How does cloud accounting work?

What is Cloud accounting 

Cloud accounting is efficient, secure, and often a cheaper way of capturing and recording your accounting transactions and generating and viewing your financial data. If you have used Gmail, Dropbox or internet banking then you are already accessing cloud services. These cloud services are managed and hosted on a remote server with elevated levels of encryption to protect your data. 

What are the benefits of Cloud accounting software 

When you subscribe to cloud accounting software you will find that it is easy to use and accessible from any PC or Laptop using a stable internet connection or even from an app on a mobile phone or tablet. You no longer need to worry about buying or updating the software licenses in your office, or about hosting it, this is done by the software provider once you subscribe to the software services. You also will not have the need to wait until you are sat at your computer to be able to access, check or enter transactions into your accounts package because of such easy access enabling you to log in anywhere, on any device, at any time to access your accounts and financial information. 

Cloud accounting software has many other advantages, such as ensuring that cloud software subscribers have the option for up-to-date and real-time accounting information, using easily automated processes and accounting tasks, in a compliant way. This results in reducing time consuming and manual tasks, improving accuracy, and eliminating errors, giving you better control of your financial processes. 

Why is Cloud accounting important? 

Cloud accounting helps to prepare your business accounts for Making Tax Digital requirements which are soon to become mandatory by HMRC. Cloud accounting ensures that everyone complies with the digital government requirements.  

As of 1st November 2022, HMRC has removed the taxpayer’s government gateway option of filing VAT returns manually. A VAT registered business must file VAT returns via Making Tax Digital through one of the proposed authorised accounting software providers. 

Transition to cloud accounting 

Once you have made the decision to transition to cloud accounting, you should contact your trusted accounting advisor, who will assist you in choosing your primary accounting software based on your specific business requirements. After the primary software has been selected, you can then start to look at any secondary software options that you may need to assist you in the smooth running of your business, whether this is in running efficient payment systems, sales CRM, invoice processing or general bookkeeping tasks, whatever your requirements your advisors will help you fine tune and tailor the right software add-ons for your business.  There are hundreds of software add-on options to choose from available to support various industries, such as CRM (Customer Relationship Management), Ecommerce, Inventory, Time Tracking, till systems to name but a few. 

What is the best cloud accounting software? 

At Rayner Essex, our Accounting Solutions experts are certified authorised partners with all well-known software providers, including having Gold partner status with Xero, Elite ProAdvisor status with QuickBooks and Business Cloud and Sage 50 Cloud, and are also Dext pioneers and FreeAgent partners. We are therefore well placed to support you with your software selection and training, and can offer advisory services having analysed your processes and business requirements, so that your accounting software meets your specific requirements. General training sessions can be made available through our software partners or bespoke sessions can be set up and delivered by our team when required to create seamless time saving processes. 

Taking time to get the set-up right is vitally important, it is recommended that you work with your accountant and or a dedicated partner who has expertise in a wide range of accounting software and is not limited in software options, as off-the-shelf software can be restrictive and can create bottlenecks in your processes, especially if you want to see reports on specific aspects of your business, for example sales by type or location. If you have been in business a while and are converting data from another accounting package there are several companies that can do this for you. The functionality within cloud packages means you will also have the ability to import most of your data directly using Excel if this suits you better. 

Our accounting experts are deeply knowledgeable in all the major software packages, and constantly strive to stay up to date with the new functions and efficiencies that are being  introduced to the cloud accounting systems by attending quarterly software partner updates. Our experts also undergo annual certification revisions, to ensure that we retain our advisor status to continue to best serve our clients and offer impartial advice in accordance with their individual requirements. 

How does cloud accounting increase efficiency and benefit our clients? 

Cloud accounting offers you real time insights into your current financial position from anywhere, as it is all available online so there is nothing to install, and no updates required.  Cloud systems are compliant with constantly changing rules and regulations, all of which is done for you, saving you time in keeping up to date with compliance and regulations.  

This also makes for easier collaboration with an accountant as once permission has been granted, there is no longer any need to access your physical PC or laptop to access the accounts package to perform their regular tasks for you, they can access from their own laptop / PC anywhere in the world that there is internet.  

Administration work is made more efficient, as well as paperless and therefore environmentally friendly, and well organised no matter the sector, as most things you can do on the go. Be it uploading receipts via mobile apps saving hours of data entry time and making reconciliation effortless or using the facilities in place that automatically feed your business bank data into the accounting system with little to no manual involvement. 

Having all your business admin needs in one location saves having various spreadsheets and files set up on your computer, as well as physical files in the office, trying to track all the areas of your business that require reconciliation, which can be time consuming and leave room for error.  

Having your accounting software in the cloud also removes the issue of your PC / laptop not having enough space to store the data, eliminating the risk of PC failure and loss of live accounts data. There is no need for backups or restoration of data if lost due to a virus or hardware issues, as the accounts are backed up in real time and held securely in the cloud, further benefiting clients with cost-reduction. 

The software gives the client the opportunity to have instant access to management information and KPI’s (Key performance indicators) which can be customised from the software’s standard reports or enhanced from additional business apps. 

The cloud systems all allow for your accounts to be much more relevant as they are all designed to be easily kept up to date. You will no longer have to wait to see your financial position, as with all the tools now available, you can keep a lot of the information up to date daily. The data you are accessing is always the live version for everyone who is looking at your accounts so the reports you see are the actual data in real time allowing you to make informed business decisions based on the current status of your business. 

How uploading & managing documents works 

There are several artificial intelligence software apps now that can extract information from uploaded documents or link to supplier accounts to download monthly invoices such as mobile phone invoices, so you do not have to.  

You can set up direct links from your accounting software to online banking to automatically bring in bank statement transactions, as well as links from your accounting system to AI (Artificial Intelligence) apps that will automatically match receipts uploaded to your bank payment transactions to aid with reconciliation in both systems. 

For your employees who have regular business incurred expenses to claim back, you can provide access so they can upload their receipts and electronically file their expense reports for approval, thus not having the headache of chasing for receipts lost in the car or their bags.  As the expense claims are uploaded electronically with receipts attached there is also no need then to process these again. 

All this allows for business time and costs to be used to focus on running and developing your business.  These transactions will need to be reviewed for accuracy and the initial set up done but the time spent on processing will be reduced. 

Supporting documents and other relevant information can easily be sent to the cloud software to support the transactions in the accounts. This removes the need to manually locate in your office system copies of paperwork when requested, such as purchase orders, annual invoices etc.  Documents can be sent to the software via email or by drag and drop or uploading from your device when entering transactions in the system. 

In summary 

Cloud accounting has vast benefits and streamlines all processes for all involved, customer can receive electronic invoices and if you use a connected online payment these will even include a pay now button and customers can receive electronic invoices in real time. The software allows you to access and update accounting information, transactions, and financial information in real time and in a compliant way. Having all your accounting on the cloud also allows for seamless collaboration with bookkeepers and accountants who can simultaneously view and discuss your accounting data without the need for your colleagues to log out when transactions need editing. These benefits can save you time and reduce costs as you no longer need to invest in your own servers and back up services.  The efficient real-time data also means that you have an up to date status of your business, enabling you to adjust your business strategy accordingly and stay on track with your business and goals.

Get in touch 

If you are currently struggling with your accounting and find little time to update your financial information or keep your accounting organised, you need to consider cloud accounting, especially if you are a VAT registered business as it is now a government requirement to file your vat returns via Making Tax Digital and by using cloud accounting. 

We have the expertise to understand your specific accounting needs and ensure that your software choice fits you perfectly, streamlining your processes and reducing costs. Contact us now to find out more about cloud computing services and speak to one of our accounting experts. 

Back to News

Sign up to our newsletter

Join our mailing list to receive regular updates on
the news and events you need to know about.