Many of us are now familiar with what ‘Cloud Computing’ is, in the mystery world of information technology and how it can be used in our day to day lives. It is defined as ‘the practice of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer’. But what exactly does Cloud Accounting entail?
Cloud Accounting systems have become very popular over the last five years or so. You may have heard of Xero, FreeAgent, Sage One, Quickbooks just to name a few. All of these software providers allow users to log in anywhere in the world, so long as their is an internet connection,and access their accounting records. A lot of them also have Apps you can access on your phone that allow you to do certain tasks via your mobile or other devices. Benefits of this include the backup aspect, I have had two computers fail on me and losing any unbacked up accounting files especially if you are someone who really doesn’t enjoy updating their accounts, can be quite soul destroying!
Which Cloud Accounting Package Should You Use?
As an accountant, I often get asked which is the best cloud accounting software to use. It really does depend on your business size and sometimes what your business does as some cloud accounting software cater specifically more for certain industries where others work well across the board for all.
I do have my favourites, absolutely. As a practice we use Quickbooks Online, partly because of the great prices we can get this software, for our clients at (starting at just £6 a month) but also because of the Live Chat feature. This is a great feature, a UK call centre open 8am to 8pm Monday to Friday, who are really helpful. The reason this feature works well is because when you are in the middle of completing a task and you are unsure how to do something, you can click on the Live Chat and double check the right way to do it via Live Chat, at that time as opposed to having to send an email to the support team and wait for them to respond to you before continuing on with the task at hand.
The key advice I give all my clients and anyone who asks, is always to try a few different cloud accounting providers at the same time. All cloud accounting software has free trial periods for 30 days. Have a look at the prices, the features and pick at least two to try out at the same time.
Tips during the Trial Period
Make sure you import your bank transactions and use the reconciliation facilities they all have because all are different in their approach to this task, some are definitely better then others.
Use the support staff. Email them and phone them, don’t be afraid to ask that silly question, they’ve heard it all before and they don’t think it’s silly. Watch the videos, look at the support tools and guides at hand – Freeagent for example has an excellent range of guides aimed at sole traders that are explained jargon free and in plain english and available for free to everyone.
Step back and have a think about what you want out of your accounting software. Do you want to run a number of reports, looking at your customers, top sales etc? Again some on the market are better then others in the range of reports available for you. On the flipside, if you are only ever going to want to run a profit and loss report, then if you are using a cloud accounting package that focuses on a wide range of reports, weigh up the cost of the overall package in comparison with the fact you are unlikely to utilise that functionality. Reckon One is a good example there, most accounting packages include project billing facilities that a large percentage of micro businesses will never use, so at Reckon One you can de-select that module and your monthly subscription price of the cloud accounting package goes down.
One of the big advantages of cloud accounting software is debtor management. Sending electronic invoices to your customers, will help you to get paid quicker. Again, different providers have varied functionality with this area. Some have better overdue notices and reminders. All will have the option to set up recurring invoices, which is a great time saver for you – let the system send out the monthly invoice for the same amount as opposed to you having to remember to do this task yourself each month.
Is it worth the price?
You will at the end of your trial, know which cloud accounting software you prefer. If that turns out to be the more expensive one, then it is worth investing in, because you will be encouraged to use it because you like it and you feel you can rely on the support team.
Why to look at it now
Using cloud accounting software is going be more important in the coming years, with HMRC’s introduction of ‘Making Tax Digital’. This initiative is relying on taxpayers to use and pay for Cloud Accounting software to complete tax compliance tasks. They are looking for taxpayers to move away from Excel spreadsheets and onto a digital system. For those who use a Cloud Accounting package already, this will be less of a shock so it’s a great idea to pop this on the higher part of your To Do List and see how you get on with using a cloud accounting system for your financial record keeping.
For more information on Cloud Accounting, please do get in touch. We have discounted rates with Quickbooks Online, Freeagent and Clearbooks and are more than happy to talk through the different options and packages available, with you.