5 Ways to Streamline Your Business with Cloud Accounting Software
In many cases, bookkeeping duties were delayed until the end of the week, the month, or even the year. It was because the business owners were more concerned with serving their clients than spending time in bookkeeping and accounting. What could they possibly blame them for?
However, all that delay became evident as tax time approached. The expenses were classified incorrectly or neglected, and bank accounts were not moderate, so mistakes went undetected while personal expenses were mingled with business expenses.
Tax planning was ineffective since inaccurate financial statements could not generate precise tax estimates. Their accountants logged hours and (expensive) hours resolving mistakes before they could create an income tax return.
Cloud accounting has provided an ever-growing range of software and tools that aid in reducing the stress of managing receipts, invoices, and invoices.
Cloud technology has transformed the accounting world, not just for small-scale business owners but also for their tax and accounting professionals.
Let’s look at five ways cloud Accounting software can simplify your life:
Easily Record Your Business Expenses
Is your purse or glove compartment stuffed with expenses receipts? What percentage of them will make it on the tax returns at the year’s close? If you don’t record the expenses in real-time, it’s easy to forget about them or overlook them when its time complete the tax returns.
Cloud-based accounting software connects to your company bank account or credit card and downloads your transactions automatically as they happen.
Business owners have bank or credit card accounts to justify their expenses. However, when your company is chosen to be subject to the purpose of an IRS audit, the statements don’t support the deductions you make. Auditors want receipts.
Cloud accounting software allows you can snap a photograph of your receipt using your smartphone or other mobile device or save the receipt in an Adobe PDF. The receipts can add to your expenses in only two minutes. There’s no need for shoeboxes filled with damaged receipts and no loss of deductions.
Cloud Accounting Software on Mobile Means You Can Perform on the Go
What inspired you to start your own company? If you’re like many entrepreneurs working for yourself, it is about flexibility and freedom. It could include a working holiday at the beach or travelling without being stuck at an office desk.
With available accounting software for desktops, managing your business efficiently when you’re off is virtually impossible. It’s common not to be able to charge clients, pay bills or view financial reports unless you’re at the office.
Suppose you’re at an event, going on vacation or operating from an off-site place for a few days. In that case, cloud accounting allows you accessibility to financial data regardless of where you are at any time.
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Make Fast and Simple Software Updates
The traditional method of working with accounting software required purchasing an expensive suite of software installed on the computer. If a new version was released every year, small-scale business owners were forced to either budget for it or work using old and usually unsupported – versions of the program.
Alongside the cost of several licenses, the additional users could make upgrades difficult since new versions had to be downloaded on each computer separately.
Cloud accounting has made it much easier to manage the process of upgrading software. It is no longer necessary to be concerned with installing the software, upgrading to the latest versions or backing up information.
The software company handles updates, backups, and security without engaging your IT experts. All this is at a reasonable monthly cost instead of a substantial initial expense.
Build a More Seamless Experience with Add-on Features
You likely use many different applications or software to help you get your finances in the correct order. Are there any applications that are compatible with one another? Integrated applications (or add-ons) could help you save time (and cash) as they can switch data and information from one app to another.
It would help if you considered how you record your business mileage. The old method was keeping a notebook in your glove compartment and taking notes of your mileage and the purpose for which, you drove. Now, apps such as MileIQ or Automatic will automatically track your miles.
It is practical, but it’s more effective when these apps are integrated into your software for accounting. In the absence of integration, you’ll need to remember to log in to the tracker of mileage application each month, record your mileage, log onto your account software and then record the expense of your mileage multiplied by the standard mileage rate of the IRS.
Who has the time to complete this task every month? You’d most likely delay the task until year’s end, as you’re scrambling for the other tax-related documents.
Tracking the mileage is just one example of how integrated apps save time. Solutions are offered for online payments, payroll, time-tracking and scheduling sales tax reporting, planning and management of projects, and much more.
With these add-ons, all the administrative chores which used to take an owner of a small-sized business for several hours can now be accomplished in just a few minutes.
Collaboration with Your Team and Your Clients
Cloud accounting makes sharing data with your tax accountant or professional tax simple. It improves security and collaboration while also reducing the back-and-forth method that is commonly used. Let’s look at a case study.
Imagine you’re a contractor who’s thinking of buying a brand machine. It’s unclear if it’s the best option for your company. Do you decide to lease or purchase? Are the monthly payments causing an issue with your cash flow? What impact will it have on your tax liability?
Suppose you’re using an old version of PC accounting. In that case, you’ll likely contact your accountant to clarify the situation. Your accountant might request your most recent year-end financials. You’ll need to print them out and hand-deliver them or send them via email.
Hopefully, you’ve remembered to password-protect your email to protect yourself. After the accountant has been able to review all your finances, he/they will go over the figures.
They might require additional reports or have concerns about the price of your equipment, as well as the financing or lease options. It will likely take about a day at the most time for the accountant you have hired to analyse the numbers and provide you with the information you require to make an informed decision.
Let’s look at what this scenario could play out with cloud-based accounting software. If you contact the accountant, the accountant can access the application while calling.
The accountant reviews your data and can see your year-to-date net income immediately. They’ll likely have to contact you once they’ve had time to look up some numbers, but it can take hours rather than days.
This kind of collaboration could observe whether you’re thinking of investing in equipment, entering into the terms of a new contract with a customer, buying real estate, or even hiring an employee. You and your accountant have access to current financial data that you can use to make more informed decisions.
You should consider switching to the cloud if you’re currently using spreadsheets or a desktop application to manage your small business’s accounting.
It’s not just about making your financial management more effortless. It will also give you your time back. This way, you’ll be able to concentrate on your primary business objectives and increase the long-term performance of your business.