What is Cloud Accounting
Up until now accounting software was hosted on-site on a desktop or network (e.g., SAP Oracle). Cloud accounting, on the other hand, places the software on suppliers hosted data centres and is accessed onlne, in the cloud. This gives a number of benefits, but the major concern of businesses is security of the data. The software providers recognise this concern and have security policies outlining how it protects sensitive data. They use state-of-the-art measures such as multi-factor authentication and encryption, ensuring sensitive data will remain secure. Cloud accounting is the future and has significant advantages over desktop
Benefits of Cloud Accounting
Lower costs. no maintenance costs, upgrades, system administrators and considerably lower cost per seat for the software licence
Access anywhere. Phone, laptop, tablet, as long as you have a connection you can access the accounts.
Real-time info making transactions on the move means the accounting info is always up to date and decisions can be based on quality data .
Automation. the latest software automates many bookkeeping tasks saving time and increasing efficiency
Scale. hardware architecture can be a real constraint for in house accounting but the suppliers data centres and take that problem away.
Updates. the cloud accounting marketplace is fiercely competitive and the suppliers are constantly adding new functionality, all these updates happen without interrupting your business
Integration. The huge app marketplace has been designed to integrate to the latest cloud accounting solutions. This provides tremendous process improvement opportunities for ambitious SMEs .
Quickbooks or Xero?
Xero and Quickbooks are the UKs leading Cloud Accounting solutions
Cloud Accounting Evaluation Criteria
All cloud accounting packages provide basics such as ledgers and bank reconciliation's but choosing the right software can still be daunting. If for example, payroll, customer portals, stock management, and multi language are needed, it may complicate the choice. The expanding apps market can now easily provide this type of niche function. For example Xero and Quickbooks have 100's of partner apps that enable integration of CRM systems, staff expense management, estimates etc etc. To choose the right set up for our customers we look at the functional requirements and the more generic aspects listed below .
Pricing - there has never been a more competitive market for accounting software. Many vendors are offering free trials and subscriptions as low as £5 per month per user. As cloud based systems they have the benefit of no local IT costs involving back up and upgrades. But you are of course at the mercy of the internet connection. If keeping control is important to you then desktop software is still available but will involve longer term contracts.
Integration - access to 100's of complementary apps is one of the key benefits of cloud accounting. App developers have been busy integrating their products to the key accounting systems. This means that business owners have a massive choice and very rapid implementation timescales. This in turn means quicker benefit realisation. This should not mean however that all of the sales hype is true or relevant to your situation. There is no substitute for proper testing.
Platforms - some products from the most recent entrants were initially developed for use on smartphones and tablets and only then made to work on desktops and laptops. This is different to those legacy suppliers who will have pre-existing desktop code to exploit and will be retrofitting it to work on mobiles. Depending on your hardware strategy this may be a consideration.
Look and feel - mobile accounting apps can look great especially for the busy manager who wants snapshots of the financial situation. There is will still be a need however to input invoices, journals etc so a consider a thorough evaluation of how easy it is to enter transaction for your business.
Upgrade paths - you will need additional users, more volume and additional functionality as your business grows. Before committing to any new system consider the costs and implications of upgrades