Don’t get left behind the Cloud Accounting revolution

Whatever your business plan is for 2017, be it boosting profits or recruiting new staff, Cloud Accounting can arm you with the right information to keep your business on track.

How does it work?

In simple terms, this web-based software examines company accounts and finances in real-time, extracting data to give you a visual snapshot of how your business is performing on a daily basis.

This can include graphical dashboards that track Key Performance Indicators (KPIs), such as whether your business forecasts are on track and non-financial information, such as lead generation.

Data can be linked to industry averages and accessed via remote devices so you can share vital information with your team, advisors or bank instantly, wherever you are.

The benefits

There are many ways in which Cloud Accounting can support growth plans and simplify financial processes, including:

  • Business improvement – creates easy to use financial forecasts and monitors them daily so you can see instantly if margins aren’t being made and make adjustments; for example, altering a pricing model, or product mix. Data can also be used to spot business opportunities early on so you can act ahead of the competition.
  • Better decision-making – provides a real-time view of finances across a business, or group, enabling you to make fully informed decisions. Financial forecasting tools also help with those strategic “what if” questions, for example, “what will happen if we put up prices?” or “can we afford to recruit?”
  • Healthier cash flow – automated processes for invoicing and chasing up payments with reminders help to reduce debtor days and improve your cash flow.
  • Cost and time savings – tasks such as bank reconciliation, bookkeeping, and payroll and expense management are simplified and all information is held in one place. This means less manual data inputting and reduces the need for your teams to prepare and analyse different documents, freeing up their time for other tasks.
  • Improved compliance - increased automation ensures you don’t miss HMRC reporting or payment deadlines and that your business is ready for change, such as HMRC’s Making Tax Digital programme (if implemented, this means that companies need to be ready to pay their Corporation Tax quarterly from 2018). Furthermore, all financial data is backed up and stored securely in the Cloud for a minimum of six years in order to comply with HMRC requirements.

Is it expensive?

In short, no! Businesses pay a monthly Software-as-a-Service (SaaS) subscription and systems update automatically without any expensive upgrades. The cost for a medium-sized Cloud Accounting package, including support, can start from £22 per month (source: Xero).

Is my business ready for Cloud Accounting?

There has to be an appetite for change and a basic level of IT literacy within the business to start with. It’s then a matter of reviewing the systems you have and working out how you would use and benefit from the technology.

These assessments are usually best done through your professional advisor, or an accountant with Cloud expertise. If you decide to go ahead, your advisors should be able to recommend the Cloud Accounting packages suited to your operating systems and business requirements.

Sage, Xero, Quickbooks and Kashflow are the main software vendors and usually offer a 30-day trial period with online tutorials. There are also product testimonials and user forums that you can refer to.

Other considerations

Timing is important. Whilst it’s possible for businesses, even with more complex finances, to switch to Cloud Accounting in less than a month, there may be Year-End considerations, or more preparation time needed for getting your processes, systems and accounts ready for the Cloud. Any switchover should always be implemented on a case-by-case basis.

Finally, it’s worth pointing out that Cloud Accounting isn’t meant to replace your accountant! If utilised fully, it should increase the amount of collaboration you have with your advisors to check and fine-tune your business performance throughout the year.

To discuss Cloud Accounting and how it can help your business, call Debbie Boulton to arrange a meeting to run through your options and the costs involved.