2013 has been the Year of Cloud Accounting

cloud_accounting

Cloud moves to the mainstream

It was around 2011 that we began to see the true advantages of cloud really begin to emerge. It was not from inside the software but rather that cloud accounting enables far better collaboration with start ups, small business and fast growth organisations. This is the truly revolutionary idea as it allows accountants into the financials to give value added commercial advice to growing businesses or organisations going through a period of change.

Let’s consider some examples:

  • With cloud software it’s far easier to sync bank account data straight into your accounts (bank reconciliations are remarkably fast when you’re working from the same source data).
  • Another benefit is that accountants can Collaborate online with clients in real-time and on the same live data, meaning that small businesses can receive simple, jargon-free functionality with their accountants discreetly doing the ‘heavy lifting’ like charts of accounts;
  • There’s even a service that allows firms to take a picture of a paper receipt with a smartphone, then for it to be automatically transmitted into the cloud and remotely entered into their accounting software (no more ‘shoebox accounts’ from that client!).
So we’re in a period where a new type of accounting is saving small firms and their accountants from pain with data entry, reconciliation and error-checking, freeing them up to spend more time on more profitable tasks. This can only be a good thing but is just the beginning.

A world of possibilities

It’s in 2013 and beyond that we’ll really see why cloud will no longer just be about making life easier, but also giving firms significant competitive advantage by helping with their key business issues. Hard to believe? Already firms that use the cloud to manage their finances are twice as likely to be fast growing as those that don’t.

Let’s take two of the top challenges faced by small firms - getting finance and getting paid - and the way that cloud accounting addresses them:

  • Getting Finance - It’s no secret that banks struggle to finance fast-growing small businesses, which are often so hungry for working capital that they resort to using personal credit cards to fund expansion. This is due in no small part to the challenges lenders have in getting the quality and quantity of information they need to extend appropriate finance. These challenges lead them to put in place procedures and terms simply too onerous for the typical small firm to bear. As an example, less than 10% of firms that could use invoice finance products currently do so, even though this sort of working capital finance product could improve the cashflow position of many more firms. In the near future, small but growing firms will find it much faster and simpler to work with lenders, and to get the growth finance they need.
  • Getting Paid – Late payment and bad debt is another critical issue for small firms, with existing best practice credit management tools often too remote and complex to be adopted in large numbers. Cloud accounting will finally drive mass-market adoption of electronic invoicing and payment among small firms, eliminating many exceptions, and making it far easier to manage and finance trade flows.

 

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