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Accounts in the cloud: The rise of online accounting software

Businesses are always looking for ways to become more cost effective, and one of the latest revolutions in that area actually lies within the accounting software itself. Cloud-based accounting software offers businesses top-end financial solutions without the concerns of expensive overheads like version upgrades, maintenance and system admin costs. All of these are taken care of at the service provider’s end, leaving businesses free to focus on their own services.

Ease of Access

One of the most obvious benefits of online accounting software is the fact that it’s available to anyone who needs it wherever they happen to be working, so long as they have internet access. There’s no requirement to download or install any software, it just works directly from the browser. Combine this with a very low total cost of ownership (most cloud accounting software can be used by multiple people at once, rather than computer based software which requires you to buy multiple copies) and that’s perhaps the biggest appeal of cloud accounting.

Contrasts with Traditional Accounting

When you compare online accounting software with computer-based software the most glaring difference is immediacy. When you carry out accounting on the computer, there’s always the danger that your information isn’t completely up-to-date with what’s going on in your company. With cloud based accounting however, the information in front of you is current to the minute, so long as everyone makes entries as and when necessary.

Improved Security

Security is another area where the two pieces of software are different from one another. If you wanted to send someone data from traditional accounting software then you would do that either by email or, if you’re more security conscious, by USB drive. Neither of these are secure or reliable methods however, they can be slow, insecure or, in the case of a USB drive, easily misplaced.

Cloud security offers a lot more peace of mind. As well as making the data easily available to other members of your business, whilst keeping it safe from outsiders, it also protects your important financial data from onsite disasters like fire or flood. Cloud security is also easily modified, allowing you to give access to a user for limited periods of time if you wish to share it with someone new.

Immediacy has already been mentioned as a benefit for those people actually filing accounts, but it is also of great use to the people running the business. Immediacy makes it possible for the management of a business to see exactly how they are doing at that particular moment in time. This allows businesses to be much more agile with their spending and therefore react to the marketplace better.

Getting Started with Online Accounting

There are plenty of services offering cloud-based accounting, here are three we think are worth considering:

Kashflow

Kashflow has plenty of services built into its software but most impressive of all is its reports function. Kashflow can generate over 40 different types of financial reports for your business, providing a report for most situations. It can also set up purchase orders for you, automating your regular purchases and leaving you free to do other things.

Features

  • Invoicing
  • Quotes and Estimates
  • Automated Purchases
  • Customer and Supplier management
  • Financial Reports
  • Bank Account Integration
  • Credit Control

On top of its own software, Kashflow offers ‘add ons’ to their software which allow you to broaden Kashflow beyond accounting. For example Kashflow doesn’t do payroll, but you can add on something called IRIS open payroll which can do that for you.

Free Agent

Free Agent markets itself as ‘painless online accounting’, offering to centralise all of your financial information and make it readily available to you in an easy to read manner. One of its big selling features is a ‘tax timeline’ which shows you how much money you owe in tax and when that tax is due, an excellent feature for those who have trouble staying on top of important dates.

Features

  • ‘Tax Timeline’
  • Invoices and Proposals
  • Expense Management
  • Financial Estimates and Proposals
  • Profit vs Loss statements
  • Free Agent makes a big deal out of its security, emphasising the secure connections, data redundancy and disaster recovery for everything stored on its servers
  • Certainly something you want when considering your financial data

Quickbooks

Quickbooks is a Jack-of-all-trades piece of software. As well as collecting all your accounts into one place for you, it can also do payroll and inventory tracking. The blurb emphasise the software’s ease of use, freeing the user up to do other non-accounting based tasks. It also has easily modified access systems, so that if you have an external accountant check out your books every now and again you can make it easy for them to do so without the fuss of sharing USB drives or printing off multiple reports.

Features

  • Invoices
  • Balance sheet
  • Cash Flow Statement
  • Payroll
  • Inventory Tracking
  • Ease of access to 3rd parties

Quickbooks advantage comes from its all-in-one nature, it offers the user a single piece of software with multiple uses other than accounting, and for the business on a budget that can be very attractive indeed.

Storing and using accounting software in the cloud is the perfect solution for today’s SMBs, as many don’t have secure resources on small networks and many don’t have good backup and disaster recovery procedures. With cloud-based accounts, not only can you store data away from the premises, but you can also make local copies to ensure that your accounts are always up-to-date and compliant with HMRC.