4 Reasons to Switch to Cloud-based Accounting
If you’ve been considering making the move to a cloud-based accounting system, you’re not alone. Cloud technology has impacted many business functions, including making managing financial aspects of your business easier and more efficient.
Cloud-based accounting moves your accounting from being hosted on your computer’s hard-drive to an online platform. Cloud-based platforms like Xero offer important features that save you time and money, freeing you up to focus on other important business activities.
Here are 4 reasons to switch to a cloud-based accounting system (we recommend Xero!)
1. Efficient invoicing
If your business relies heavily on invoicing, an online accounting system like Xero makes invoicing incredibly efficient. You can email invoices to clients directly through your software and track how long it’s been since the invoice went out.
Clients can pay you through a link attached to the invoice, making the payment process easier for them, which increases the likelihood they’ll pay you sooner. If they pay through the system, your platform will mark the invoice as paid automatically. If their payment is late, the system alerts you.
Further, you can set up your software to send automatic reminders about late payments.
2. Paperless accounting
Managing your accounting through a cloud-based system enables you to move away from paper based accounting. You don’t have to go through boxes of files to find a receipt from two years ago, you can simply access the information through your computer.
It’s easy for you to share your records with your accountant, bookkeeper or anyone else who may need to collaborate on your accounting. You don’t have to mail them physical copies of your financial transactions and statements, you can email them the information or give them access to your software.
We recommend using Hubdoc which is a piece of software that essentially acts as an online filing cabinet, allowing you to share documents with your accountant/bookkeeper (integrates directly into Xero too!). Snap a photo of your receipts (keep the originals on hand) and upload to Hubdoc…easy as that! No more hard-copy files to drop off at your accountant’s office each month, saving you valuable time and money.
With a cloud-based accounting system like Xero, you don’t have to be in the office in front of your computer to access your financial information. You can see your ledgers and reports from anywhere, on any device. If you want to work from home one day, you can log in remotely to send invoices, check your reports, or manage expenses, etc.
4. Accurate reporting
An important component of running your own business is reporting. Accurate reporting enables you to better manage your finances and understand your profitability. It’s vital for making informed decisions about your business.
Cloud based accounting provides you with accurate reporting at the click of a button. Using systems like Xero you can easily access income and expense reports to keep a finger on the pulse of your business.
The information is available to you automatically–you don’t have to spend hours in front of a calculator (or working with error-prone spreadsheets) going through every invoice to see your numbers. Simply by keeping your records in a cloud-based system, you can easily generate accurate reports.
If you’re hosting your accounting information on your computer hard-drive, it’s worth looking into cloud-based accounting to see if you can benefit from the switch. Given the ease of invoicing and accurate recordkeeping, combined with the accessibility of a paperless system, you may find cloud-based accounting software (like Xero) is the right system for you.
If you’d like guidance or have any questions about moving to the “cloud” feel free to reach out – we’d be happy to help!