On average, contractors, consultants and other independent professionals spend over 110 hours per year on their accounts (with 40% reporting that taxes and bookkeeping as the worst part of going it alone). That’s a lot of time to spend on fiddly administration when you could be working on contracts, finding new clients or simply enjoying the time instead. Thankfully, with the right tools at your disposal, managing your accounts has never been simpler.
While traditional desktop accounting software has been around for almost as long as desktops, small businesses are increasingly looking to cloud-based accounting solutions to manage their bookkeeping, expenses, payroll and annual tax returns. Cloud accounting is expected to proliferate over the coming years; with 90% of small businesses predicted to move their accounting activities to the cloud by 2020.
The cloud (short for cloud computing) is a general term used to describe data that lives on servers connected to the internet, instead of being stored on your personal computer. This lets you access data and files from multiple devices. The biggest difference in cloud storage versus traditional storage is where the data lives; externally instead of internally. It’s estimated that there are currently 1.8 billion global cloud users.
Cloud accounting utilises software that serves the same purposes as traditional accounting software. However, the data is stored on remote, external servers and can be accessed, interacted with and immediately updated through the internet anytime, anywhere.
So what advantages does cloud-based accounting offer and are there any pitfalls to look out for?
‘The beauty of this software is the flexibility it gives you to run your business from work, home, or on the go. It’s all online, so you can access your financial data from anywhere in the world. This means you can spend more time travelling, gaining new clients and taking care of other important business matters without being tied to an office or work computer.’
– Matt Poyser – inniAccounts, Director of Customer Experience
The key advantage of cloud-based accounting for busy professionals is the accessibility it offers. Data can be accessed and entered from any location meaning you can manage your finances and bookkeeping whenever it best suits you. Rather than spending a Sunday morning on your accounts, 10 minutes here and there between meetings or on your commute can be used instead. Many online platforms offer apps for smartphones and tablets, making it even easier to manage your finances, capture receipts and expenses or send invoices on the move.
The one disadvantage? You need an internet connection. This could prove problematic if you routinely find yourself out of data or with a torturously slow wifi connection. However, if you’re using an all-inclusive accountancy service; alongside your software, you’ll also have access to expert accountants and account managers who can answer your queries with a phone call.
As your data is entered into the cloud, it’s updated immediately. So, you’ll always be able to see your companies finances in real-time. You can be confident that you have an up-to-date picture of how your business is doing, no matter where you are. You can accurately make decisions, track your income and outgoings, take a look at financial forecasts and never fear an unexpected tax bill.
As well as providing you with an accurate look at your figures, this means you can interact with your accountant in real-time. With traditional accountants, you would likely have to send over a file and wait for them to review and get caught up. With cloud-based accounting, your accountant has immediate access to your data. Allowing them to efficiently offer more in-depth and timely financial expertise.
Price is always an important factor, and one of the main advantages of cloud-based accounting is that it’s usually the cheapest way to go. Firstly, there’s rarely any of the upfront costs you’d expect with traditional desktop accounting – you’ll be more likely to pay on a monthly basis which eases your cashflow. Unlike buying an accounting software package you won’t be paying for extras down the line, updates and maintenance will be taken care of by your software providers.
Cloud accounting applications are mainly subscription based, so you can pay for the package best suited to your business needs, no more, no less. That’s not including the time savings of increased accessibility, real-time reporting and overall efficiency.
The most common reservation over cloud-based accounting revolves around the security of your data.
‘Nothing is ever invincible, however cloud services have the best-in-class security protocols. The cloud remains one of the most secure ways to store information; remote storage rather than storage on a device is far more likely to keep information safe from breach.’
– Andy Stannard – inniAccounts, Senior Software Developer
For example, using cloud software, if your laptop is stolen as theres no data directly on your hard-drive, any access would still require your login. This also means that you don’t need to worry about lost data if you lose or change a device.
Cloud-based accounting and automation go hand-in-hand. By automation, we mean the use of algorithms and AI to process data to accomplish mundane tasks (such as entering your expenses, bookkeeping calculations etc.) Keeping data stored in the cloud allows automation at an unprecedented scale. This not only increases the efficiency for you, the user, but also for your accountant and the people behind the service (administrators, managers, designers, tech whizzes). They have more time to focus on recruiting the best minds possible, providing an excellent service, specialist training and working on innovations. All of which result in a better experience for you the customer.
One of the best parts of cloud software is the ease in which updates can occur and be pushed out without any additional cost to the user. Unlike traditional accounting programmes, cloud software will continually grow and evolve to suit the client’s needs. Some cloud-based accountants ask their customers for feedback which they then use to contribute to their product and service roadmap – so you can directly influence your service in future updates.
Cloud-based accounting with inniAccounts
Given the obvious advantages of cloud-based accounting, particularly for independent professionals, it probably comes as no surprise that there is a growing range of platforms to choose from. But not all services are created equal; it’s worth shopping around to find the package that best suits your business needs.
Here at inni, our real-time software ensures everything you need is in one place and offers you a life without guesswork, spreadsheets and a shoebox of receipts. Alongside our award-winning software, our team of expert accountants and dedicated account managers are always around to answer any questions and help our clients achieve their individual business goals. Innovation is what we do, from AI to receipt capture and live tax forecasts; we’re constantly developing our software and service to meet your needs.
Drop us a call on 08000337827, an email at firstname.lastname@example.org or visit our website for more information (you can chat with one of our team there too).