More and more businesses are transitioning to cloud accounting to take advantage of its many benefits. For those who haven't, we have outlined the questions we are asked by clients to help you to understand more about cloud accounting and how it can help you and your business.
What's the difference between cloud and desktop accounting software?
To use desktop accounting software, you must install it on your computer - standalone or server - and run it there. All the data relating to your accounts is also stored on your computer, subject to your back-up procedures. Cloud accounting software runs on the internet and there's nothing to install on your computer. To access the software, you visit a website and sign in with a username and password, which means you can use cloud accounting software from virtually any computer, most tablets and smart phones, anywhere you have an internet connection.
Why would I benefit from switching to cloud accounting?
The primary benefit of using cloud accounting is the mobility. Cloud accounting software tends to be more user-friendly and requires less technical expertise to set up. Being able to log on to your accounts from any device with an internet connection means you can generate invoices on the go or process payments immediately, saving you time and effort.
Data capture and entry are more automated using apps reducing the time spent on that element of your business. Your data is always safely secured and backed up online, so you never need to worry about your computer crashing and losing your data... ever.
You will also be compliant with HMRC’s Making Tax Digital for VAT regulations arriving from 1 April 2019.
Another potential cost saving for a business is the fact there is less requirement for IT hardware with the use of cloud packages. A good internet connection is important but you no longer need to ensure your in-house server is up to the latest specification to use resource intensive desktop applications.
Do we need to know about accounting to use accounting software?
No is the simple answer. Most cloud accounting packages are designed for non-accountants to use. The right accounting software can make your accounts more accessible and easier to understand. You will find that accounting software helps you identify trends, spot opportunities and give you confidence that you understand where your company stands.
You will need some basic accounting knowledge to use it - if you put inaccurate information in to your accounting software, you'll get inaccurate figures and information out. So it's still wise to have some basic knowledge, like your accounts payable and accounts receivable. However, another of the advantages of cloud accounting software is the ability of us as your accountant to log into the live data with you should questions arise.
How do I choose the best cloud accounting packages which would work for me or my business?
We can help you evaluate what you need from a package by considering your existing accounting methods, take into account your plans for the future business, and for you personally, and ensure the software package, with any ‘add-ons,’ fits with your needs and works with your current business processes.
We will ask some key questions about you and your business which will help to ascertain which software package you should use or trial. We also suggest that we get key employees involved when evaluating different packages as they may be able to provide a different perspective, or offer helpful insights into how the software might be used.
What would happen if I had a technical problem?
We are here to help you during working hours and with our experience it would likely be a simple issue we have resolved before. However most established providers such as Sage and Xero have dedicated support teams available 24/7, 365 days a year.
Will Cloud accounting help with tax issues?
Yes in terms of providing the base data with which to calculate potential tax liabilities. With one of the benefits being shared access with us as your accountants and with the help of automation the accounting information being more regularly up to date, we can help plan for potential liabilities.
How secure is my data?
Your data is hosted on secure servers with multiple sites in order to provide resilience against server failure. Most if not all cloud accounting software providers use 128 bit encryption and also two-level user authentication for access.
If you have any questions which we haven't covered here, please give us a call on 01242 776000 or come in for a chat over a coffee. You can also use our contact form at the bottom of the page if you would prefer to submit a query online.
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