Every successful business has its finger on the pulse of its financial information. Business owners need to know their key numbers, revenue, closed deals, cost of goods sold & not the numbers in last year’s tax return & financial statements. Last year’s information is out of date. Businesses need today’s numbers…Today!
A cloud accounting system can provide real-time financial information for your growing business. If you don’t have a cloud accounting system this blog will explain the benefits. We will review how to get started with cloud accounting in part 2. There are essentially just 4 types of accounting systems:
Type 1: The Manual System
A manual system is cheap; you only have to buy a book. A book of ‘green bar’ paper (or columnar paper) can be purchased at a local office superstore for about $10. What the manual system doesn’t consider, is the cost of your time? Manual systems simply take too long organize & maintain. As a business owner, your time is too valuable. It also takes your accountant more time to produce financial information (statements/tax returns) so you end up with bigger accounting bills. Manual systems also do not provide that all-important management information for making better business decisions.
Type 2: The Spreadsheet
Excel and other spreadsheet-based systems are also cheap. While some spreadsheet processes can be automated (e.g. adding up columns), they take time to set up and you can waste hours changing the spreadsheet as your business grows and evolves. If management reports for decision making are desired, you need advanced Excel skills to produce reports. The inexpensive cost of the spreadsheet system, also does not consider the cost of your time? What is your time worth?
Type 3: The Desktop system
Then there is the old-fashioned desktop system. While this system is far better than manual and spreadsheet-based accounting systems they come with a myriad of hidden costs. The initial software purchase can be relatively cheap, but the hidden costs of customization & implementation increase the cost of this option. A desktop system also requires you to maintain your hardware to meet the functional demands of the software; dealing with (often costly and compulsory) software upgrades, security, scheduling back up routines and restoring data when things go wrong can make this option cost prohibitive.
Type 4: The Cloud Accounting System
In contrast, a modern cloud accounting system gives you the following benefits:
- It saves you a significant amount of time, something most businesses don’t have enough of,
- Gives you 24/7 access to up-to-date financial information and reports (you can use cloud-based software from any device with an internet connection, iPhone, iPad, etc.),
- Business owners can sleep at night knowing your sensitive financial data is secure and backed-up automatically,
- No system downtime because all software upgrades are automatically installed. Worry-free maintenance saves you time and hassle,
- It reduces your accounting fees because it makes it easier for your accountant to produce end of year financial statements & tax returns, and
- Your accountant can access your data 24/7 & provide support & value throughout the year.
As accountants, we have seen it all…manual & spreadsheet systems with columns that don’t foot (add-up), owners that spend days at a time summarizing the financial information & servers crashing only to find out the scheduled back-ups failed & months of information was lost & had to be re-created. In short, a cloud accounting system will make your life so much easier and give you the critical numbers for your business in real time.
We specialize in cloud accounting, so if your accountant doesn’t offer this service we can help. You don’t even need to be in the same part of the US… we can set it up online for you. With real-time access, your accountant & trusted business advisor located anywhere in the world can help you operate, understand & grow your business rather than just adding up the numbers.