The Digital Revolution Of Cloud Accounting
Welcome to the future ...
POSTED BY JONATHAN VOWLES ON 05/07/2016 @ 8:00AM
Yup, the 21st Century and computer apps have arrived in accounting and there is a digital revolution going on. Well, to be fair, there has been a constant process of upgrading and development and, over the last five years or so, the movement to online accounting systems ...
Cloud accounting has so many advantages over traditional desktop systems.
copyright: ismagilov / 123rf stock photo
Over the last two years, cloud accounting has really come of age. The systems and processes available are now as good as the desktop systems they are replacing. Well, that is one reason to consider changing to use a cloud accounting system like Xero or QuickBooks Online.
What are some of the others?
Using the old-fashioned systems we were, just like any ordinary accountant, able to tell customers how much VAT they needed to pay each quarter, but we could only ever tell them just before it was due, and were never able to predict accurately how much before then – with cloud accounting you can see your running total!.
Likewise, with Corporation Tax, it was months after year-end that we could calculate how much a customer would need to pay.
While they would obviously have been expecting some sort of bill, it was often a nasty surprise just how much might need to be found in a short space of time. With cloud accounting systems, on any given day of the year, not only can I tell my customers what their tax bills are running at, they can see the numbers themselves.
This should perhaps, be 'lack of' administration because cloud accounting has significantly reduced the amount of paperwork and number crunching that we, and our customers, were previously faced with each day.
It has eradicated duplication (and having to do things twice is often an issue with older systems) and made human error nearly a thing of the past.
Some cloud accounting systems can even help by allowing you to take a photo of your receipts with your phone so it doesn't matter if you lose the receipt.
Being in full control of your numbers, with the visibility and planning power that cloud accounting gives you, opens up many more opportunities for any company.
For each of my customers, we can now see, on a daily basis, their profits, their turnover, their performance against targets, their tax liabilities, and all manner of other critical business information. This means the owners can make definitive, accurate decisions about bonuses, pay rises, and how much they can pay themselves, well before the end of any financial year.
We can help you with this in ways that we simply can't if you aren't using a cloud accounting system.
Current indications are that over the next few years HMRC are going to start insisting that all UK businesses use digital accounting system. They are going to do this by making it necessary to provide current information more quickly than at present and in a digital format.
Going to a cloud accounting system now will help to make sure that you are more prepared and ready - and that we, as your accountants, can also be prepared and ready to help you.
And a whole lot more
In addition to the massive enhancements to the daily, quarterly and annual tasks that we, as accountants, carry out, there are so many more benefits.
Instead of simply being bookkeepers, and box-tickers, the team and I actually get to spend time talking to and understanding our customers better. We have saved as well as made them money by simply being involved and being available.
With loads of add-ons (other cloud-based software systems) that can integrate with your cloud accounting system, we have also been able to help them systemise and automate internal processes, such as invoicing, collecting payments, and reconciliations.
Disaster recovery is made simpler, as is backing up information. Going paperless (alright call it paper-reduced) is also easier with a cloud accounting system.
All great reasons to choose a cloud accounting system!
But which cloud accounting system to choose? Well the two best systems available in the UK today are Xero and QuickBooks Online. There are plenty of other software brands to choose from, but why bother when you can choose one of the two best?
"Cost can make a difference to which one you choose!"
Really, you should make a choice based on the functionality that you need and what the different systems offer you. If you are stuck making a choice then call me on 01234 752 566 or click here to send me an email enquiry and I'll get back to you.
Until next time ...
More about Jonathan Vowles ...
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas, which can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.
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