Consider what business involved just a decade or two ago. Those readers who have been in business long enough will remember when pen, paper, calculator and a lot of time was all you had to balance the books. And those of us who were in sales or the order takers, will even remember the trusty pads with the carbon paper insert to enable duplicates of documents.
Then came accountancy software - simple at first. These digital tools took the strain away, performing tricky calculations for you, giving business owners and accountants time to work on more pressing tasks, other than simply number-crunching.
Over time, these tools developed further and further, with more innovative additions and upgrades. And, as seems inevitable for all pieces of software, they eventually made their way online - accessible from anywhere, by multiple people at once, compatible with multiple devices and systems.
This is cloud-based systems.
Rather than having programs installed and data stored on local computers, phones or tablets, cloud-based accounting software keeps everything online - in the cloud.
Picture this: You are collaborating on a project with a team in the South Island while sitting in your PJs, or providing a service to a client in Australia while enjoying some rays at the beach. Just a pipe dream not that long ago. Nowadays, all thanks to the power of the internet and the innovation of the cloud, it is more common than ever.
Cloud-based systems have changed the way we interact within our organisations: with our staff, our suppliers and our customers. These systems are becoming more mainstream, more effective and more efficient to use.
This shift to purely online operations for accounting has proven exceptionally popular the world over. Xero, the market leader in cloud accounting software outside of the United States, has over 700,000 subscriptions to its software in Australia and New Zealand alone. And that number is growing.
There are three key reasons for the popularity of Cloud-Based Systems:
Both the data and the software itself are based online, accessible from anywhere in the world with an internet connection.
This means that business owners, their staff, and their external accountants can get any information they need from wherever they are in the world. Yes, business owners can now finally take a holiday and still have complete eyes on their financial data. In the unlikely event that digesting all your financial data seems too onerous (spoken like a true accountant), dashboards can be developed to deliver just the information you need, not all the noise that clutters it. Think of it like your own personal news feed about your business, everything you want to know, and nothing you don’t.
This also makes accounts preparation less cumbersome for your external accountant. When you don’t need to physically access the financial system to balance the books, that time and efficiency can be used to create more value for the organisation.
Often traditional processes in business, even with the benefit of digital software, still requires a user to physically input the data required. This could take a significant amount of time, not to mention the potential for user error.
Cloud-based systems do away with this danger by connecting directly with your everyday financial management systems and bank accounts. Data is updated automatically with your banks, and often your suppliers, providing financial data that is both accurate and up-to-date.
Less time spent manually inputting data equates to faster, more accurate reports. That alone should be enough to convince most business owners, but there’s also the fact that this automation allows you and your accountant to leverage financial data more than ever before, and in new ways.
When you aren’t spending all your time counting beans to meet minimum financial reporting standards, you have more time to focus on strategy and doing what really matters - growing and upgrading your business.
Businesses can often grow rapidly. It’s not uncommon to see premises, workforce and the customer base expand significantly in just a couple of years. This inevitably requires additional resources in systems software as well.
Take traditional accounting software for example. This would require more software licenses, new databases, more staff and potentially new hardware as well.
Conversely, cloud-based accounting software lets you avoid such costs. Expand as you like, it will expand with you far more readily than computer-bound traditional software could.
In addition, cloud-based systems provide a level of security often far superior to inhouse systems. Basic advantages include better password and access right protection. When was the last time you changed your passwords? Once an ex-employee left the building? To protect yourselves from theft and physical damage? After disaster recovery? All items that should be considered when weighing up the move to the cloud.
Business owners, accountancy firms and even the Inland Revenue Department are dumping the traditional methods and shifting over to the cloud. There are a huge number of benefits to moving to the cloud and we have only just started scraping the surface. Cloud-based systems should enable the best experience possible - faster, more reliable, more accurate, and more focused on business strategy and opportunities instead of just mandatory reporting.
We need foresight, as well as insight, and the ability to spot red flags ahead of time and figure out how to mitigate them before it’s too late. We’re looking forward to a better-informed, more efficient financial future - and we think you should be too.