Taking Advantage of the Cloud for your Accounting

This post explores some of the areas where business can take advantage of cloud technologies to significantly improve the effectiveness of their Accounting Function.

So without further adoo, I will dive right in:

Accounting Systems

There are a number of accounting systems for SMEs that now reside in the cloud. They provide excellent functionality and enable businesses to conduct their accounting operations much more efficiently than with legacy desktop systems.

Some key advantages of cloud systems are:

  1. businesses can interact much more effectively with their accountant as all of the information is stored in the cloud. There is also better interaction with dispersed members of your team for functions like purchase ordering, expense claims etc.

  2. better cloud systems tend to be less clunky in handling error correction, communications with debtors/creditors

  3. quite a few also have bank feeds, automation features and rules that help significantly improve processing times

Some disadvantages are:

  1. Cloud platforms are developing for the UK with less focus given to Ireland due to it being a smaller market

  2. The data is in the cloud on the software provider's server. It is important to have a clear data retention procedure to ensure you have sufficient data downloaded to explain your ledgers offline if you discontinue using any particular software provider

In our view the advantages outweigh the disadvantages right now and we have invested heavily in developing our cloud accounting expertise.

There are many cloud accounting firms in the SME space but the main names you will find in Ireland are:

  1. Xero

  2. Surf Accounts

  3. Quickbooks

  4. Big Red Cloud

  5. Sage One

These systems are used by businesses of a reasonable size and are relatively inexpensive to use. Functionality varies greatly between the systems so research is required to see what suits your business best.

Cloud Systems in the market place to handle larger levels of transactions include:

  1. Odoo

  2. Netsuite

  3. Financial Force

  4. Accounts IQ

This is a rapidly evolving environment. I have left the comments section open in this post so that you can add your experiences of cloud systems you like if you wish to.

Transaction Processing Automation - Accounts Payable

There are a number of technologies in the market place to help automate the processing of accounts payable information. Some of the products in the marketplace that we are aware of are Autoentry, Receiptbank and Hubdoc. Essentially what happens is:

  1. The user scans the purchase invoice onto the network

  2. These software solutions grab the scans and generate draft postings to your ledgers for review

  3. The bookkeeper reviews these and posts them

  4. When analysing general ledgers at a later date, the reviewer can drill down to the source document.

Automating the follow up of Debtors

While this technology existed in non cloud systems in the past, it was clunky and required a lot of setup to get operating efficiently.

Cloud accounting systems have made the process of following up on debtors much easier.

  1. Functionality on most cloud accounting systems as standard today include the ability to:

  2. email invoices to clients directly

  3. generate recurring invoices to clients (for subscriptions) that generate and issue automatically

  4. automatically generate and issue debtors statements

  5. issue periodic reminders to debtors who have not paid in the form of email

Direct Debit

There are a number of cloud technologies at the moment that interface with your cloud accounting system and enable businesses to easily and effectively have their customers pay by Direct Debit.

Where your business allows it, you could have it as a pre-requirement that a customer signs up to your Direct Debit program before you provide them with your service.

This greatly improves the debtor collection process.

Accounting System Apps

There are speciality apps that provide solutions in various sectors. These sit in the cloud and can be accessed from your phone or your computer. They allow you to collaborate with your employees and essentially enable you to operate in a more effective manner that in the past.

Apps cover all sorts of functions from Human Resource Management to Payroll, Sales & Marketing, CRM, Trade Management, Manufacturing, Property Management, Retail, Ecommerce; the list goes on.

The functionality of the systems varies. It is important to select the right system and it is equally important to define the level of detail you wish to manage your business at. Managing at too low a level of detail can result in many lost hours feeding data to the machines.

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