Automation and digitisation are major trends in scaling up companies. Streamlining your processes goes a long way towards building a successful, investable company. Very real progress in the field of cloud accounting is enabling business owners to do more, faster – enabling incredible jumps in growth and profitability potential. Accounting and software might not be the most alluring words in an entrepreneur’s vocabulary, but a deeper look into the benefits clearly makes it attractive for any scale up company.
Cloud accounting refers to using cloud-based software to run the accounting function of a business. This new approach is replacing the old desktop versions of accounting software at a rapid rate. And for good reason! Here are the top seven reasons why your business should be run in the cloud:
- Live access to financial information
Probably the biggest advantage of cloud accounting software is its ability to link directly to your company’s bank feeds. By linking up with your bank, transactions are being pulled through from the bank straight into the accounting software. This means no more uploading of bank statements, saving a lot of time. It also means live access to financial information. Because all bank transactions as well as all debtor and supplier invoices are captured within the cloud system, your financial info is always up to date. Business owners and management can now monitor sales, cash flow, debtors, financial targets, payables and more at any time. This has never been possible before in the history of doing business. It will play a massive role in enabling entrepreneurs to make swift, quality decisions, leading to more effective businesses.
- Work from any device from anywhere in the world
Cloud accounting is enabling the vagabond lifestyle. Owners of fully digitised companies are able to work from anywhere in the world, making extended travel much easier. Co-working and co-living spaces like Roam (www.roam.co) are a testament to this trend. Cloud accounting plays a huge role in enabling this doing-business-from-anywhere lifestyle. No longer bound to a specific computer at the office, it allows you to log in from any device with an internet connection anywhere in the world. This is the kind of stuff that Tim Ferriss loves!
- Beautiful, fast, customised reporting and analytics
With access to live financial information, producing great management reports can be as simple as pushing a button if set up correctly. The leading cloud systems have strong reporting tools that can generate graphs, variance reports, key metrics and many more financial snapshots to form a financial dashboard for your company. Beautifully presented, these reports and dashboards give even the least financially savvy director an edge when it comes to being on top of company finance. Powerful dashboards can be customised to help all stakeholders track key performance metrics in an easy to read snapshot.
- Direct link to your advisors, investors and board
Having trusted advisors as part of managing company finance is key. With functions that allow you to invite your advisors to access your company’s cloud accounting profile, both you and your team of professionals will now have a full live view of company finance in order to give the best possible strategic direction to the business. It gives investors peace of mind and helps the board of directors
- Auto-allocations through machine learning
This is the most exciting growth area of cloud accounting software. It is able to recognise recurring transactions in order to auto-allocate them. Learning from millions of accounts being process all over the world, the software is also able to allocate transactions into their correct accounts. After just a few months of using it, your actual manual allocations should be less than 20% of all transactions. As this function increases in strength, bookkeeping work will diminish. Entrepreneurs will be able to focus on doing business, not recording it. Accountants will be able to focus on value adds and advisory instead of capturing transactions.
- All the advantages of cloud technology
Cloud-tech beats desktop software six-love every time. Top end encryption ensures that data security is taken care of. Data accessibility is instant, with no barriers to accessing key financial information. All of the physical risks to information – like a computer crashing, being stolen or having coffee spilt over it – are eliminated. Data also does not corrupt like in the case the off-line versions of desktop software.
- Save time and reduce hassles
Freeing up founder time is key to unlocking further growth in a company. An automated finance function is a great time saver. Accounts are captured faster and with less hassle. Source documents are uploaded digitally, saving time on those dreaded audit queries. Everything works paperless, eliminating the hassle of keeping slips and invoices that leave your wallet and desk full off last month’s paperwork. Say hello to more time and mindspace!
At Outsourced CFO, we have partnered with Xero as our leading cloud accounting weapon of choice. Xero (www.xero.com) is a New Zealand based accounting software technology company that is taking over the world. Plugged into entrepreneurial eco-systems world-wide, they are currently the leading solution for SMEs in the marketplace. Their offering embodies all of the above advantages of cloud accounting and more. We’d recommend them to any entrepreneurs who wish to streamline their company’s accounting function.
We live in exciting times, with new technology making our lives as entrepreneurs easier. But even with the best tech, it is still all about the people behind it. You need great people to assess, implement and advise in order to unlock the power of cloud accounting software. Get in touch with our team of professionals today to learn more about how you can rethink, automate and scale your company using Xero and other top financial technologies.