At NCA, we believe that the advantages of cloud based accounting software will save you time and money. Scott Mitchell explains the cloud and discusses the benefits of cloud accounting packages.
Cloud based accounting, what is it? How can NCA help?
You may have heard the names MYOB Live Accounts, Xero, Sage One and a number of other cloud based accounting software providers, and wondered what those programs do, if you should switch and if there are benefits for your business in switching to this new technology.
To best explain, software as we know it is moving from a product that we have previously purchased in a box and installed on our desktop computers, to software now being offered as a service. This means that rather than owning a product outright, you now pay to access the software on a periodic basis, usually monthly.
The difference with this approach is that the software (in most instances) and any associated data is never physically stored on your computer but rather at a remote site which is accessed when connecting to the chosen programs website through the internet.
The "cloud" is simply a metaphor for the internet and remote storage.
The benefit of software and data being stored in the cloud allows access to that information wherever you may be (provided you are connected to the internet). This means that you are no longer restricted to the computer that has a particular software installed on it (as has been the case in the past). This freedom of use allows access to information anywhere, whether it be at an internet cafe while on holiday, sitting in front of the TV on a tablet or even on a mobile phone.
Being connected to the cloud has led to a number of new features within the various software offerings, these being:
A bank feed is where transactions are automatically sent to your accounting software from the bank (in most instances live or within 24 hours of the transaction), which can then be automatically allocated to the relevant area in the financial statements. Once a transaction has been entered the software will “remember” that transaction when it next appears and automatically process the transaction to the specified account allowing real time reporting and analysis of performance.
Not only is the availability of real time information useful but there is also a massive reduction in time spent carrying out data entry as the software learns over time where to allocate the transactions without the need for physical input of that information by you or your bookkeeper.
This has two benefits, one being that the risk of human error in data entry is almost totally removed; and also the obvious cost savings in reducing the time required for bookkeeping.
Another benefit of having your data stored remotely is that you will never have to physically back up your data and should anything happen to the computer or device you are using, you just log in on another machine and all your data is there, stored on the internet and ready to carry on.
No longer will you need to be concerned about loss of accounting information due to fire, flood or theft.
Previously at the end of the year it was necessary to back up your accounting file on USB and physically drop it off to your accountant. And the, at the end of the job either update the file with a journal or upload from the accountant. This approach is time consuming and sometimes creates issues where the updated data file is not restored correctly or a wrong version of the data file being used which leads to time spent correcting and lost productivity.
With cloud based accounting software this is a thing of the past. You can now invite your accountant to access your cloud based file directly. This access is controlled by you as the owner of the file and can be turned off at any time. The advantage of this is that issues with your accounting system can be fixed by the accountant live without having to cease processing or send the file to the accountant. Your accountant just logs into your file, makes any necessary adjustments and at the end of the year updates your accounts remotely.
Our approach to help you
- Review your current accounting system and determine current and future needs.
- Determine the cloud solution that best fits your situation. (Features vs Cost).
- Manage the migration of data from your current system to the cloud.
- Provide training in the features and use of your chosen cloud solution.
- Work with you to leverage the power of your new cloud solution to provide real value and improve the performance of your business.
Scott Mitchell CPA