Head in the clouds? Your accounting should be.

When accounting software was first introduced the actual program was located on your computer hard drive. Consequently, the accounting process was laborious with the need for constant backups of data to be retained on your hard drive.

With advances in internet security, it soon became clear that a much more effective way to provide accounting software solutions was to make it accessible from a server managed by the software provider; with advisors and business owners being able to access their accounting information online.

Among many advantages for the end-user, cloud accounting solutions provide two significant benefits:

• Users can access their accounts data from any device that has internet access.
• Users from different organisations can login to the same application if granted appropriate login permissions and see the same information in real time.

Many cloud accounting solutions also allow you to set up access for multiple users. Staff can use their login protocols to access software from multiple locations making the update of software a real-time experience. More importantly, your professional advisor can login from their office to keep an eye on your profitability and solvency. They can also adjust figures and help you sort out issues without leaving their office; a much more effective and efficient way to keep your accounts information accurate.

Other advantages –

Users can:

• View and review periodic management accounts – keeping an eye on profitability and net worth. These accounts are usually available as a standard feature.
• Manage credit control – issue statements to customers as required and at the click of a mouse.
• Reconcile bank accounts – most cloud solutions link your accounts software to your bank. This enables you to match individual transactions to sales and purchase accounts or allocate payments to a specific cost code.
• Set up budgets for your business – this helps you keep an eye on actual performance compared to expected performance and remedy adverse trends quickly.
• Payroll add-ons – many accounts software applications have payroll packages that can be integrated. They deal with all the requirements of HMRC’s Real Time Reporting obligations and seamlessly add the payroll data to your accounts.
• VAT real-time filing – most cloud systems incorporate real-time filing of your VAT return in accordance with the Making Tax Digital regulations.

Solutions that grow with you

If you are a business owner with growth in mind, the scalability of cloud accounting solutions will be a key benefit to you. Which is why most cloud accounting solutions offer basic and more complex plans to accommodate these differences. As the charges are linked to the features you buy into, you can start with basic, but limited functionality at base cost, and upgrade to more features and benefits as the needs arise. Obviously, the more features you need, the higher the cost.

What is the cost? Considering the benefits, the monthly cost of using cloud accounting software is relatively inexpensive. Basic packages can start from as little as £5 per month for starter licences and scale up to £30 a month for more integrated packages.

Your steps to the cloud

Work out what it is you want to achieve and make sure that the software will provide this. Identify the benefits. Don’t necessarily settle on the cheapest solution. Be clear about the tasks you will have to undertake before transferring existing data. Don’t be hasty. Take your time. If possible, speak with other users of the software to gauge how effective it is. Take advice, we can help you consider your options.

MJB Avanti are platinum partners of Xero. Contact the team to discuss preferential rates and details of their Xero software training sessions.