Online/cloud-based accounting software is considered by many to be the way that the accounting industry is heading because it enables businesses to keep a constant eye on their company’s financial position without having to install costly and bulky software directly on to their computers.
With online accounting all records held on the system are stored behind an encryption that prevents data from being accessed or passed on without the user’s permission. Business owners and their accountants can easily access their financial records at any time, whenever they have access to the internet. Online accounting gives small business owners a level of control and flexibility not available with desk-top accounting. They can see their business position such as how much tax or VAT is owed, any outstanding payments, current profits etc at any time. So for example when it’s time to do the VAT or tax return all the data is already there, and submitting the return is just a matter of a couple of mouse clicks.
Accountants can update records in real time without businesses having to send in reams of paperwork. And having access to live data over the internet means accountants can be more proactive in advising their clients.
Online accounting has the added bonus of being environmentally friendly. There is no need for a business to generate and print out accounting paperwork and post it off, and no need to travel to unnecessary meetings with the accountant to look over figures because it can all be done in real time online.
Although there are some variations across the accounting software, packages available in terms of price, built-in functionality and add-ons, they are in general easy to use. Business owners don’t require any accountancy training to use the online accounting software, but the software is sophisticated enough to enable accountants to extract the information and data required to meet statutory requirements and review the business position to provide quality advice and recommendations. Some of the current online accounting software available include Xero, Clear Books and Kashflow.
What online accounting ultimately does, besides providing small business owners with environmentally friendly, flexible control over their accounting, is save them time and money, so they can focus on what they do best which is running their business.