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FOOD FOR THOUGHT

What is cloud-based accounting and why should you care?

Posted by Matt Smith on April 05, 2018

Picture this: You are collaborating on a project with a team in the South Island while sitting in your pyjamas at your bach, or providing a service to a client in Australia while on a business trip in America—a few decades ago, just a pipe dream.

 

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Nowadays, more common than ever, all thanks to the power of the internet and the innovation of the cloud.

 

What is cloud accounting?

 

Consider what accounting involved just a decade or two ago. Those readers who have been in business for long enough will remember when pen, paper, calculator and a lot of time was all you had to balance the books.

 

Then came accountancy software—simple at first. These digital tools took the strain away, performing tricky calculations for you, giving business owners and accountants time to work on more pressing tasks, rather than number-crunching.

 

As seems inevitable for all pieces of software, they eventually made their way online: accessible from anywhere, by multiple people at once, compatible with multiple devices and systems.

 

Over time, these tools developed further and further, with more innovative additions and upgrades. And, as seems inevitable for all pieces of software, they eventually made their way online: accessible from anywhere, by multiple people at once, compatible with multiple devices and systems.

 

This is cloud accounting.

 

Rather than having programs installed and data stored on computers, phones or tablets, cloud-based accounting software keeps everything online—in the cloud.

 

What are the benefits of cloud-based accounting software?

 

This shift to purely online operations for accounting has proven exceptionally popular the world over. Xero, the market leader in cloud accounting software outside of the United States, has over 700,000 subscriptions to its software in Australia and New Zealand alone.

And that number is growing.

 

It’s easy to see why. There are three key reasons:

 


 

1) Accessibility

 

Both the data and the software itself are based online, accessible from anywhere with an internet connection.

 

This means that business owners and their accountants can get any information they need from wherever they are in the world. Yes, small business owners can now finally take a holiday and still have complete eyes on their financial data.

 

This also makes accounts preparation less cumbersome. When you don’t need to physically access the financials to balance the books, newly found efficiencies can be used to create more value for clients.

 

Find out more about your business financial stability by asking yourself these 10 questions.

 


 

2) Automation

 

Traditional accounting, even with the benefit of digital software, would still require a user to physically input the data required. This could take significant amounts of time, not to mention the potential for user error.

 

Cloud accounting does away with this danger by connecting directly with your everyday financial management systems and bank accounts. Data is updated automatically, providing financial reports that are both accurate and up-to-date.

 

Data is updated automatically, providing financial reports that are both accurate and up-to-date.

 

Less time spent manually inputting data equates to faster, more accurate reports. That alone should be enough to convince most business owners. In addition, there’s also the fact that this automation allows you and your accountant to leverage financial data more than ever before, and in new ways.

 

When you aren’t spending all your time counting beans to meet minimum financial reporting standards, you have more time to focus on strategy and doing what really matters: growing and upgrading your business.

 


 

3) Flexibility

 

Small businesses can often grow rapidly—it’s not uncommon to see premises, workforce and client base expand significantly in just a couple of years. This inevitably requires additional resources in accounting software as well.

 

For traditional accounting software, this would require more software licenses, new databases, more staff and potentially new hardware as well.

 

Cloud-based accounting software lets you avoid such costs. Expand as you like; it will expand with you far more readily than computer-bound traditional software could.

 


 

Our position

 

This is why we think that cloud-based accounting is the future of the industry—and we’re certainly not the only ones. Business owners, accountancy firms and even the Inland Revenue Department are dumping the traditional methods and shifting over to the cloud.

 

Matt Smith from Bellingham Wallace has this to say:  

 

“We decided to fully commit to the cloud to help service our clients needs and opportunities and ultimately work even more effectively. There are a huge number of benefits to moving to the cloud, and we have only just started scraping the surface.”

 

"We decided to fully commit to the cloud to help service our clients needs and opportunities and ultimately work even more effectively."

 

That’s why we’ve partnered with Xero to provide cloud-based solutions for our clients. We want to give you the best accounting experience possible—faster, more reliable, more accurate, and more focused on business strategy and opportunities instead of just mandatory reporting. Foresight, as well as insight; will allow us to spot red flags ahead of time and figure out how to mitigate them before it’s too late.

 

Summary

 

Cloud-based accounting software: it’s the online version of your favourite accounting program, made more accessible, more accurate and more efficient than its traditional forebears. It lets you focus less on number-crunching and more on number analysis, giving you the time to develop and grow your business.

 

Bellingham Wallace believes that it’s the future of the industry, and we’re working with one of the leading cloud accounting providers in the world to provide this service to our clients.

We’re looking forward to a better-informed, more efficient financial future—and we think you should be too.

 

Xero is Bellingham Wallace’s preferred accounting software solution and as of 1 April 2018 we will be using Xero to process our clients year end financial statements. If you have any questions or would like to explore your options further, please get in touch with Matt Smith or Toby Bennett by replying to Xero@bellinghamwallace.co.nz

Topics: Financial Reporting