expenses, payroll, invoice approval and ecommerce which could potentially streamline more of your processes.

Tax planning

With the availability of financial information in a readily usable format, through the reporting functions available in the cloud packages, you will be able to see exactly how your business is doing, and how profitable it is.  You may then be able to explore ways of reducing your profits, ahead of your financial period end, and ultimately, your tax bill.  Only by having such information available to you will you be able to discuss the options with your accountant.

Informed decision making

As above, with the financial information that will now be at your fingertips, you will be able to make more informed decisions regarding the performance of your business – is an area underperforming and needing some attention or is an area performing well and requiring more focus?  You will no longer have to wait until your year end accounts have been prepared before you are in a position to look at these issues.

Cons of moving to online accounting software

Now let’s take a look at some of the cons of online accounting software.

Internet access

You are dependent on the internet in order to access your accounting data, but this is not dissimilar to many office applications. In most cases if you do lose access to the internet it can often be often be restored quickly and easily.

Training

You will have to invest in some training for you and your staff on how to use the new system. Some accountancy firms offer training as part of your package and most online accounting providers produce ‘how to’ guides, webinars and podcasts free of charge.

Research

You will have to do some research to find the right package for you, but it will be time well spent. You should also discuss options with your accountant as they should be able to provide some insight into packages they have used.

Monthly packages

In most cases you will save money by switching to online accounting software. However, it’s worth noting that there is a tipping point between monthly cloud options. For example, there are basic packages for sole traders and small businesses, but if you grow quickly and take on more employees you may end up having to move up to the next package to suit your growing needs, which could mean you are on the next pricing level but you are at the lower end of the criteria for this package, until you grow again.

Additional costs

If you need to download large amounts of information from your cloud based system on a regular basis, you may incur more costs, so check this beforehand.

Cyber-attacks and data breaches

There have been some recent high profile cyber-attacks and data breaches of large global businesses, which means that online accounting providers are not immune to such attacks. However, their systems and processes for dealing with such an attack would in most cases be more advanced than a system you would use within your own organisation.

It’s only as good as the information you put in

We talk about the availability of good financial information being available within the online software to help with decision making and so on, but it should be noted that this is very much based on the quality of the information that you put into the system.  While many of the data input and collection functions can be automated, if this data is out of date or incorrectly posted, you may not be any better off than you are currently.

Summary

It’s worth spending some time and asking your accountant about what online accounting software would work for you. We are gold partners of Xero cloud accounting however we also use many other suppliers. If you have any questions, please don’t hesitate to get in contact with a member of our team.