Cloud accounting is when the accounting software you use is accessible by the internet and not downloaded onto a specific computer. In my practice, I am a Cloud Accountant (also called a Virtual Accountant) and work only with cloud software.
Before I outline the main reasons why I became a Cloud Accountant it is important to understand what cloud accounting is. Cloud software is software that is stored on someone else’s server (Amazon or Google are the two main providers). Individuals access it through an internet connection.
Ease of Use – Apps on your Phone
I love that I can download an app on my clients phone for my software app of choice (ie Xero but Quickbooks Online has it too). Clients can create invoices and receipts then email them to clients right on their phone. This transaction is also recorded right into their books. So after they invoice that client, they can then check out their profit and loss report and see exactly where they are. All this happens right at the job site or wherever you happen to be.
E-Receipts – Pictures of Receipts instead of Paper
You just finished lunch in a restaurant with a client. You get your receipt from the till then you put it in your car. It gets bleached by the sun on the dashboard of your car so it is barely legible or gets stuffed in the glove compartment. Eventually (hopefully) it will make it to a file folder. That’s option 1, option 2 is that you take a picture of the receipt which automatically uploads a picture of the receipt directly into your accounting software. You can even code it on the go to let your accountant know what it is. Months down the road, when you are reviewing your transactions you see the restaurant charge, click and oh, a picture of the receipt.
This surprises people as many people say this is their first argument for not moving to the cloud. For each cloud software you should look into their security when considering the move. The ones I work with all use multiple layers of security. For example, for physical security, at all Amazon server locations there are fences, 24hr surveillance, security guards and security systems. Next is hacker security. This part gets complicated, but all the cloud software’s I work with, use bank level encryption. This means they encrypt the data to the same level as the bank websites that you use. On the news, you likely have heard about breaches. The breaches I have seen have been due to bad passwords chosen by owners (ie passwords that are generic, simple and used on multiple sites).
Most cloud software offer many integrations. Xero has over 500. These are other apps that work with Xero to exchange information. Someone could use Shopify for their website (which allows you to have a cart and payment options) and this integrates with Xero and records sales from Shopify right into your accounting software. There are many others for everything from payroll to inventory.
There are many other reasons why I love being a Cloud Accountant. These are just the main ones. If you haven’t looked at the cloud, check out the Xero video to see an example of what moving to the cloud can do for your business.
Then call me if you want to switch. You won’t regret it.
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