Moving from a desktop accounting software program or a manual set of books to a cloud-based solution might seem like an unnecessary step when everything has been working just fine for the past x number of years. In this brief article, I will explain why moving your accounting to the cloud is actually the most-efficient way to run your business.
The general theory is similar to how the U.S. Congress operates. If it ain’t broke, don’t fix it. This approach has not served Congress very well as the technology sector has grown exponentially and become so complex that they are not sure if it is broke or not. As a business owner, keeping up with technology tends to yield added efficiency which in turn yields more profit.
Benefits of moving to a cloud-based solution:
Cloud-based accounting, such as Xero, provides a wide-array of easy-to-use features that will actually streamline your accounting. Let’s focus in one of these right now. With bank feeds enabled, you are encouraged to reconcile your bank account(s) daily. This immediately improves the accuracy of your financial reporting. If you know that your cash is reconciled, your financial statements can be run daily on the cash basis. This is a great way to see how things are going as the month moves along.
Another great feature is the customizable Dashboard. When you log in, you are immediately taken to your dashboard. Here you see your Key Performance Indicators (KPIs) all in one place. Wouldn’t it be great to see your sales numbers, your accounts receivable (what is owed to you) and your reconciled cash balance all in one place?
Let’s look at another important benefit, the ability to have remote workers – anywhere in the world – work on your accounting without you having to set up Virtual Private Networks (VPNs) or create an account with LogMein or Splashtop to enable your workers to securely access your desktop software.
No more worries about your data getting lost or corrupted. You will no longer need to rotate 10 different back up tapes.
And, here is the benefit that I appreciate most a small business owner, I don’t need any special hardware or software. It works with my favorite browser. I don’t know about you, but I used to cringe when the IT tech support person would show up at my office – I knew I was going to pay through the nose before they found the answer to my problem.
Negatives of moving to the cloud:
There really aren’t many negatives to this move. We now know from above that this is a secure process using the latest encryption methods. We don’t have to provide our remote workers with any special equipment or rely on them to update software to make their connection secure to your sensitive data. And we get a lot more real-time data.
Oh, the monthly fee, yes, you will now pay a monthly subscription fee where before you never had to do that. If you use Xero, your average annual cost is approximately $360/year. You can easily spend that on backup solutions, IT visits and other related costs of D-I-Y in-house server hardware/software.
Stephen Hartfield, CPA
Hartfield & Company CPAs, PC
August 8, 2020