Bookkeeping in the Cloud
Online accounts technology is putting real-time financial controls and visibility within reach of small and microbusinesses, says Xero UK managing director Gary Turner
Just like web mail or consumer-oriented sites, online accounting software is fast, simple and user-oriented, especially when compared with traditional, desktop accounts software.
Whether a small business is just starting out or enjoying rapid growth, the easy-to-use, affordable technology brings a welcome opportunity to cut down on time-consuming bookkeeping processes, as well as gain greater visibility of incomings, outgoings and cash flow forecasting.
The cloud aspect of the technology is particularly crucial: by moving to online accounts software, small business users no longer need to spend hours adding transaction data manually to benefit from a real-time view of their accounts. Instead, it is possible for them to automatically download bank statement data via automatic bank feeds.
As well as taking back financial control and keeping up-to-date with their invoicing, a move to online accounting will also improve the relationships small business owners and managers have with their accountants. With their financial data held securely in the cloud, the business owner can invite their accountant to view it at any time – even when they are on the road via their smartphones and tablets.
This interactive capability can also help with crucial processes such as finding a lender when new investment is required: something Kirsty Davies-Chinnock, managing director of the West Midlands-based firm Professional Polishing Services (PPS) discovered first-hand when working with Prime Chartered Accountants to apply for asset-based finance.
“Having sent us forms, the lender came to our business premises to run through our application,” she says. “They wanted to see details such as the current and previous years’ management accounts along with our own monthly accounts. Using Xero’s online accounting software we were able to show them all this information quickly and easily.
“Rather than having to interrupt the meeting and call the office, I was even able to answer some questions the lender asked while out at lunch, simply by logging on to the system on my iPhone.”
By using their smartphone or tablet as a kind of ‘pocket office’ and invoicing as soon as a job is complete, small businesses can use online accounts software to reduce debtor days and improve cash flow. In instances where billing occurs on a regular basis, it’s possible to automate the process so that the invoice automatically goes out on a set date and time, removing the risk it will be late or forgotten about altogether.
In all, the boom in function-rich cloud-based software presents a major opportunity for organisations of all sizes to improve business processes and ultimately, drive profitability – without blowing the budget.
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