A 2019-2020 report from the Australian Bureau of Statistics revealed that 55% of Australian businesses use cloud computing technologies. And it was small businesses that were the most significant users of paid cloud-based software.
With the pandemic pivoting how businesses operate and new technologies launched each day, it wouldn’t be surprising if the following report from the ABS would show a further increase of companies embracing cloud tools.
Cloud Accounting for Your Small Business
One tool that companies today must utilise is cloud accounting. It may sound pretty high-tech, but to put simply, cloud accounting means getting all your books done online via the internet, where all your data are stored safely in “the cloud”.
With today’s competitive climate (especially in the startup scene), you have to have an excellent business model to stand out from your peers. However, if your financial records are out of shape, you might find yourself getting caught up in a lot of catch up work when it’s time to pay taxes, apply for funding or pitch to investors.
If you haven’t yet, you should consider using cloud accounting for your small business or startup in 2022. You might be missing out on many opportunities if you’re still relying on a spreadsheet or using traditional accounting software.
What is cloud accounting?
Before we look at the advantages of using cloud accounting, let’s define what it means.
Cloud accounting means performing basic accounting tasks, like bookkeeping, using cloud-based software. “The cloud” refers to servers and services that run on the world wide web (a.k.a. the internet). When you use cloud accounting software, you can access your financial data over the internet (on the cloud provider’s platform) instead of locally on your computer.
Users, such as yourself, your employees, and even your outsourced accountant or VCFO can retrieve the data they need even if they work remotely. One of the most significant advantages of cloud accounting over traditional accounting systems, especially since hybrid working is “the way of the future”.
Most early accounting software tools are only available on-premises, which means it only runs on the accounting team’s computers or the company’s server. If anyone needs access to the tool, the software would need to be installed on the computer, and the user needs to be within proximity of the server.
With cloud accounting, bookkeepers, accountants and other relevant individuals only need login credentials for the system to access it through the web. Some cloud accounting providers offer mobile applications so that it’s easier for users to access the tools on their phones or tablets.
Benefits of Cloud Accounting for Your Business
Besides ease of access, there are more reasons why you should make a move to cloud accounting in 2022.
Handling receipts and other paperwork for a fast-growing company is a daunting task, especially when you’re already caught up in many areas of the business. Cloud-based software makes bookkeeping and accounting more manageable as it allows the integration of other tools to address specific business problems.
Here at Cloud CFO, we help our clients integrate an expense management tool (our favourite is Dext Prepare) to fetch all their paperwork and push essential data into their accounting system, which we also help set up for them.
Did you know that every year $115 billion is owed to small businesses in Australia (around $52,000 for every small business) because of late payments? And one of the culprits of delayed payments is inefficient collection processes.
If you are still manually issuing invoices or running them in a system that doesn’t integrate with an accounting tool, it’s time that you make a change. You can efficiently collect the cash your customers owe you through automated invoice reminders with cloud accounting software. You can even schedule sending invoices for recurring transactions so you won’t miss any. More importantly, it’s easier to monitor your accounts receivable, which can create a significant impact on your cash flow.
In our digital world, it’s surprising that more than half of Aussie workers are still heavily reliant on paper. However, reliance on paper records could deter the success of your startup or small business.
Paper files could easily be misplaced or damaged, meaning you are at risk of losing essential data. Also, there’s a vast difference between sorting through hundred of paper records versus making a quick search on a readily available cloud-based tool. Time spent sifting through paper documents could be channelled to focusing on high-value tasks.
Ready for growth
The ability to scale is vital for any startup. Naturally, when a founder starts a new venture, the goal is to bring the business to the highest levels. That means all resources and tools of the company should be capable of rapid expansion.
In this case, cloud accounting tools are highly scalable. It can meet your needs now as an early-stage startup and then expand as the business upscales.
If you want to make 2022 your year and see your business grow and expand, now is the time to embrace cloud-based tools.
At Cloud CFO, not only do we know our numbers, we’re experts in cloud accounting, too! We can set you up instantly and guide you on the best accounting software systems.
Get in touch with us today to discuss the best cloud accounting solutions for your business needs.