Over the past few years online accounting software has seen a huge rise in popularity.
Cloud accounting has now become the way that many business’s choose to record their financial transactions and the way forward for their effective financial management. This is partly due to many advisors encouraging business’s to move to cloud accounting, but is cloud accounting right for your particular business?
Below we have summarised the main benefits and limitations so you can decide whether cloud accounting is the way forward for your business:
- There is no software required on your hard drive and you only require an internet connection to access your accounting records.
- There is no need to update the program as this is done automatically
- Bank feeds are available so all bank transactions will automatically appear in the software, this makes the bank reconciliation process much more efficient and you will always know the cash available in the bank.
- There are no large upfront costs for acquiring the software, as the costs are included in the fixed monthly fees so you can be sure there are no hidden costs.
- There is no need for backups as your data is automatically saved securely in the cloud.
The potential limitations of cloud accounting
- There are still parts of the UK where the internet connection is unreliable and you therefore may not realise the full potential of a cloud accounting system.
- By using a cloud accounting system you will still have requirements to do your bookkeeping, bank reconciliations and keeping the relevant records. It can be a more efficient way to carry out these tasks, but if you struggle with financial management then using cloud accounting software won’t necessarily solve your problems.
Is cloud accounting the way forward for your business
Of course, cloud accounting is here for the duration and is becoming rapidly more popular to many new and small business’s.
By 2020 all small businesses will have their own digital tax account with HMRC and at some point in the near future many business’s will have to make the transition across to a cloud accounting system.
If you decide that you would like to upgrade to cloud accounting we are more than happy to give you advice on how you can make the transition as smooth as possible.
Please feel free to contact us if you would like to see how a cloud accounting system could work for you.
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This post was written by Tim Sperrings