Cloud-based accounting software can do a lot of a variety of positive things for businesses. This content sets out some of the practical and basic benefits that my firm and I have encountered in the past three to four years in our practice and with our client base as we moved to become an almost completely technology-integrated firm through the use of cloud software.
The Attraction of Cloud Accounting Software
The main driver behind our technology-driven move was the demand from our clients for accurate and timely financial data and the capability to analyze the data to gain a greater understanding of their business. Additionally, we needed to decrease the amount of paperwork and processing time that we required.
Businesses that take on an integrated approach could achieve significant efficiency and also the capability to analyze the company more in-depth through the management reporting in this article.
1. Receivables/billing
Invoices sent via email to the correct email address directly to the software for accounting provides many advantages, among them:
There are no postage or head paper charges and no delay in the delivery process to the customer.
- The certainty of delivery
- Quick payment because your customer can tap the invoice and pay it with either a credit/debit card or alternatives like Stripe and PayPal.
- The capability to chase past due bills and issue statements with the press of a button. Since reconciliations of bank accounts are up-to-date, the receivables account is updated in real-time.
- You can bill your mobile or tablet device at any point.
- The management system of stocks linked to invoicing supports more efficient order processing and reduces waste.
- Invoicing linked to project management and time management systems can move from the work in progress stage into the invoicing phase quicker and more efficiently.
2. Accounts payable/expenses to be paid
Technology today allows you to take pictures or bulk scan paper invoices and view the details. It can provide bill information about suppliers such as invoice numbers, invoice numbers, and other expenses according to the correct line in the ledger. VAT deductions can be made without any manual intervention.
The invoices you receive via email can be redirected to your program, or you can provide the supplier with an email. Which is connects directly to your program. There are many advantages to this:
- Material time savings – particularly in companies that have numerous suppliers
- Simple storage – invoices can save online for up to six years.
- Instant recall: any invoice from a vendor, and cost line is remembered and displayed on the screen, or printed out in minutes from anywhere, provided you’re connected to Wi-Fi and have internet access.
- Fewer errors – because the data is not manually typed to data.
3. Bank reconciliation/transactions
The most efficient solution is when your bank transmits the history of your bank transactions in your accounting program, which, in turn, examines the data and matches each transaction to either a creditor or debtor or previous transaction. The only step that the accounting department needs to do is verify the transaction.
Banks located in Ireland are currently behind in supplying data directly to third-party software, but it’s only a matter before it is a standard. In the meantime, it’s simple to download your bank transaction history into the format of a CSV file and then upload that into your accounting software or scan bank statements by using recognition software. That creates journals and can use in different cloud-based applications. The major benefits of reconciliation offered by cloud-based applications are:
- The time to enter data is cut by a tiny fraction time required for a standalone program.
- Keying/reconciliation errors are eliminated.
- Creditors and debtors are correct and up-to-date.
- It assists in making management accounting real-time.
- It gives more precision to the financial health of the company.
4. Management reports
The biggest win for me is in report-writing and analytics. The ability to design and create reports that present an accurate and clear overview of the business to the board or management team is where the value is.
Management reporting allows decision-makers to establish clear and precise Key Performance Indicators (KPIs), which can be tracked through time tracking software and monitored. Consolidating financial information – whether for multiple locations or companies or providing more understanding of a single entity. The ability to present it in clear dashboards that incorporate numeric and non-numerical information is a benefit. The ability to cut and dice the financial data comes with many advantages and benefits:
- The company’s financial overview – whether monthly, weekly, or quarterly – is more detailed and gives more confidence to those making decisions.
- Budgeting and comparing to previous times can do more efficiently.
- The ability to develop scenarios that include three-way forecasting of the cash flow and balance sheet.
- An attractive graph or chart can help make reports more appealing, especially for those who aren’t mathematically inclined.
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It is essential to get buy-in from upper management, especially the controller/director of finance.
You’re creating a shift in context by shifting away from an activity heavily driven by input data to one driven by less technology that could end several currently used processes. The result is better, more precise and timely financial data to make decisions is worth the effort.
- Another obstacle to overcome is deciding the best software and when to move. In deciding on your primary accounting program, you should consider the following aspects:
- The flexibility and ease of moving information from software already in use through CSV files are typical.
- Ensure there’s a huge market for add-ons to other programs you might want to integrate your accounting software to – point of sale software and project management systems, feeds from banks, etc.
- Many software companies offer videos or ongoing tutorials on using their software to the best benefit.
Summing it up
Cloud accounting refers to the practice of making use of accounting software accessible through the internet. They are referred to as ‘desktop-based Accounting Systems’. Since cloud accounting systems are based on the internet, it is possible to access your data. Wherever on any device with an internet connection with apps or web browsers.
