Every small business owner dreams of making it big! However, is it possible to make that dream come true when you are struggling to find or work with your business tools?
The primary concern of every business owner is to keep track of the finances. When you are a small-scaled business unit that has just started in the market, it is easy to keep tabs on finances using spreadsheets or dedicated accounting books.
However, these methods are not error-free and are tedious for anyone. Having a cloud-based accounting software in your arsenal will help you streamline the accounting process and will enable you to have a better overview of your finances. In this article, we are going to discuss why every small business needs a cloud-based accounting software, so let’s get started.
However, first, let’s have a look at the problems that come with using traditional accounting software.
- Software updates are the real pain that hit businesses below the belt often.
- Even the data inside the traditional accounting system is not up-to-date, if not done manually by the manager or the person tasked with the updating of data.
- Not everyone will have access to finances or customer data.
- If you are one of those company’s that likes to keep backups, then it gets costly.
- Upgrading the software is time-consuming and expensive.
- Slow customer support.
6 basic reasons why your small business needs cloud-based accounting software
Let’s dig further into the benefits that serve as a reason for adopting cloud-based accounting software for your small business.
1. No installation requirement
The most crucial benefit of cloud-based software is that it is hosted online. Cloud-Based accounting software is no exception. Because the software is hosted online, small business owners do not have to make substantial financial investments on purchasing hardware and install the software on it.
Traditional accounting software needs to be installed on all the computers in the accounting department. To use the cloud-based accounting, all the employee has to do is type the information into the address bar of the web browser and log into the account.
Cloud-based accounting software keeps pushing updates for their software; on the other hand, traditional software has to be updated manually and take a lot of time.
2. Improves accuracy
With all the financial record available inside the software and stored at a centralized location, the risk of accounting errors goes down significantly. The best part is that cloud-based accounting software is easy to learn and use. You can enter expenses and income as per the data requirement in the pre-set fields, and also categorize your transactions for ease of search.
While using cloud-based accounting software instead of spreadsheets, an employee doesn’t have to worry about the best practice and formulas, making the task easy and much faster. Reports are accurate in the cloud-based accounting software and can be easily decoded without any rocket-science.
3. Promotes collaboration
Cloud-based accounting software enables ease of access for authorized users. End users do not have to worry about uploading and maintaining financial data. They can simply provide access to their accountant who can log into the accounting software, at any time, from any place using any device.
The level of access can be managed by the business owners while using cloud-based accounting software; you can choose not to provide editing rights to employees. Users can decide not to give access to bank accounts yet allow team member(s) to handle the payroll part of the software.
4. Real-time data
Business owners can easily connect the cloud-based accounting software with their business bank accounts. This allows them to track
- expenses easily
With regular data update from the employees inside the software, business owners have access to real-time data always.
5. Simple automation
Cloud-based accounting software allows business users to create automated workflows. Workflows enable businesses to save more time for their other business activities such as sales, marketing, and customer support.
A small business owner or the associates enter a vendor’s information into the system. They now set up a workflow that automatically pays that vendor each month on the decided date. Using workflow automation, associates and owners can set rules that automatically send out recurring invoices to the customers once their information is uploaded into the software.
6. Automated Backups
With traditional accounting software, making physical backups is a necessity. These backups are stored locally in external drives or inside the computers itself. It is a tiring and time-consuming task to create back-ups for files that contain crucial financial data. These backed-up data are prone to be lost due to mismanagement of the external drives or human error.
With Cloud-based accounting software, these troubles are a thing of the past. You can either set a schedule, or the software already comes with a pre-set back up schedule which is automatically done in the background without hindering your daily task.
Let’s refresh what we have learned.
8 simple ways cloud accounting software benefits small businesses
- The business owner will get a detailed overview of their current financial position, in real-time.
- Multiple users can be given access, making it easy to collaborate online.
- Owners can also control the level of access individuals have while using cloud-based software.
- Automatic updates allow employees to keep their focus on their daily task without any hindrance.
- Everything is done online, which means no hardware installation cost.
- Everything is backed up automatically.
- Automatic updates that involve no manual labor and consume not much of the employees’ time.
- Reduced upfront business costs and issue that are prevalent in traditional accounting software – system administration costs, maintenance, upgrades, and server failures.
We hope that this article can shed proper light on the usage and benefits of using cloud accounting software. Small businesses have a dream of making it big in the market that already has an abundance of competition. To stay on top of their game, they will need all the help they can get, and smart modern tools such as cloud-based accounting software allow them to do so.
Do keep in mind these reasons and make the right choice for your small business by adopting a cloud-based accounting software to streamline your finances and check all finance-related issues in real-time.