Many executives and small business owners believe taxes and bookkeeping are the least enjoyable part in managing a company. Creating financial statements and drawing insights as well as day-to-day financial tracking can be time-consuming, complicated, and expensive. It is also considered to be the reason of countless administrative headaches.
Traditional bookkeeping methods are frustrating and expensive, but in spite of that, studies have concluded that small businesses are still hesitant to transfer to cloud-based solutions for accounting. This guide will assist you in determining whether or not cloud-based accounting software can make your business more efficient.
Conventional desktop software still dominates the small business sphere with a 46 percent usage rate. One-fifth of small business owners are still depending on manual ways and means.
Software and accountants are like peas in a pod
Accountants are highly valuable to business owners. According to Entrepreneur.com, taxes or accounting is the number 1 task that is outsourced to professionals. It has been agreed by executives and business owners that accountants are the most important professionals in their companies, surpassing bankers and attorneys.
Now the question is, is cloud-based software a threat to the role of accountants? On the contrary. As a matter of fact, accountants have a huge role in encouraging small businesses to implement cloud software, the same quality management software that is marketed by companies directly to accountants.
Why do accountants prefer using cloud-based software? The main reasons are: not having to worry about software maintenance or updates, quick disaster recovery, business continuity, and improved productivity. Accountants no longer need to feel the drudgery of data entry and manual reporting now that there is real-time collaboration and automated solutions available. Accountants can concentrate on acting as sound business advisors to their clients. Cloud-based bookkeeping gives accountants the freedom to do higher-level and more satisfying work as well as offering business owners more of the flexibility and control they seek.
What is cloud-based accounting software?
If you are using the store files on Google Drive or your bank’s online banking platform, then you should already be familiar with the cloud. It is a system that allows you to store software and data online
instead of your computer’s hard drive.
There are numerous cloud-based accounting solutions for your business that were produced for non-accounting
professionals. All you need is a few days at the most to familiarize yourself with the system. The more
exposed you are with website and internet-based software, the less time you’ll need to get acquainted
with the system.
What cloud-based account software does
Basically, cloud-based software is like desktop accounting software – it handles your basic accounting and bookkeeping functions. There may be a number of options in the market, but the main players present the same basic functions, which are invoicing, tracking accounts payable and receivable, bank synchronization and reconciliation, financial reporting, customer and vendor profiles, cash flow snapshots, financial reporting, and bill management. Other software also offers quotation, inventory, payroll, and other services which are either part of the package or as an add-on.
What other accounting software options are there?
Xero, Intuit QuickBooks, and Wave are the most popular cloud-based accounting solutions. Every single one of them has a different model, pricing, and feature set that makes it ideal for some businesses but not for others. When you check the reviews and ratings of these three software, they can be consistent because it would depend on the users. Other timesheet software includes Zoho Books – which lacks payroll integration, FreeAgent, NutCache, KashFlow, and FreshBooks – which is popular with sole proprietors and freelancers because it focuses on invoicing). For more expensive but advanced solutions, check out Financial Force, Sellsy, and Intacct.
89 percent of traffic is commanded by Intuit QuickBooks Online and Wave and Xero are at 4 and 5 percent respectively.
Which is the best solution for you?
Only you can decide which solution is the best for your business, but one of the main purpose in converting to cloud-based software is to make your business’ financial management much easier. When you compare alternatives, ask the following questions:
How many users need to log in to the system?
Do you want inventory solutions within your accounting solution?
How much is your budget for accounting?
What types of reports are needed and to what degree will customization be essential?
Does the software need to scale with your business?
How many invoices do you create every month?
Are you using other software that you’ll need to integrate with?
Do you use a smartphone for business?
Do you need payroll services? How many employees do you have?
Shop around after knowing the features that matter to you. Select the best contender and avail of the free trial. Your schedule, as well as your accountant, will thank you.
Wave centers on the needs of freelancer, microbusinesses, and sole proprietors: simplicity, low or no cost, and basic integrations. If you own a business that needs a lot of integrations, want inventory tracking, or looking to scale, this software will not be a good fit.
QuickBooks Online is perfect for small and mid-size businesses (SMB) that are looking to scale and have moderately complex needs for integration and functionality. However, it does not have great mobile apps and neither has all the functionality of QuickBooks Pro.
Xero is similar to QuickBooks Online; it is the innovative, hip version of QBO. It offers fixed asset tracking, multi-currency support, a huge growing number of integrations, and better automation of functions like categorizing transactions. On the other hand, though it may challenge QBO, it still has a long way to go especially in the payroll aspect.