By Ben Warga
Both accounting professionals and their clients are quickly realizing the advantages of stepping away from their desktops and into the cloud. With services such as Xero and QBO (QuickbooksOnline) accounting for an ever-growing market share, cloud accounting will soon come to dominate the industry. In the coming years, desktop accounting software will be viewed as outdated as printing presses and the mimeograph.
Let’s discuss a few of the reasons for this shift.
Time Savings
There are many ways in which cloud accounting saves time for the small business owner in very direct, obvious ways.
First, with cloud accounting, no software updates are ever needed. Because the software exists on servers outside of the business owner’s place of business, it is updated automatically without the owner or accounting team ever needing to do anything. This means that there is no downtime spent downloading updates, installing them, correcting problems with software updates, etc.
Second, most desktop accounting program providers cease supporting software after it reaches 2-3 years. This means that every couple of years, the business owner is forced to devote time to finding new software, purchasing it, and installing it, while also converting old files over to the new version. With cloud accounting, all these tasks are performed automatically, usually without the business owner ever realizing they have been done (unless there is a major graphics overhaul, which rarely happens.)
Some business owners might pay their bookkeeper to take care of updating their desktop accounting program, in which case the use of cloud accounting translates into a dollar savings rather than a time savings. The owner is not paying their bookkeeper for time spent on the low value task of software installation. Instead, the bookkeeper can focus on high value tasks like reporting and analysis.
App Integration
Is there some additional task you want your bookkeeping software to perform that it doesn’t? There’s probably an app for that, and most apps do not integrate with desktop programs.
For instance, are you looking for better expense accounting? Apps like Expensify track transactions, creating expense reports automatically and emailing them to owners for approval.
Hubdoc (a personal favorite of mine) eliminates the time you spend categorizing and filing receipts. Instead, users scan receipts into a central “hub” which creates its own folders and subfolders for vendors, clients, and bank statements. When you want to find an old invoice or bill, you simply find the vendor’s folder and look through it for the date. Hubdoc also scans your Xero or QBO account for transactions which match receipts and attaches the receipt to that transaction. There’s even an app for your phone so you can take a photo of a receipt as soon as you make a purchase. You’ll never need to wonder “What type of expense is this?” again because your bookkeeper will be able to view the receipt, compare it to the transaction, and assign it to the correct category.
Tsheets is an app that integrates with cloud accounting for time tracking. Employees can log in from anywhere and their hours are recorded. Tsheets also breaks down employee time by task, showing employers how much time is spent on individual projects, which provides more accurate job costing for the employer. When you know how much time each employee has spent on a project, you can get a better idea of how the budget for the job compares to performance.
Another interesting app is Expensify. This integrates with cloud programs and tracks travel and expenses. Users are able to manage transactions, create receipts, upload receipts for purchases, and generate expense reports. Through Expensify, business owners can approve transactions and view reports. Much like Tsheets, Expensify creates increased knowledge of the costs associated with each job.
Access to Information Anytime, Anywhere
With desktop accounting software, you’re forced to access your accounting program either at the office or remotely, and remote access relies on a host of factors. Cloud accounting can be accessed from anywhere in the world as long as you have an internet connection. This means you can create invoices on the fly when you’re in the field, check up on reports when you’re at a conference, or access financial statements on vacation (although I sincerely hope you’re not checking financial statements on vacation.) Bookkeeping in the cloud provides business owners with the tools to know how their business is performing financially anytime, anywhere.
These are only a few of the many reasons cloud accounting is the wave of the future. If your bookkeeper or accountant is still tied to their old desktop accounting program, I suggest you tell them to jump on the bandwagon today. You’ll be glad you did.