6 Strategies To Improve Efficiency With Cloud Accounting

An image of a local Burlington small business owner reviewing documents in their cloud accounting software.

The Greek philosopher Socrates once said, “The secret of change is to focus all of your energy, not on fighting the old, but building on the new.” But when it comes to running a small business, this is easier said than done. While most small business owners would love to focus all their energy on growth and expansion, keeping your books of accounts in order is a time-consuming task. Making sure every financial transaction is recorded, every invoice and receipt is accounted for, and all the numbers in your accounting books add up takes extra care and effort. And yet, some error or the other always manages to slip in, making the job frustrating. But there is a way to cut down on the time you spend on these tasks and channel it better – cloud accounting.

Cloud Accounting: Expensive Tool or Cost-Effective Strategy?

Small business owners often hesitate to adopt cloud accounting, thinking they’ll have to dole out loads of money to install it. Many basic cloud accounting services are available online for free, and advanced or customized versions are available for a fee, but they more than makeup for it.

It’s about perspective: if you think of cloud accounting as simply a tool to help with mundane bookkeeping tasks, it might seem unnecessary. But think of it as a strategy to enhance the efficiency of your business, and you’ll realize that cloud accounting is just what you need.

Here’s how cloud accounting can make a big difference to your small business:

Managing Payments and Cash Flow

The simple job of recording every single financial transaction, be it money coming in or money going out, is often where the biggest blunders are made. Getting a single digit wrong can wreak havoc in the final tally of your ledgers, making you lose sleep till you find the error. Also, as your business starts growing in volume, things such as sending invoices (and reminders) and making payments to suppliers will rise. Any lapse in these jobs affects your business adversely.

Even the most basic cloud accounting apps offer services such as automated data entry, invoice making, and expense tracking. You can customize these apps to automatically send invoices and reminders to clients on a predetermined date until the payment is made. This eliminates any chance of human error. Not only that, the automated invoice can carry a payment link to allow the client to make direct payments to your bank account. The app then records this detail into your digital ledgers so there is no discrepancy in your account books.

Cloud accounting collects feeds directly from your bank and reports them in financial statements. While this automates the bank transaction recording, it is still advised to do monthly bank reconciliations to ensure records are accurate and updated.

Filing Documents on The Go

Another interesting feature is that you can file documents on the go. The cloud accounting software also comes in the form of a mobile app. You can use the app to take pictures of receipts or bills, upload them to the cloud accounting app, and mention the necessary details. It is especially useful when you have to travel for business or entertain clients; all the bills and expenses can be recorded instantly on your phone without fear of forgetting to do so after you return to the office.

You still have to file the physical copy of those original receipts. However, cloud accounting gives you a reference you can use to ensure all receipts are filed.

Compiling and Analyzing Financial Data

Are you out for a meeting with stakeholders and urgently need the latest sales figures? Cloud accounting allows you to access such information with just a few clicks. Other than the usual business reports and balance sheets, cloud accounting apps these days can also collate and analyze data to compile customized reports about any facet of your small business, from comparative sales figures of the last 5 years to something as specific as which of your products are doing the best or worst. Since these are also automated and updated based on your last entry, you can give your clients and investors the latest figures and information without losing time in compiling them manually.

You can also analyze the data to track budgets, make better forecasts, and set realistic goals and targets.

Automating Data Validation

One key benefit of cloud accounting is that it can validate the data being entered right at the beginning instead of just at the end. Missing numbers and common data errors, such as wrong formatting or miscalculation, are identified and flagged while entering the data into the system. This allows you to rectify errors in real-time, saving you hours of work on finding that one formatting error that went unnoticed and affected the final tally during the tax season.

Make Data-Backed Informed Business Decisions

Cloud accounting apps can be accessed on your business computer, laptop, mobile, or tablet, which is connected to the internet. It makes your accounts easily accessible from anywhere at any given time. It reduces your dependence on one hardware and saves time and power when making informed decisions. For instance, when presented with an investment opportunity, you can quickly refer to your books of accounts on the go and make the necessary decision without delay. In this day and age of fast-paced communication and business, this feature could well turn out to be the game-changer in your business’s growth story.

Having Control of Data Security and Access

Cloud accounting apps use the best data security encryption and firewalls to protect your business’s sensitive data. Moreover, these security measures are updated to thwart any new threats that may come your way. You can also control whom you want to give access to and how much access you want. So you have an extra layer of security even within your business.

As we said in the beginning, it’s all about perspective. Cloud accounting minimizes human errors while maximizing time on hand—time that you and your staff can use more fruitfully to strategize for the next step in your business expansion plans. Choosing the cloud accounting app best suited for your business needs is crucial.

Contact Edelkoort Smethurst CPAs LLP in Burlington for Your Accounting Needs

Talk to a professional accountant to help you set up the entire cloud accounting system and review and maintain the records. They will also ensure the system is updated with the ever-changing tax rules and business needs. At Edelkoort Smethurst CPAs LLP, our accountants can provide services to outsource all your accounting needs. To learn more about how Edelkoort Smethurst CPAs LLP in Burlington can provide you with the best accounting expertise, contact us online or by telephone at 905-517-2297.