The COVID-19 pandemic has propelled a rapid shift into a digital-only mode for companies of all sizes and in all lines of business. Moreover, meeting tight deadlines and providing high-quality services are more important than ever to build trust in these uncertain times.
In this context, moving the bookkeeping function onto the cloud is a cost-effective, time-saving and future-ready move for companies to make. Here are some reasons why cloud-based bookkeeping is not just a nice-to-have for your small business, but a must:
1. Cost benefits
Cost-saving is a priority for small and medium businesses in particular, and moving the bookkeeping function to the cloud can help your company better manage cash flow.
For example, instead of paying a substantial one-off fee, you can spread the cost of the bookkeeping software by paying monthly.
On the cloud, everything is paperless, and the software streamlines all the accounting processes without human intervention needed, which also leads to significant time savings.
2. Scalability
Cloud technology comes with the significant advantage of scalability. If a small business starts growing rapidly, or if one company acquires or merges with another, cloud services can be scaled up as needed.
With infinite storage available on the cloud, there are no limits to the number of functions, departments, accounts or business acquisitions that your company can add. For the same reason, the costs of scaling up are negligible.
3. Accuracy and time savings
Manual bookkeeping is highly prone to error, as accountants are likely to miss out or incorrectly read a few entries while analysing hundreds of them at a time. Spreadsheets rely on correct formulas which can easily become corrupted giving incorrect data and go undetected for months – if ever.
By contrast, cloud accounting software can quickly scan as many receipts and statements as needed and do the necessary calculations in a fraction of the time.
Automation also reduces errors, especially with built-in checks to ensure that nothing is missed out or wrongly entered. Using a cloud bookkeeping software, you can generate invoices and set reminders to avoid manually tracking debtors.
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4. Real-time information on your fingertips
Cloud-based bookkeeping services come with tools that allow you to stay up-to-date with real-time information, which can be accessed from anywhere in the world and on any android or Apple device.
For instance, some services can automatically compile all bills and financial statements under one hub, pull critical data from each of them and publish the data securely on the cloud.
That allows you to reconcile the company accounts daily and close all the books within a day or so of the month’s end, thus saving time and resources.
Moreover, automated bank feeds, available for most UK banks, enable you to track the business’ balance sheet in real-time. You can view various reports to get an up-to-date snap of your company’s finances.
5. Outsourced talent acquisition
While the pandemic has made remote work a necessity, it makes sense in normal times as well. Moving bookkeeping to the cloud allows your small business to maintain an outsourced bookkeeping team that can log in from anywhere – irrespective of their geographies.
An experienced bookkeeper would not only ensure accurate, quality work and give you peace of mind but also save costs on in-house staffing and infrastructure.
6. Disaster recovery
Sadly, your business is under constant threat of data loss or cyber attack. A recent cybersecurity report showed that the UK incurs about £190,000 worth of cybercrime losses daily.
Moreover, in an on-premise setting, threats like vandalism or natural disasters could lead to hardware damage or data being compromised. Data protection in such an unfortunate setting can be time-consuming, resource-intensive and inefficient for your business.
Unlike traditional disaster management, cloud disaster recovery solutions are simple to initiate by the cloud provider. And apart from the automated data backups, most cloud providers retain backed-up copies of client data for a while, which is useful in case auto-backups don’t happen.
7. Integration
Cloud-based bookkeeping allows for secure integrations with other applications and software that your small business may be using, such as HR and payroll tools, CRM systems, loyalty management programmes, and email marketing platforms.
For instance, if you combine your bookkeeping software with HR and payroll apps, you can also automatically generate payslips and other HMRC documents. That helps to streamline overall business operations and work smoothly and efficiently.
8. Business growth
When bookkeeping is moved to the cloud, your small business no longer has to worry about mundane tasks such as entering costs into Excel sheets. This frees you up to focus on critical tasks such as building client relations or charting the strategic growth of your company.
Moreover, cloud services can be equipped to collect and compile data about your financial history, which can give you essential insights into what the company is doing with its money and how finances can be managed more efficiently. Our bookkeepers in Edinburgh know this very well!
Summing it up
Migrating your existing bookkeeping system is an easy process depending on which cloud software you choose. We recommend Xero to our clients as it is an excellent platform to automate daily business tasks and get an updated overview of financials, on-the-go.
The best part is that Xero integrates with many small business CRMs, productivity apps and customer service platforms. If you are interested in moving your bookkeeping on Xero, we can do it for you for free.