3 Most Commonly Asked Questions About Cloud Accounting for Small Business
Author: Patty Young ~ CHRL, CPB
Change is the only constant. Today that is truer than ever before. The pandemic has forced us to take quantum leaps forward if we hope for our businesses to — survive and thrive. Accounting processes are no exception; they need to evolve quickly to manage the need for remote access. Cloud accounting can help alleviate some the challenges that small businesses will have to face on the road to recovery.
If these difficult times have taught us one thing for sure, its that an online strategy is going a must for the future.
In the past, many smaller organizations ignored or tolerated the inefficiencies of their traditional accounting processes. The pandemic has pushed many businesses to address the need to have access to their accounting data remotely. The old legacy accounting systems just aren’t cutting it anymore!
Many business owners are considering cloud accounting as a viable option. They want to leverage the benefits in terms of cost savings, scalability, remote accessibility, and the security of the cloud. But how do you know if cloud accounting is right for your business? Understanding the ins and outs of cloud-based accounting is critical to making the right choice.
Here are the top three questions we hear most from those clients thinking about switching to cloud accounting:
1. What is cloud accounting?
Cloud accounting means your financial data can be stored, managed, and processed securely on the internet. There is no local copy; it lives remotely on a network of servers. When you use cloud accounting, you are using a Software-As-A-Service (SaaS) providers’ infrastructure and hardware.
All your accounting records can be accessed anywhere. All you need is a web browser or mobile device. So, there is no need to install software on your computer hard-drive. SaaS modules or cloud services are usually subscription-based and charged either monthly or yearly. Some examples of popular cloud services that you may already be using are Google Apps, Gmail, Zoom, Skype, Dropbox, Shopify, and Amazon.
2. How safe is cloud accounting?
Trusting the cloud is probably the biggest concern people have about putting their financial data online. Cloud accounting providers such as Intuit QuickBooks Online (QBO) will routinely backup your data to multiple servers. These servers are in various data centres located throughout the United States. For Canadian QBO customers, there is another permanent copy always stored right here in Canada.
QuickBooks Online has the equivalent security and safety level used in online banking. The data security QBO uses is AES256 encryption for all data processed and stored in their systems, and they use TLS for all data transferred in or out from external. There is also a two-step authentication, password-protected login, and firewall-protected servers for even greater security. Essentially, what all that techie stuff means is that the cloud is one of the most secure ways to store your financial data.
Cloud-based accounting is more secure than if you store your information on a local hard drive. When data is saved locally, there is always a risk of natural disasters, viruses, theft, or hardware failure. But, when data stored in the cloud, it is safeguarded from these types of threats by having multiple copies stored in various locations that are monitored 24/7.
Online accounting providers like Intuit are continually updating security and privacy protocol to ensure complete protection and privacy of your financial data (if you’re interested you can find out more about QBO’s security standards here).
3. How can cloud accounting benefit my small business?
Cloud accounting offers numerous ways to boost your productivity and increase your bottom line. Here are eight benefits of switching from traditional desktop software to online:
#1: Real-time = Real Insight
When your cloud-based accounting is up to date, you get an accurate snapshot of your immediate financial position. Traditionally, with desktop software, financial reports are only produced quarterly, so you’re always looking in the rear-view mirror. Cloud accounting puts your accounting records at your fingertips. You see real-time data to better understand your cash flow and profitability, so you can make better business decisions.
#2: Accessible Anytime, Anywhere
When your accounting records are in the cloud, you have access anytime, anywhere that you have an internet connection. So if you’re traveling or working remotely, you can always login and manage your business.
#3: Flexible Access and Cost Savings
When you log into a cloud computing provider platform like QBO, you are accessing their systems. Which means you can use whatever type of device you chose. You can use a smartphone, laptop, desktop, or tablet in a Mac or Windows environment. The cloud accounting provider fully supports their platform, which saves you money from purchasing extra equipment, servers, storage, software, and IT support.
#4: Automation = Time Savings
QuickBooks can automatically connect with your bank, credit card statements, PayPal, and other vendor accounts. All the information is there when it’s time to reconcile your accounts. You can also set up rules for recurring items to automatically post monthly transactions.
#5: Improved Cash Flow
In the old days, we had to print and then snail mail out invoices. Then wait for our clients to return their payments, which could take weeks or months. Cloud accounting lets you create an invoice online and email your clients right away. You can also get your payments using credit or debit cards, bank transfers, or incorporate an application to set up pre-authorized payment plans. Your cash flow improves when your payments come in quicker, no more wasted time spent chasing after clients for your money.
#6: Easy Collaboration
When you use cloud accounting, everyone on your team is working on the same numbers – instantly, from any location. Sharing data with advisers or remote employees is as easy as a click of a button.
The traditional desktop approach made collaboration with advisers difficult. If your accountant needed specific information, it would have to be emailed, faxed or sent by courier — this can be a time-consuming expensive process. But, with cloud computing sharing is effortless and secure.
#7: Automatic Backups and Software Updates
QuickBooks is continuously backing up your data, so there is no need to do a physical backup. Old desktop applications need to be updated periodically. But, with QBO updates are done automatically, so you are always running the most current version of the application.
Cloud accounting is more sustainable and better for the environment. Typically, with desktop applications, everything needs to be printed and stored for several years. If going paperless is a dream for your business, then the cloud is the way to go.
Within the QuickBooks Online, you can store electronic copies of receipts, invoices, bills, and timesheets. All of your documents are stored online in the cloud. You finally throw out those paper originals; this saves on the cost of filing space and storage costs. The Canada Revenue Agency (CRA) will accept electronic documentation, so no need to be hoarding paper for seven years.
Talk to us about moving to the Cloud
Are you convinced yet? If you are currently using a desktop-based accounting system and want to see first-hand how cloud accounting can benefit your business, please book a discovery call, and we can give you a demo of QuickBooks Online.
Are you thinking of converting from desktop to online? Our FREE checklist entitled: How to Convert QuickBooks Desktop to QB Online in 7 Simple Steps is for all you “do-it-yourselfers” types. The checklist will guide you through each step of the conversion process. Plus, you’ll also get the top QBO Experts Insider Tips. These secret hacks are what the pros use every day to double their productivity.
Please contact Patty Young at 1-800-946-9205 or at firstname.lastname@example.org