Keeping your accounts up-to-date and accurate is essential for every business, but it can also be quite time consuming. From dealing with stacks of transactions, to rummaging around for old receipts, it can also be rather stressful.
With HMRC (slowly) moving towards Making Tax Digital, an increasing number of businesses are turning to cloud accounting to manage their bookkeeping more efficiently.
Saving ‘to the cloud’ is a computing term which describes the way information is stored in an online location. Rather than printing out paper records or saving documents on a single device, you can upload information to an online server which can then be accessed from any phone, tablet, or computer.
In that sense, cloud accounting simply means that the software you use is hosted on a remote server, rather than on your computer. All of your bookkeeping records and supporting documents are saved to the server, making them accessible to anyone who has permission to sign-in and view them.
You won’t need to download and install anything to make your accounts software work, because it’s all online.
How does cloud accounting work?
Cloud accounting is just like traditional accounting, except information is stored on a highly secure cloud server. For example, our clients have the option of using the Pandle software that we developed to manage their own bookkeeping.
Any information or records they upload are then accessible in real-time, so their accountant can work on them from a separate location (which is something to think about if you’re looking to hire an accountant!).
Free bookkeeping software
Included in all our accountancy packages
What are the benefits of cloud accounting?
Cloud-based accounting has lots of benefits depending on what you and your business need.
Buying software (and some kit to install it on) can be expensive if you need to buy regular updates. Most cloud accounting software providers operate a subscription model, so you’ll pay a monthly fee to access it. Some providers will charge more based on the number of users or volume of transactions.
You’ll also save money on printing or storage costs.
Using cloud-based software usually makes it easier to add or remove additional users or access to features. Rather than going through the process of ordering, downloading, or installing additional software, you’ll often be able to upgrade instantly online.
You can access information remotely
Saving information to a single device or local network normally means you can only access it if you’re using that device, or connected to that network. So, what happens if you need to work from home, or go on a business trip?
Cloud accounting makes your bookkeeping accessible on any device, anywhere that has an internet connection (so don’t forget your login details!).
You can update your accounts just as easily on a train on the way to a meeting as you can at your desk, and check over your finances wherever you are.
It can make it easier to collaborate
The ability to work remotely means you can give other people access to your accounts just as easily, such as your accountant, business partner, or a member of staff.
Your data will be secure
Laptops, memory sticks, and tablets containing your financial records are easily lost, stolen or damaged, servers can malfunction, and paper print outs can be damaged in a fire or flood.
Even backing-up your data still leaves it vulnerable to theft or physical damage – just as the original hardware is. As the saying goes, putting all your eggs in one basket can be risky.
Accounting in the cloud means your data is held on many very secure servers in multiple locations, and your provider is responsible for its safety. Access is controlled by highly encrypted authentication technology, which is automatically updated on the cloud, so you won’t need to download the latest security patch.
Learn more about our online accounting services for businesses. Call 020 3355 4047 to chat to the team, and get an instant online quote.
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About The Author
I've worked in the accountancy sector for more than 15 years, and have extensive experience supporting sole traders, partnerships, and SME's. Learn more about Lisa.