Cloud-based systems are on the rise, both in personal and business use. Where many have been reluctant to get involved due to mistrust or lack of knowledge, others have already seen the benefits of using the cloud as an everyday part of business.
Research from the Cloud Industry Forum (CIF) published last year found that general cloud usage was up 84% in the UK. 78% of cloud users were also using more than one cloud service.
The number is expected to be larger now as cloud systems grow in popularity and efficiency. CFI predict that of those businesses already using cloud systems, 75% are expected to increase their usage this year.
Alex Hilton, CEO of CFI said “it should come as no surprise that digital transformation is creeping up businesses’ agendas as they seek to stay ahead of the competition. Cloud is very much part of the digital transformation agenda, and it is clear from this research that those companies with plans to digitally transform, struggle to do so without the delivery model.”
People have been using cloud storage for a while but now people are starting to trust the cloud with their finances. Cloud based systems are now more reliable and secure than ever. This has meant that cloud accounting is on the rise.
What can you do with cloud accounting?
You can use cloud accounting to track your cash flow, budget and profits. However, you can do more than simply record your finances. You can use accounting software to create invoices and pay bills, manage your taxes, track expenses, supplier bills and payments.
It differs from traditional accounting software because it doesn’t require a base to work from like a company computer. It can be accessed from anywhere through the cloud making it easier and more secure for you and your accountant.
How can cloud account benefit businesses and freelancers?
You can access it anywhere
Cloud accounting is great for the on-the-go entrepreneur. All you need is an internet connection and you have instant access to your accounts. This can be great for freelancers who move between their home office, co-working spaces or entrepreneurs who travel a lot.
Real-time view of cash flow
All your data is accessible instantly and is kept up to date. All you have to do is log in wherever you are and you have instant access to your financial records in your pocket.
Security is often cited as a concern but cloud accounting is actually safer than PC bound accounting software. If your laptop is stolen or there’s a fire at the office, cloud accounting allows you to simply log on from another device without losing any of your information.
Cloud accounting can only be accessed by your log in details. Most cyber security breaches are down to not securing your log in information. As long as you’re careful, cloud accounting shouldn’t pose a threat to your business.
Easy to back up
Though the cloud will be protected if your computer should break or get stolen, your cloud-based finances are also easy to copy and make much-needed backups so that you’re never caught out without your records.
Allows multiple users
You can assign multiple users to your cloud accounting software. This allows companies to work collaboratively with ease so that multiple users can update the records themselves without having to pass everything to a dedicated accountant.
Generally cloud accounting is cheaper because accountants who are primarily based online will have lower overheads. This means that they can pass that saving onto their customers and charge lower fees than accountants who require large office spaces in major cities.
Takes up less of your time
Rather than hiring a traditional accountant where you have to travel to and from their office, carrying records around, cloud accounting allows you do all of this online, saving you time you could spend on actually making the money you’re keeping records of.
With all the information submitted online, there’s no need to invest in chunky filing cabinets to store all your records. As long as they’re backed up (in multiple places) you can dramatically decrease the amount of paperwork you have to wade through.
This is great news for those freelancers who work from home and simply don’t have the space to be storing piles of paperwork or those with small children who might misplace important documents when you’re not looking. The baby ate my tax return isn’t a valid excuse for HMRC unfortunately.
How can cloud accounting benefit accountants?
It’s not just customers who have embraced the move to cloud based accounting. Accountants themselves appear to enjoying some of the benefits too.
Better client relationships
Due to the ease of access and regularity of updates through cloud accounting, accountants are able to form better working relationships with clients.
Less data entry
As accountants won’t have to deal with piles of financial records, they don’t have to waste time with tedious data entry. They can get right down to working on your accounts and tax needs.
Can attract big clients
Cloud accountancy is the future. Those accountancy firms which embrace this quicker are more likely to be at the forefront of the industry. They will find it easier to attract bigger clients who want a firm who is experienced in new technology and modern expectations of accountants.
Providing online accounting as a service is going to become a necessity for most accountants in the future. One way to get ahead in the industry is to embrace it now and win those clients who want value and ease of service.
Lee Murphy, Managing Director at Pandle cloud accounting had this to say about the future of the industry: “Like many industries automation, machine learning and more efficient processes are having a huge impact. Cloud accounting has hugely increased automation in bookkeeping and that trend is set to continue.
At present, a user’s banking transactions can be automatically populated into cloud accounting software like Pandle. The user then simply selects the categories or sets rules for certain transactions, meaning that the software categorises them automatically. This is gradually eradicating the messy spreadsheets and arduous bank reconciliations of the past.
As more and more business owners adopt cloud accounting and as HMRC move towards digital submissions (ending the requirement for tax returns), we see the process of bookkeeping as a thing of the past. Instead the business owner will set up systems and let technology do all the work.
This will obviously have a big impact on the industry, meaning that the role of bookkeepers and accountants will change. We believe there will be no place for number crunchers in the future but rather technical advisors, either helping businesses with their systems and/or offering specialist tax and business advice/strategy input.”
Written by Kara Copple – Online Content Writer for The Accountancy Partnership