Cloud computing is changing our lives for good! Be it education, integration in healthcare, or eCommerce businesses; cloud computing is significantly impacting numerous fields.
With its ability to access software programs in real-time, cloud computing has now entered the accounting and bookkeeping field as well. Cloud based bookkeeping makes the accounting process more straightforward and more efficient.
The hard reality of starting a business
You will have often heard the statistics that 8 out of 10 businesses will fail within 5 years and you may not believe it or maybe you don’t think that is true in Singapore. We were also curious and examine some statistics about the formation and cessation of business entities from ACRA between 2014 to 2018.
On average from 2014 to 2018, the proportion of business that has ceased trading compared to a business that was incorporated is 75% which is quite close to the often quoted 8 out of 10 business will fail statistics.
Why do most small businesses fail then? According to Travis Thorpe, CEO and Co-founder of Boostability, the top 5 reasons is:
- Failure to market online
- Failing to listen to their customers
- Failing to leverage future growth
- Failing to adapt (and grow) when the market changes
- Failing to track and measure your marketing efforts
Most of the reasons listed do not look complicated or are so highly technical that a business owner like you can not do it, but in reality, where do you normally spend your time?
We are all guilty of this at times, you spend so much time on trying to manage the business tasks and too little time on the important things such as marketing the business. This is why outsourcing your bookkeeping and using cloud based bookkeeping software can help you focus on the priority matters. If you have not yet incorporated cloud based bookkeeping in your business, this article is for you.
Here is how cloud based bookkeeping can transform your business in the right way.
1) Reduce Time Communicating Through Efficient Collaborations
Be it your finance team keeping track of invoices, or your order and logistics team encountering record discrepancies; cloud bookkeeping enables anyone from your team to address accounting and records clarification. It makes your team more efficient and collaborations with your accountant easier and faster.
Further, with cloud accounting, anything you upload can be viewed by your colleagues in real-time from any corner of the world. You can even write comments that can be seen by everyone.
2) Improved Real Time Information
Instead of waiting till month-end to know if you managed to achieve your budget revenue and costs, would it be better to have weekly or even daily insights? Most cloud-based accounting systems allows you to send invoices directly to your customers which can then be tracked for payments. How many times have you wondered which of your clients have not paid their outstanding bills? Now with cloud bookkeeping software, you can send access the information in a glance and send statements of what is outstanding at a click.
Having all these real-time information allows you to make better decisions. For example, should you implement that month-end sale to generate more revenue? Wouldn’t knowing how far are you from your targeted revenue be relevant to you making that decision?
3) Access Anywhere Anytime From Any Device
Be switching to cloud based bookkeeping; you can access your data anytime, anywhere from any device. For instance, you have to upload a receipt or check a report while on holiday. With cloud based bookkeeping services, you can easily access the app by logging in and finish the work.
Since cloud based bookkeeping and computing system need not be installed onto your system, you just have to log in with any of your devices to view your accounts. Further, you can quickly check your finances using your laptop, tablet, or even phone. For instance, if you are on your way for a meeting with a client, you can pull up their account to check their status. Going well-prepared to your clients can convert your leads into sales, thus making significant profits.
Keep on top of your business even while you are away. A survey by Walls Fargo bank notes that 39% of business owners still do work related activities during their vacations. A cloud bookkeeping software will allow you to cut down the time spend on work activities and enjoy yourself more.
4) Enhanced Security
Data security is crucial for business owners. Financial records must be accurate and kept safe for tax purposes. It is mandatory to keep all financial records for at least 5 years in Singapore.
In the traditional accounting system, your data is safe as long as your hard drives do not get corrupted. But what if your hard disk crashes or gets damaged. Saving your data on physical drives is full of risks, such as destruction, corruption, and theft.
This is where cloud accounting enters. Cloud based bookkeeping services take multiple backups of the data to make sure it is safe and ready to be recovered if needed. Besides, in cloud accounting, essential security updates to prevent viruses and hacks happen automatically. If you opt for cloud based bookkeeping services, data security would be the key responsibility of your service provider.
5) Increased Scalability and Flexibility
A simple spreadsheet-style accounting system might serve the needs of startups. But as businesses start to grow, managing the finances becomes more complicated. With an increase in tax issues and cost-base becoming more substantial, it is essential to upgrade your accounting system as well.
To avoid this hassle, businesses are now using a cloud-based accounting system because of its scalability. It means that as your company grows, the accounting system will grow with you.
With a scalable system, you can add a new company, consolidate multiple business entities into a single report and calculate various currency rates. Be it additional support, extra storage, or new features; you can have access to these immediately when you need them.
Most cloud based accounting systems also have integrations with other cloud software such as inventory systems or Point of Sales (POS) software that expands the functionality to meet the different needs of different business owners. This allows you to continue using the same cloud software instead of having to make a change even when your needs evolve.
Along with these advantages, switching to a cloud based bookkeeping system can also reduce the cost of bookkeeping and accounting. You don’t have to purchase an expensive computer to install bookkeeping software or a server so everyone can access the same data.
All you need is an internet connection. Employees can access these services from their own devices.
Now, as you can see, there is a myriad of benefits of leveraging this cloud technology in the bookkeeping profession. So, whether you’re just starting out or in the business for some time now, it’s the right time to integrate cloud bookkeeping into your business.