Benefits of cloud accounting – 6 reasons to make the switch

Do you remember the sitcom Black Books? It’s about a misanthropic, heavy drinking bookshop owner called Bernard Black. In the first episode, his accounts – basically piles of receipts and bits of paper – are in a hopeless mess. The only problem is that he needs to do his tax return. His solution? To try and seriously injure himself so he doesn’t have to complete it. If you’ve ever felt that way about your own accounts, then now is a good time to discover the benefits of cloud accounting!

What are the benefits of cloud accounting?

The first cloud accounting software appeared in the late 1990s. Since then it has grown enormously in popularity, and you can now choose between dozens of different software offerings.

In a future post, we’ll compare the features of some of the most popular cloud accounting software. However, today we’ll concentrate on the more general benefits of cloud accounting – and how it can help your business and your finances.

1. Cloud accounting is safe and secure

Traditional accounting software is normally hosted on your PC, or sometimes on a server belonging to your company. That means it’s essential for you to make regular, time-consuming back-ups to keep your data safe. People often do this by backing up the data to USB drives, which isn’t the most secure way to handle your financial information.

Cloud accounting software is different. Your data is encrypted and stored securely in data centres. It’s backed up automatically and copies are kept safely in different locations – meaning disasters like fire won’t wipe out your information.

In the early days, security concerns were one of the biggest barriers for companies thinking of switching to cloud accounting. Nowadays, security standards are so much higher and keeping your data in the cloud is usually the safest thing you could do.

2. Integrated banking data

Cloud accounting software can be linked to your bank account. This means that transactions in your bank are automatically registered by your software. As a result, you don’t have to spend hours transcribing bank transactions and entering them manually into your accounting package.

3. You can do your accounts on the go

You can access cloud accounting software wherever you can get an internet connection. The software itself is hosted remotely, so you can use it via all mainstream web browsers. Some packages also have smartphone apps, often with nifty features like receipt scanning – making it easy to enter your expenses on the go.

4. You can see your financial position in real time

You no longer have to spend hours reconciling your accounts with your bank account, meaning you can see your financial position in real time. There’s no more waiting for your monthly accounts to be completed. Cloud accounting software also allows you to drill down into your financial data, giving you instant information about creditors, cash flow, due bills and much more.

5. Less paperwork

When you can scan in receipts, send custom invoices and purchase orders electronically and not have to spend hours doing bank reconciliation, you make a serious dent in your accounts paperwork. That not only saves you time, but cuts down the number of errors you make.

6. It’s easy to collaborate

You can give your accountant, tax adviser or other professionals access to your real-time data. This makes it easier for them to prepare your tax returns or advise you on financial strategies.

Which cloud accounting software should I choose?

With so many different software packages out there, choosing the right one for your business can be tricky. At THP, we recommend cloud accounting software that has the best range of features for your particular needs. If you’d like to talk through your options, please get in touch.