Cloud Accounting: The essentials you need to know

Everyone's heard of the cloud, but do they truly understand what it means? Platforms like Xero are talked about a lot these days, and in fact one third of New Zealand's small businesses are using Xero.  However, there are still a significant number of businesses that would benefit from moving to the cloud

What is the cloud?

Being on the cloud simply means that you're using the internet to access storage or certain types of software, instead of having it physically present on each computer. Many businesses will already be using the cloud for certain functions, for example storing emails or using Google Drive to access shared documents. 

Cloud accounting takes all your accounting functions online. Anyone can access the accounts from anywhere, and updates or new information can be processed automatically. 

What are the advantages of cloud accounting?

Having your accounts online hold several advantages:

1) Accessibility

Cloud accounting takes away the need for individual accountants to manually update ledgers and keep the books. Instead, information is sent to the cloud automatically, and you can integrate the technology with your other systems.

For example, a Point of Sale system that's integrated with your cloud accounting software means that as soon as a customer makes a purchase, the information about what they've bought and how much it costs will go straight to your accounts, and your revenue will be updated. 

Anyone you give access to can view the information, so you don't have to remember to send your books to your accountants. 

2) Accuracy

Mistakes happen when people are manually entering numbers. Cloud accounting is automated, allowing for a much higher degree of accuracy. 

Cloud accounting also gives users a much more accurate view of their business' current financial situation, because it's being constantly updated in real-time, unlike traditional accounting, which often only gets looked at during end of financial year. 

This means you can forecast and predict future trends much more easily, as you've got access to current information rather than data that might only be accurate a year ago. 

3) Value

Cloud accounting takes care of the more menial financial tasks, meaning your accountant can focus on what really matters - adding value to your business. They can look at the forecasts and other real-time information, and find out where opportunities lie for your organisation.

BDODrive helps businesses to assess where they're at today in order to find new opportunities or better ways of doing things. Whether it's by moving to the cloud, sorting out an exit plan or entering a new market, we can find ways to help you grow. For more information, reach out today