5 reasons small business owners should switch to cloud accounting
Why choose cloud accounting? Because the process of paying your bills is more convenient, your expense reports are easier, your financial analytics are real-time and at your fingertips, there’s much less chance of fraud or embezzlement, and everything’s backed up in the cloud.
But the most amazing thing of about cloud accounting … you don’t ever have to worry about keeping track of those nagging receipts from your business trips again! Just snap a picture of each receipt and upload it right at the restaurant or hotel or wherever your business takes you!
Those are just a few of the benefits of cloud accounting. Here are more features included in my list of 5 good reasons every small business owner to make the switch to cloud accounting.
1.) Cloud accounting systems and apps eliminate the paper chase.
Online bill paying tools provide paperless work flow management and file storage. Vendors can email invoices directly to an online bill payment application, and those invoices are electronically set up in the processing queue. From there, the approval and payment process is all managed on-line; and as a result, companies spend less time locating, organizing and filing paper documents.
Employee expense reporting apps automate the entire expense report workflow, dramatically speeding up both the recording and reimbursement process. Receipts can be captured using a smart phone’s camera function and automatically uploaded to the company’s accounting system without handling any paper. Using smart technology, individual expense items are mapped to the right place on the expense report; and at the end of the month (or each credit card billing cycle), employees receive an email with a copy of their completed expense report.
Finally, the days of needing to print and distribute paper copies of financial information are gone. Electronically generated financial statements and dashboards can be accessed from a computer, tablet or smart phone – no more waiting for paper delivery.
2.) Business owners have access to their financial information anytime, anywhere.
Entrepreneurs can have better visibility into the financial health of their companies by having real-time access to key reports and dashboards. They can check cash balances, review revenue trends, or pay bills in minutes and from any location. Customizable dashboards can give business owners up to date financial information, which might include things like:
- Summary financial statements
- Working capital balances
- Summary accounts receivable and accounts payable
- Sales and profitability trends
- Cash flow analysis
3.) Online bill payment and expense report products integrate with online accounting systems.
With today’s technology tools, the accounting process has become both more efficient and more reliable. Invoices approved and paid via online bill payment apps are automatically posted to the company’s accounting system. What was once a multi-step process has been reduced to a streamlined workflow, with time spent on invoice approvals and payments being reduced by as much as 50%. In addition, the increased automation results in a lower likelihood of processing errors, making the process more reliable. When it comes time to prepare year-end reports and tax returns, the information is well-organized and readily available. All of this can result in substantial cost savings for a company.
4.) Better controls can reduce the risk of fraud or embezzlement.
Consider these statistics provided by a 2014 study performed by the Association of Certified Fraud Examiners (ACFE):
- Survey participants estimated that the typical organization loses 5% of revenues each year to fraud.
- Fraud impacts 29% of businesses with fewer than 100 employees.
- Small business fraud goes undetected for an average of 18 months, resulting in an average loss of $154,000.
- The vast majority of occupational fraudsters are first-time offenders.
Well-designed cloud technology allows data and cash access to be assigned to those who need it, with the flexibility to customize permissions for each user. The big winners in this technological transition are small businesses, many of which don’t have the manpower, systems or know-how to ensure that proper internal controls are in place to protect against theft. Online bill paying applications allow for multiple approvers with the click of a button, and separate individuals can be set up with the ability to actually disburse funds. In this way, businesses can enjoy a proper segregation of duties where none existed before.
5.) Important data is backed up in the cloud.
With qualified cloud services, critical data is secure. Rather than manually backing up data from company hard drives, cloud solutions often offer this service automatically. Furthermore, data in the cloud is usually protected by high-level security protocols, exceeding those that would be employed in a local, physical environment. Documents that are received electronically, or scanned and stored in the cloud, are protected from fire, theft or other loss. And since the accounting system itself is maintained in the cloud, a computer crash won’t cause a disaster. In fact, a company is often able to re-access its accounting system and data by simply using another machine.
Editor’s Note: Milestone Advisors is now mACCOUNTING. The re-branded company is focused on bringing its clients customized, easy-to-use cloud-based accounting and bookkeeping processes so that they can focus on what they do best. Read why here.