Why Cloud Accounting Will Help Your Small Business

A recent survey by CBeyond revealed that cloud computing is gaining popularity among small to medium-sized business leaders. Of the 435 respondents who owned or managed an SMB, most cloud adopters reported significant advantages to their business as a result of the technology. 83 percent said the cloud increased their flexibility, 78 percent said the cloud makes them more productive and 71 percent reported that the cloud is cutting their costs.

Cloud accounting means that material that would otherwise reside on a desktop is delivered to an organization’s computers and devices as a service via the internet. This type of application is known as ‘Software as a Service’ (SaaS). Other terms under the cloud umbrella are Infrastructure as a Service (IaaS) and Platform as a Service (PaaS).

If you’re familiar with the term ‘cloud computing’ but aren’t exactly sure what it means, take a look at Xero’s cloud computing guide for a quick, simple explanation of what the cloud is all about.

So, why should you be doing your small business accounting in the cloud? Here’s a breakdown of some of the main benefits.

Convenience

One of the great things about the cloud is its accessibility. Instead of having all of your software and all of your information stored in a local place, you can actually have it stored off-location and accessible from any number of devices.

This means you can authorize the appropriate users to access your organization’s financial information from any device with an internet connection. Unlike desktop packages, you can set an unlimited amount of users at no additional cost.

So you can maintain high levels of productivity no matter where you are, or what time it is – you can get to your data from the office, at home, on a business trip, in a café or airport… the possibilities are nearly endless. Several people can work on documents, spreadsheets, or presentations without having to be in the same room in person. If they need to chat at the same time, they can use ‘Voice over Internet Protocol’ (VoIP) services such as Skype (another of the cloud’s heroes!).

Remote culture

By using services and software in the cloud, organizations suddenly have a global workforce at their fingertips. With access to services and talent no longer restricted by timeframes, schedules or geographical boundaries, it’s much easier for teams to work together from different places.

There’s been plenty of coverage of the pros and cons of remote culture recently, in part thanks to Yahoo CEO Marissa Mayer’s ban on working from home. Some believe that working from home is detrimental to productivity, yet others have embraced it as a better way of working.

Virgin Group founder and chairman Richard Branson has denounced Mayer’s move, calling it “a backwards step in an age when remote working is easier and more effective than ever.

“If you provide the right technology to keep in touch, maintain regular communication and get the right balance between remote and office working, people will be motivated to work responsibly, quickly and with high quality.”

And in fact, an increasing number of businesses are singing the praises of remote culture, reporting that employees are more productive, engaged and committed.

Reduced cost

Cloud accounting is cost-effective. Your business pays for software via subscription – so there’s no need to invest in desktop software or potentially expensive hardware. This creates significant savings for small businesses that often lack the funds to pay for the latest technology.

In addition to this, there’s no need to shell out for upgrades – the provider can install updates from their end, free of charge. The added bonus to this is that you always have the latest version of the software.

Nothing goes to waste. There are plenty of free trials for online accounting software about, so you can make sure that the one you choose is right for you. When you subscribe, the cost will be based on what your needs are and you can you can build on your package bit-by-bit with add-ons, until it’s tailored to fit your business.

Security

While security concerns may cause some small business owners to be wary of the cloud, data stored in the cloud is extremely secure at both the provider and user end.

For their product to be of any worth, cloud suppliers invest in experts who can ensure their service employs the most up-to-date security technology – so the average desktop is in fact a lot easier to hack than their service!

Furthermore, even if your equipment is lost, stolen or destroyed, your data is still sitting safely in the cloud.

Improved business performance

The ability to focus on your core service is one of the major benefits of using a cloud service. In addition to the reasons listed above, you:

• won’t have to rely on an IT team – rather, you’ll have access to industry-specific experts should you encounter any problems
• are working in real-time – so you have access to up-to-date financial reports and dashboards
• are constantly connected to the rest of your business – making it easier to set and strive towards clearly-defined goals
• can easily rework your package, so there are no restrictions on growth or changing business conditions – a huge benefit for startups in particular.

Have you thought about switching to cloud accounting software as a practical, secure and inexpensive way of managing company finances?

Lucy is the Outreach Coordinator at Xero, a provider of web-based accounting software designed for small businesses. She lives in Wellington, New Zealand, and offers advice to entrepreneurs, startups and small businesses on cloud computing, marketing, technology and finance. Connect with her on Twitter @LucyJaneGodwin

Image courtesy James Cridland

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