How cloud accounting software is changing modern business
The forecast for Australian business is looking decidedly….cloudy. Not in the meteorological sense, but rather the rapid adoption of cloud-based accounting solutions. Over the past decade, use of the somewhat mythical ‘cloud’ has become increasingly mainstream as business leaders seek ever-greater operational efficiencies. Nowadays cloud-based applications can be found in almost every corner of business. This very much includes financial management – something that sees the team here at Hill Rogers working with more and more of our clients via the cloud.
Of course, with so many cloud accounting solutions now available, it’s important to understand what they are and how you might be able to benefit. It’s also good to know what to be wary of before making the leap.
What is cloud accounting software?
In many ways, cloud accounting software is similar to traditional accounting software. The key difference is the software is hosted on remote servers. Your financial data is sent into ‘the cloud’ (usually via an Internet connection) where it is processed and then returned. In other words, all functions are performed off-site, not on the actual computers, devices or servers physically located in your business.
What are the benefits?
FLEXIBILITY. When used effectively cloud accounting can be far more flexible than using traditional accounting software. Your financial data can be accessed (on devices approved by you) from virtually anywhere in the world with an Internet connection, rather than on a few select company computers.
REAL-TIME DATA. Cloud accounting software updates your information automatically allowing you to access financial reporting in real-time. Regardless of where you and your team may be, there is only one ledger kept and that is the file in the cloud. This improves the accuracy of the information and therefore minimises errors at BAS and tax time. It also allows business owners to interact with their accountant in real-time, instead of having to send through the latest data file every time.
FEWER GROWING PAINS. When a growing business uses on-site servers and accounting software, they typically encounter greater software license and maintenance costs as well as new licenses and fees for database, systems management and other software. It can also lead to expensive capital purchases of new hardware, such as servers. With cloud-based solutions, you won’t get stuck with permanent, expensive equipment and licenses when your business contracts are up. Likewise, you’re far less likely to face costly hardware outlays when you expand.
REDUCED I.T. SERVICING. With fewer on-site servers, cloud accounting reduces your I.T. burden. The cloud provider is responsible for all hardware and software-related maintenance, and typically completes regular data backups with updates occurring automatically.
SIMPLIFIED SOFTWARE. Using cloud accounting software frees your business from having to install, maintain and license software on your individual computers and devices. Typically you just pay a single monthly access fee – usually far less than the cost of buying the software outright and then paying for annual subscriptions. The software is then automatically kept up-to-date by the provider meaning you won’t need to download updates such as new tax rates where the payroll module is used.
EASY INTEGRATION. Another benefit of moving your accounting system to the cloud is the ability to easily integrate a wide range of add-on applications into your business as required. These work in tandem with your accounting system to provide you with accurate, meaningful and personalised information about your business. Like most things, applications range in complexity and cost, but they can cover all aspects of a business including everything from inventory management, supplier payments and invoicing, to payroll, HR and debtor tracking.
Who provides cloud accounting services?
As we mentioned at the start, cloud accounting has become increasingly popular in recent times. This has seen the emergence of many different providers, however Hill Rogers believes the most sophisticated and robust services are currently provided by Xero, MYOB and Quickbooks. Each of these providers offer a complete suite of cloud accounting services, often with free data conversion from older software packages.
(NB. Obviously every business is different so be sure to check the exact details of what you require before making a decision on the provider that’s best for you.)
How do you switch?
Migrating your current accounting software to a cloud-based solution may seem a little daunting. But it’s usually easier than you’d think. Most of the major service providers offer their own conversion service for new users – and it’s often free of charge. While the length of time between conversions may vary depending on the complexity of your file, most conversions take between 3-5 working days. Generally the steps are:
- Upload reconciled MYOB or Reckon file to your conversion service provider
- Conversion service provider checks uploaded file
- Select whether a premium or free conversion is required – this dictates how much historical information is retained
- Details are reviewed by your service provider
- The converted file is provided and ready to be checked.
Following the conversion of your existing file, Hill Rogers is then able perform various checks and balances to ensure the information in your new file is correct and ready to be used. Should you require, we’re also able to assist you in getting the most out of your new software.
To discuss the conversion of your data file or any other aspect of cloud accounting, please contact the Hill Rogers Team here