Cloud accounting software is talked about a lot these days, but is it just an advantage or is it a necessity, for your small business? It may be that you are comfortable with your own system, whether that is Excel or another desktop application. However, with the advancement of technology, the increased risk of security breaches and the new government incentive for Making Tax Digital, soon there may not be the choice.
Benefits of cloud accounting software for small businesses
Using a system that is based in the cloud has many advantages, including:
- Ability to work from anywhere, day or night and whatever time zone
- Unlimited, uninterrupted access
- Facility to have multiple users access the system, such as your partner, spouse or accountant
- Cloud accounting software typically works on all devices so you can check-in on your mobile phone then do more structured tasks from your laptop
- Capacity is not an issue
- Security of data is enhanced being stored in the cloud, rather than on your laptop
- If something goes wrong with your hardware you don’t stand to lose everything as your data is stored in the cloud
- There are no up-front software costs, as cloud accounting software is typically payable monthly (AJN offer a free subscription with all our accountancy packages)
- Upgrades happen automatically, usually without you even having to do anything
- If you keep your system up-to-date you have real-time information at your fingertips that helps with making key decisions on your business finances
- Significant time can be saved when the online software links to your banking feed, as you limit the amount of manual entry required.
Cloud accounting lends itself to small businesses that are mindful of their resources and time management. For some sectors it even allows benchmarking against similar size businesses of the same nature.
Making Tax Digital
Making Tax Digital is a government incentive that has been put on hold until 2018, but plans are going ahead nonetheless to get everyone filing and reporting their tax digitally by 2020.
This may include filing quarterly returns so tax can be collected by HMRC on a more regular basis, so being efficient with your record keeping is going to be essential, if not mandatory.
For many, this change will eliminate the requirement to complete an annual tax return, but this forces the business owner to be timelier with bookkeeping, a process that is greatly eased with the right system to support.
Keeping your data secure
In light of serious security breaches that happen frequently all over the world, data security is becoming high on the agenda for most business owners.
Even small businesses can be affected and become target of cyber crime. Whilst it is essential to following protocol when it comes to data storage in the cloud, when managed properly, it is more often than not safer than in your office or place of work.
What happens if your hardware is stolen? Do you have a recent enough backup? What if you experienced a lock-down due to ransom threats? If your data is safely protected in the cloud there is no need to panic.
Cloud accounting software is certainly an advantage to a business owner but very soon it could become a necessity. It pays to get on board sooner rather than at the point where you are being pushed.