Why More Businesses are Choosing Cloud Accountants

Why More Businesses are Choosing Cloud Accountants

Due to current economic uncertainty, business owners understandably want a clearer view of their finances throughout the whole year, not just when their annual accounts are prepared.

They want to know what’s coming in, which customers still need to pay their invoices and whether the business can comfortably cover its upcoming costs. Cloud accounting software makes this information much easier to access by bringing invoices, expenses, bank transactions and financial reports into one online system.

However, the software is only part of the solution. A cloud accountant can help you choose the right platform, set it up correctly and understand the information it provides. This combination of accessible technology and practical advice is why more businesses are moving away from paper records, spreadsheets and desktop software.

What is Cloud Accounting?

Cloud accounting uses online software to manage a business’s financial records. Instead of installing a program on one office computer, users can access the system securely from anywhere at any time. Depending on the platform, you can:

• Create and send invoices
• Upload receipts
• Record expenses
• Reconcile bank transactions
• Review financial reports

Being able to access information from a desktop or mobile makes cloud accounting particularly useful for business owners who work from home, visit customers or manage more than one site.

At Finanche, we work with a variety of platforms, including Xero, QuickBooks, FreeAgent, Sage and Zoho. We don’t believe there is a one-size-fits-all solution and the best system is the one that suits the way your business operates. We will be happy to assess your business needs, help you compare your options and recommend the best software. 

The Benefits of Real-Time Financial Updates

Traditional bookkeeping often results in business owners making decisions based on figures that are already out of date. Whereas cloud accounting brings key financial information together in real time. Bank feeds can import transactions automatically, while invoices and expenses can be added as they arise. This gives you a clearer view of:

• Current income and spending
• Money in the bank
• Unpaid customer invoices
• Upcoming supplier invoices
• Tax liabilities
• Short-term cash flow

Having recent figures can make everyday decisions easier. Before hiring a new employee or buying a piece of equipment or making a big investment, you can review the current financial position rather than relying on an old spreadsheet or year-end report. 

The information still needs to be accurate, but cloud accounting makes it much easier to keep records current and review them whenever they’re needed.

How Cloud Accounting Saves Time

Financial admin can take up more time than business owners first anticipate, especially as a business grows over time. Cloud software can simplify many routine tasks.

Connected bank feeds can reduce manual data entry. Receipt-capture tools allow users to photograph and upload receipts before they get lost. Recurring invoices can be scheduled, while automatic reminders can prompt customers when a payment is overdue. Some systems can also connect with payroll software, online stores and stock management tools. This reduces the need to copy information from separate platforms.

Automation still needs supervision. Suggested matches should be checked, and unusual transactions might need professional review. However, reducing repetitive administration can give owners more time to focus on customers, staff and business development.

Easier Collaboration With Your Accountant

Cloud accounting software enables the business owner, bookkeeper and accountant to work from the same information. With spreadsheets or desktop software, records are often emailed backwards and forwards. This can create several versions of the same file and make it difficult to know which one is correct.

A cloud system removes any confusion. Everyone with access can review the information they need immediately rather than waiting for a spreadsheet or backup file. This also makes it easier to spot issues early. Missing receipts, incorrect entries and unreconciled transactions can be addressed before they affect a VAT return or year-end accounts.

When comparing cloud accountants in Reading, it’s worth asking what support is provided after the software has been installed. A useful service should include help with the system, helping you streamline operations and get the most for your money. 

Better Cash Flow Visibility

Cash flow is often more important to day-to-day operations than profit. A business might look profitable but still struggle to pay suppliers, wages or tax if customers haven’t paid on time. 

Cloud accounting helps keep on top of how money is moving through your business by showing income, expenses, unpaid invoices and bank transactions in one place. This can help you answer important questions such as:

• Which customers owe us money?
• What bills are due soon?
• Are monthly costs increasing?
• Have we set aside enough for tax?
• Can we afford a planned investment?

Some platforms also include cash flow forecasting tools. These can show how your bank balance might change over the coming weeks or months. While a forecast isn’t a guarantee and its accuracy will depend on the data entered into the platform, it can highlight potential problems early and give the business more time to respond.

Security and Making Tax Digital

Security is an understandable concern whenever financial information is stored online. However, established cloud accounting platforms have strict security requirements, using tools such as encryption, secure servers, automatic backups and multi-factor authentication. They also allow businesses to control which areas of the system each user can access.

Cloud accounting can also support Making Tax Digital. Most VAT-registered businesses are already required to keep digital records and submit VAT returns using compatible software. Making Tax Digital for Income Tax is also being rolled out in phases for qualifying sole traders and landlords based on gross income thresholds.

Businesses should ensure they’re using software that’s suitable for the relevant HMRC rules. We also encourage our clients to prepare early. Moving to a new system before a deadline gives you time to choose the right platform, transfer all of your information and become familiar with the process without unnecessary pressure.

Choosing the Right Cloud Accounting Platform

The most well-known accounting platform isn’t necessarily the best choice for every business. A sole trader might only need simple invoicing, expense tracking and bank reconciliation. Whereas a larger company might require payroll integration, stock management, project reporting or access for several employees. Before recommending software, we consider:

• Business size and structure
• VAT registration
• Number of users
• Reporting requirements
• Payroll, stock or project management needs
• Existing payment and ecommerce systems
• Future growth plans

Ease of use is also very important. A platform might have lots of advanced features, but they offer little value if users find the system confusing. We always recommend considering cost alongside functionality too. Choosing the cheapest option can lead to manual workarounds if important features are missing. Equally, a small business shouldn’t pay for a complicated system it doesn’t need.

When reviewing accountant firms in Reading, businesses should ask whether they support more than one platform. An accountant should recommend software based on the client’s needs, rather than insisting on one system for everyone.

Moving to Cloud Accounting

Businesses sometimes delay changing the way they manage their finances because they’re concerned about what the process involves. A planned migration can simplify adoption across the organisation. At Finanche, we can help with:

• Reviewing your existing records
• Choosing a suitable platform
• Setting up the software
• Importing historical information where needed
• Training users 
• Providing ongoing support

The timing of the migration can be important. Some businesses prefer to move at the beginning of a VAT period or financial year, while others need to switch sooner because their current system is no longer suitable. The aim should be to implement a new system that fits the way the business already works, rather than adding unnecessary complexity.

Why a Trusted Accountant is Still Important

Cloud software can automate tasks and produce reports, but it can’t replace professional judgement. For instance, it might be able to show that costs have risen, but not explain why. 

At Finanche, we don’t just assist with cloud accounting software; we also offer a range of accounting services to simplify financial management. We can help keep your records up-to-date, but also assist with tax planning, simplify compliance, handle payroll, provide International support, and most importantly, help you understand your figures and use them to make strategic decisions for your business. 

With an experienced accountant on hand, cloud accounting becomes more than just a digital filing system. The software provides faster access to financial information, while the accountant helps turn that information into useful action.

Speak to Finanche About Cloud Accounting

More businesses are choosing cloud accountants, and it’s easy to see why. A well-managed cloud system can provide clearer financial information, minimise routine admin, and ensure you have the figures you need to run a successful business.

At Finanche, we help businesses choose, set up and manage software that reflects the way they work. We have hands-on experience with a range of platforms, and we don’t force every client to use the same. If you need additional support and guidance, we can also provide additional financial services, so you can keep everything under one roof. 

Whether you’re replacing spreadsheets, moving away from desktop software or looking for better financial reporting, we can guide you through the process. Get in touch with us today to find out how working with our experienced cloud accountants in Reading could give you more control over your business finances.