Cloud based accounting

Cloud accounting 101

In Accountancy, Advice and tips by Caroline

If the phrase ‘cloud accounting’ puts your head in a spin, then fear not, as we will talk you through what it is and why your business could benefit from it. 


Cloud accounting definition


According to Webopidia, cloud accounting is ‘accounting software that is hosted on remote servers. It provides accounting capabilities to businesses in a fashion similar to the SaaS (Software as a Service) business model. Data is sent into “the cloud,” where it is processed and returned to the user. All application functions are performed off-site, not on the user’s desktop’.

In layman’s terms, it means that you can access your accounts safely on any device anywhere with an internet connection. 


What are the benefits of cloud accounting?


Cloud accounting can save you time and money. As the software streamlines the creation of many of the repetative monthly tasks such as creating invoices and reports, you can free up time to focus on other aspects of the business. 


With all your business financial information at your fingertips, you will find filing your tax returns and reports to HMRC much easier. With the introduction of Making Tax Digital  having accounting software that integrates with HMRC is now vital.


One of the main benefits is that it provides up to date information to your accountant. With this, they are able to provide you with meaningful insights and recommendations to help drive your business forward. 


As a bonus, cloud accounting software can also minimise the risk of hackers gaining vital information. The software is easier to keep up to date with the best security features available to keep your data safe. In addition you are mitigating the risk of losing files in the event of theft or damage to devices.  


What are the best cloud accounting companies available?

Researching the pros and cons of each company can be a bit of a mine field, however Tech Radar have identified the following five companies as the best on the market for 2019. 

1. FreshBooks

2. Intuit QuickBooks

3. Xero

4. Sage Business Cloud Accounting

5. Kashoo

Have a look at Tech Radars’ in-depth research into the key features of each here.


How to choose the right cloud accounting software for your business:


Which service provider you choose can depend on what your needs are. A smaller business may not need the extensive features offered by some software, so therefore a more basic service would suffice.