The fact that you are reading this means you have thought about it. But would you have been interested in a “cloud based” accounting and bookkeeping application a few years ago? Probably not! Like myself and many small business owners, you were probably still trying to get your arms around the cloud and doubting that you would ever entrust your most critical financial data to some outside company. But times have changed. Online, or cloud financial applications are slowly but surely becoming the norm, and many small business owners are taking notice, particularly because of their benefits.
There are many cloud accounting and bookkeeping applications available on the market to date for small businesses. Some of them are: QuickBooks Online, Cheqbook, Xero, FreshBooks, Kashoo, Zoho Books and Wave. Most of these programs are pretty simple to use, and with only the bare basics of accounting, anyone should be able to use them. These programs also make it easier to have someone else do your bookkeeping while you maintain your Invoicing and receivables simultaneously from anywhere there is an internet connection. They can be accessed on a smartphone, tablet, or computer. This means that you have options! You can outsource your entire bookkeeping and accounting processes, or elect to have specific portions outsourced.
Benefits of Cloud Accounting
1. Cloud Based Accounting is Safe and Secure
When it comes to your company’s finances, nothing is more important than keeping your sensitive information from leaking out, which could have disastrous effects on you and your business. With a cloud based virtual accounting solution, your data is stored on a secure server. When you need to send data back and forth, it is done using only the highest available level of encryption, which keeps the data from being read – even in the unlikely event that someone could intercept the transmission.
2. Cloud Accounting is “Always On”
O the convenience of easy access! One of the reasons that cloud based accounting is becoming so popular is that it provides a level of coverage that you could only get otherwise by hiring an entire accounting department. Most small businesses cannot afford the expense of hiring even one full time staff member, and will generally bring someone in to do the books on a part time basis as needed. That may only be once per month to a few days a month, which leaves a lot of gaps if there are critical needs on the off days. With these applications you have the option of using a virtual bookkeeper and even accountant, which will undoubtedly cost less while keeping your accounts updated. Even at nights while you sleep, your accounts can be updated. You can choose to have a team assigned to you by some of these companies for full coverage, if you prefer to have the same company personnel rather than other remote bookkeepers do your bookkeeping. Regardless of how you choose to handle your bookkeeping, using any of these cloud accounting applications will allow you and whomever you give permission, to have access to your data 24/7 from anywhere with an internet connection.
3. Cloud Based Accounting Applications are Versatile
Cloud based accounting applications have something that only the cloud can provide. Because these applications are located online, they are better able to be integrated with many other applications that are designed to work with them, offering customized solutions to various business needs. Ecommerce and payment processing solutions such as Shopify, Paypal, Square etc. work seamlessly with these programs. QuickBooks Online has the widest market of these software applications, and as such, there are many more applications available that can be easily assimilated with it.
4. Cloud Based Accounting Allows for Seamless Collaboration
Since these applications are cloud based and hosted, they allow for easy and seamless collaboration. You and your business partner, for example, may be in different locations but need to look at and discuss your numbers. These online programs make this possible!
Downside to Cloud Accounting
1. These applications often become overloaded and thus slow running, depending on the time of day. During regular business hours of 9 through 5 when most businesses are open and staff working in QuickBooks, there may be times when it becomes really slow.
2. Cloud based accounting applications are sometimes inaccessible. There may be times when you have work to do but the application is inaccessible or unavailable for any number of reasons.
3. You Cannot Backup Your “In the Cloud” Data. Because these applications are not on your system, you cannot backup your data, and will need to wholeheartedly trust these companies to have your data available whenever you need to access it.
Technology has advanced in a myriad of ways, and people who are not excited about the new way of doing things are forced to either move with the time, or be left behind. Many accounting software companies who started out with desktop accounting software are moving rapidly towards closing them out altogether. Although you may have purchased the desktop edition and it is yours to keep, you may not be able to use it the same way you usually do. For example, if you use your QuickBooks desktop software to generate payroll and depend on the updates from Intuit to get them done accurately, you will not be getting those updates anymore. If you are only using it for financial record-keeping, invoicing, etc. then you should be ok with it. Otherwise, you will need to switch to the cloud. Eventually that is the only option we will have! So, it is probably a great idea to get on board and transition sooner than later.
My Personal Preference
Desktop hosted applications. Call me old-fashioned, but I like to feel that I have control over my financial data. But what good is having the desktop software when they are no longer supported by their makers who strip away the minimal functionalities they have, such as the ability to email your Invoices through the software for quick payments, and generate your employees payroll?