Cloud-based accounting software have been on the market for several years. When implemented correctly, these enable our clients to catch up with their competitors and launch businesses forward. However, not every business has made the move towards cloud-based technologies despite their numerous benefits. Smaller to medium businesses often question the cost of the software as generally this would be an ongoing subscription model and not the one-off expense when purchasing off the shelf. Others are wary of the thought that their information is sitting up there in a Cloud and no longer in their control. While these concerns are understandable, we’ve found that bridging the gap of knowledge through speaking to our BDO business advisers or attending training sessions help SMB owners flip the switch completely.
The implementation of cloud-based accounting software has been written about in every possible way. After all, software like Xero has been available for years. However, the entire world has been shaken by the pandemic, making this an opportune time to look at the big picture. COVID-19 has altered the way most businesses operate, and consumer behaviours have radically shifted and are still stabilising as we go into the “new normal”. In fact, having really good accounting software available on the cloud actually set up a lot of businesses well to manage the lockdown period. It’s now more important than ever to integrate future-proof accounting solutions that give your time and energy back to the parts of your business that need it, and taking strides now to improve efficiency wherever you can will not only help your business survive, but also thrive.
Benefits of cloud-based accounting in the current economic environment
At the height of the pandemic, a good, functional cloud-based software was a welcome tool for many businesses. In fact, this period highlighted its most significant capabilities:
- The ability to work from anywhere as long as there is an internet connection
- Accessibility from other mobile or personal home devices if required, no reliance on desktop software or backup files in the office
- Proven reliability & security with minimal issues (if any) with accessing software even in peak times
- Features that have allowed us to continue to work smarter by automating time-consuming processes, document filing within the software and integrating with other applications and freeing us up to concentrate on working on the business (or looking after our staff, customers, suppliers, etc.)
- Having real-time data at our fingertips to help understand the financial position of the business and make critical decisions based on this data
We discuss these benefits in-depth below.
Informed Decision Making
Keeping your software up to date, reconciling transactions on a regular basis, and having access to timely and accurate information—these are all key features of cloud-based accounting software. With access to concrete, real-time data, you gain better insight on the next best steps you can take.
In addition, good software should have reporting capabilities that are both standard and customisable to suit your business. This lets you view the relevant information you need quickly and accurately. If you’re considering expansion, for example, and need to know where you are financially, you can compare profit and loss, analyse customised KPIs, and publish your findings to support this decision.
Automation & Memorisation
When it comes to efficiency, what we’re really highlighting is time and energy conservation. Therefore, tools that allow for automation and memorisation are key. Some accounting software, including Xero, can look back on transactions and identify patterns, memorising data and automating the transaction reconciliation. They can even identify repeated invoices sent to the same supplier, taking over and automating invoice sending via email. This frees up your time, allowing you to dedicate energy into other areas of the business that otherwise would have been spent reconciling or invoicing.
Time is money, and knowing about your money takes time. This is especially true for one-man-bands and small-to-medium enterprises that operate without a dedicated accounting team. With cloud-based accounting software, time that needs to be partitioned off for manual tasks is drastically reduced.
Integration with exterior stakeholders
Integration not only optimises your business’ interaction with external entities, it also ensures you complete essential tasks. With a properly integrated accounting software, for example, you can send GST returns directly to the IRD at the touch of a button.
Not only that, the software can accurately calculate the return for you, which makes tracking your GST effortless. You skip all the manual filing, eradicate potential duplicates, and remove human error from the process almost entirely. In fact, this creates a financial hub for anyone in the business to find relevant financial information.
Peripheral software solutions and sustainability
Cloud-based apps are—by sheer virtue of being cloud-based—entirely sustainable. They allow companies to transition into a paperless way of life. If business owners can embrace this paperless, cloud-based process in all aspects of their enterprise, they can integrate the entire business with technological solutions into one giant, well-oiled machine.
There are a number of peripheral apps that work alongside accounting applications, allowing cross-platform automations and the creation of targeted, business-relevant information that don’t need to be printed on paper. Workflow Max, a project management software developed by Xero, tracks client jobs and employee timesheets, and presents this data in a series of buildable digital reports.
Remote accessibility
With applications like Xero, business owners can check their numbers from anywhere and on any device. Working from home during the lockdown highlighted this benefit, as it allowed a lot of businesses to continue operations from separate locations.
Holistic implementation of cloud-based software
Looking forward, the cloud is the way of the future. If businesses both big and small don’t begin to use cloud-based solutions, they’re going to be left behind. This is especially true in a world that has been forever changed by a pandemic. Furthermore, by making your business easy to deal with, you’re encouraging customers to engage with you and prolonging the lifespan of your company. However, these benefits only ring true if the applications are integrated with the proper expertise and care.
If you are looking into implementing new cloud-based software, it’s best to also review your current accounting processes by asking yourself the following questions:
- Why do we do this process?
- Does it take up time that could be used elsewhere?
- How could make it better, faster, more reliable?
We cannot overstate the importance of holistic implementation. When providing professional accounting advisory services, we generally advise that businesses implement cloud-based accounting software as well as review their processes in one fell swoop. Many businesses have incorporated cloud-based accounting software into their business without reviewing their administrative processes to work seamlessly with the new software. Our advice is to integrate the two instead of simply adding the software on top of what you already have. If this is a daunting prospect, our partners can help you find efficiency opportunities and advise on how to restructure your processes.
Prepare your business for the future with the accounting specialists at BDO.
Here at BDO, we specialise in creating and integrating financial solutions, helping you interpret the financial information you receive and create actionable business plans. Embrace the functionality offered by cloud-based technology and get the integration right. To prepare your business for the future, reach out to one of our expert advisers today.