We’ve recently been looking into Cloud Based Accounting for our business, and I thought I would share some of what I’ve learned so far as I’ve started to research which among the many choices out there we should consider.

This is a very brief overview of cloud accounting, also known as online accounting, or in some circumstances SaaS (software as a service) accounting software.

What is cloud software?

Cloud accounting software at its most basic level is on demand accounting software, so (as long as you have the right internet browser) and an internet connection you can access the software and your company’s financial data from anywhere in the world through a number of devices. Your data is held either on several servers hosted by the software provider in house, or on a third party’s server – for example, Amazon. This is a very basic description, but the main things you should be concerned with are the security of the servers and what happens if something goes wrong (how quickly will things be back up and running?).

Benefits

Access it anywhere:
So the above idea of not being tied to one computer is one of the clear benefits of using cloud accounting software over desktop based accounting software. Not being tied to one location or PC means that you and your work colleagues can access your financial data anywhere in the world (internet connection required!). In the case of a small sized business, if it has an accountant that completes the end of year financial returns then they no longer have to come and visit the company on site; saving the business money in accountant’s fees.

Subscription based:
Another small or medium sized business benefit here, the fact that cloud accounting tends to be subscription based means that it can scale with your company. A small company with few transactions may even find a free package, then (hopefully) as the company grows this can be upgraded through a few clicks of a button. The fact that there is no installing of software or on site data storage also means that you don’t have a horrendous up front bill to pay. Very nice.

Upgrades on the go:
Speaking with accountants you find that one of the really annoying things about old school (desktop) accounting software is the fact that if a client did not have the same software as you then you would have to explain how they can export the software and then send it to you. This time consuming process has been banished as cloud accounting software (depending on the provider) can be upgraded on the fly. The twofold benefit of constant upgrades being that new features will constantly keep coming available and you the customer have the ability to help shape the software’s development. There should be no additional cost for this process. The competitive nature of the cloud accounting market means that software providers need to keep on their toes, if a competitor has a feature you want (like a PayPal import) then leave and go to them.

There are other benefits and drawbacks to cloud accounting software, but this gives you an idea of a general place to start!

Providers:

When choosing cloud accounting software, always make sure the provider allows you at least a 30 day trial. During this period you can then try out several software systems and find which is the most intuitive for you to use or has the features that you need.

The market place is growing rapidly with new providers springing up every day. Below are some of them that are worth a try:

  • Xero New Zealand based $18 – $37
  • Quickbooks Online $10 – $35
  • Clear Books UK Based between $7 – $23