Sunday, July 21, 2024

How cloud accounting works?

With cloud accounting, you manage your accounts online, which makes your data available to you anytime and anywhere.

But apart from the obvious fact that cloud-based accounting means all your records are online, what does it offer to SMEs, and why do accountants use it?

Cloud accounting explained

When you use cloud-based accounting, you subscribe to a service as a user, which then gives you access to various accounting tools, and the means to organise and manage your accounts through a dedicated online app.

You can process financial transactions rapidly and efficiently, while automating your accounting.

This saves a lot of time you would otherwise spend administering your accounts. And the automated aspect of cloud accounting helps eliminate human error, to ensure you keep your books accurately and consistently.

The increasing appeal of cloud-based accounting is shown in how much business in this area has increased. For example, Xero has seen 51% increases in its UK business.

Cloud accounting vs traditional accounting

Using traditional accounting software has its limitations, and there is the potential for errors and omissions to creep into your accounting:

  • Information is only up-to-date on one machine or device
  • It requires regular software updates, which can be costly
  • You may require additional licences for more than one user
  • It can be difficult to access remotely
  • Backups can be costly and complex, and may get missed altogether
  • If you move data from location to location physically, this poses potential security risks.

By contrast, cloud-based accounting offers these advantages:

  • It offers fast and simple data entry, helping eliminate human bookkeeping and accounting errors
  • It stores all your accounting information ins a secure, centralised database, that you can view in real-time
  • This means you have instant access, in detail,  to accurate financial reporting for your business
  • It saves time when you approve invoices and make payments
  • And it can reduce your accounting staff costs.

Unlike traditional accounting software, cloud accounting software is readily scalable without you having to purchase expensive upgrades or new packages.

It will grow with you, and provide you with all the capabilities you need to manage your business finances.

There are various customisable options too, so it’s not simply a case of having to work with something off-the-shelf.

Is cloud accounting software secure?

The short answer is very secure. It may seem a big step to move all your vital accounting data into the cloud, but cloud-based accounting software comes with high levels of built-in security:

  • It runs daily backups of business information
  • It encrypts this data and stores it in several locations, rather than on one central server
  • Industry-standard transport layer security (TLS) protects data with a secure encryption protocol
  • Encryption applies to data when it is transferred, but also when it is sitting at rest, stored on servers
  • These servers are located in physically secure hosting facilities with high-level security.

Why use cloud accountants

Cloud accountants are on the rise, in the same way as cloud-based accounting software is spreading.

This is because accounting professionals recognise the benefits that the cloud can bring, and that they can pass these benefits on to their clients.

Advanced accounting packages, such as those provided by Xero, make it easier for accountants to do their job more efficiently, while offering greater clarity to their clients.

The benefits that accountants can pass on from cloud-based accounting software include:

  • Automatic data flow from business bank accounts and specialist data capture tools
  • Powerful tools for processing accounting data
  • Instant reviews of client data and information, making analysis and recommendations more rapid
  • Accounting teams can access the same information simultaneously
  • The software’s capabilities are expandable, growing to meet the client’s needs.

Why choose cloud-based accounting services

It’s important that the cloud accountant you choose has a proactive and progressive approach to cloud-based accounting software.

They should be able to show how much they recognise its potential when applying its tools to support your business.

Using cloud technology enables them to not only keep pace with your business development but also anticipate your future business needs, and have the ongoing capability to serve them.

Cloud accountants offer efficient, effective accounting solutions that:

  • Save you time and money
  • Offer greater flexibility
  • Are reliable and secure, and
  • Provide you with complete clarity about your accounts.

Using a cloud accountant you get the best of both worlds:

  • You benefit from professional expertise and a close, professional relationship that can help your business strategically
  • You also have all the advantages that state-of-the-art cloud accounting software can give you.

Go with the right cloud-based accounting firm

Whether you’re a start-up or an established small business, you want the right kind of core business support that will enable your enterprise to grow.

SME cloud accounting provides that support, helps keep your data secure but accessible, and offers scalable solutions when it comes to managing your accounts.

Offering cloud accounting services to businesses throughout the UK, Venn Accounts thoroughly integrates cloud-base accounting software into how they work because they know it provides excellent, technology-driven support for our clients. At the same time, their personalised service puts a very human face on this technology.

For more information about their cloud-based accounting services, please give Venn Accounts a call on 020 8088 2590.

Sam Allcock
Sam Allcock
Sam heads up Cheshire-based PR Fire, an online platform that has already helped over 10,000 businesses to grab widespread media coverage on their news at an extremely accessible price point.

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