Cloud accounting explained
Cloud accounting may be a big word to some, but it’s actually one of the best things to happen to business owners.
To help you understand cloud accounting software better, I’m going to answer a few common questions I usually get on this.
1. What is “cloud computing?”
It’s simply using the internet to access software and storage, rather than physically installing it in a computer.
2. Did you know that you’re already using cloud computing?
Many people are actually using cloud computing without realising it. For example anyone with Hotmail or Gmail accounts are already “in the cloud” as the software and data is stored remotely and is accessible from any computer, not just your computer.
3. What is cloud accounting?
Cloud accounting, also known as “online accounting”, serves the same function as cloud computing. You might install the software on your computer but it runs on servers and you can access it using your Internet. In some instances, you won’t need to install the software on your computer and can access it via web browsers.
4. Why is cloud accounting good for your business?
Cloud-based accounting software offers a number of benefits for businesses including:
- The cloud alleviates the need for businesses to store and manage data and maintain expensive computer hardware. You can operate the software from a single computer with a standard modem providing an internet connection, without being connected to a server or having specific software installed on the computer;
- The information can be updated and accessed from any computer anywhere in the world;
- There is only one ledger kept and that is the file in the cloud, which improves the accuracy of the information and therefore minimises errors at BAS and tax time;
- The ability for owners to interact with their accountant in real time instead of having to send the data file to the accountant each time;
- A monthly access fee is paid which usually works out less than the cost of buying the software and then paying for annual subscriptions; and
- The software is automatically kept up-to-date by the provider meaning that you don’t need to download updates such as new tax rates where the payroll module is used.
MYOB provides cloud accounting solutions
An increasing number of businesses, particularly start-ups, are choosing to use cloud based accounting software such as *MYOB Essentials to process their day to day transactions, manage cash flow and also keep track of purchases and payments. MYOB Essentials is suitable for:
- Small businesses with simple accounting needs
- People new to accounting or accounting software
- Businesses that have outgrown keeping manual records.
5. What does this mean for your accountant?
As a practicing chartered accountant, I find that it is more efficient to process my client’s end of year adjustments. I can seamlessly access my clients cloud accounting software such as MYOB Essentials, without having them to send it to me to download.
A number of my clients use MYOB Essentials, so when it comes to tax time, I simply log in to their online file and process the end of year adjustments which is then updated in real time, all with little interruption to the client. There is no need to send the updated file back to the client, or send the journals and other changes to the client’s bookkeeper for processing in their data file.
Another benefit of using the cloud is that I can review my clients operating results at any time (including in April or May each year for tax planning purposes) and provide proactive and timely advice on issues impacting on the business (eg. fall in margins or a failure to pay the 9.25 percent superannuation guarantee). This adds more value to the service offering by helping to keep the business on track and also comply with its tax obligations.
Find out more on how the right online accounting software can make your business life easier.
*MYOB Essentials was previously known as LiveAccounts