CLOUD ACCOUNTING: MOVING BEYOND THE TRADITIONAL MODEL

Recently you may have heard the term “Cloud Accounting” being used. You may have also noticed ads popping up for Xero, Saasu and MYOB live.  All of these names and terms have probably got you scratching your head and wondering to yourself what all this hype is about.

In this blog I will shed some light on the cloud accounting concept as well as discuss how accounting practices are evolving due to the availability of cloud based technologies.

In the nutshell, “cloud accounting” is an alternative to using traditional desktop based accounting software. Instead of installing an accounting software package on your computer as was the case in the past, you can now subscribe to a cloud based accounting package and access your data through your web browser. All you need to do is log into the website of the cloud based service provider which you are subscribed to and away you go.  It’s that simple.

Now you are probably thinking, “I still don’t get it! what’s all the fuss about? What are the added benefits of using this cloud based software that I’m not already getting from my existing desktop based package?”

Well in a quick and concise summary here is a snap shot of the benefits:

1. You have the flexibility to access your business data anywhere: You are no longer limited in how you can access your business data. By using a cloud based software all you need is access to the internet. This gives you the flexibility of being able to view your business’s accounting data in virtually any location and on any type of device whether it be a tablet, smart phone or laptop.
2. The data is live: Cloud based accounting packages show your data in real time. This means that if your accountant or any of your employees (e.g. employee responsible for payroll) make any changes to your file, you will be able to see it in real time when you log on. Furthermore, most cloud based packages include a live bank feeds feature which automatically imports all your bank transactions into your file as they happen. This eliminates the burden of tedious data entry and saves your business valuable time.
3. Efficient bookkeeping and cash coding: Following on from the previous point, by using a cloud based package you can view all of your unreconciled bank transactions on one screen and efficiently allocate them to their relevant accounts in seconds. This spares you the need to enter in bank transactions one by one.
4. It might sound like a bit of a cliché but time is scarce. So with this in mind you might want to consider the value created by spending less time doing the bookkeeping and ultimately achieving the same result. So that you can see the brilliance of how cash coding works in practice I have included below a link to a 1 minute video on YouTube which shows how this works in the Xero software: