How cloud accounting apps enhance business performance?
Cloud Software Apps
The 21st century is witness to one of the major breakthroughs in business technology, Cloud software. Cloud accounting has revolutionized how the financial world works, the complete accounting ecosystem is now able to provide powerful tools to small businesses, previously only available to enterprises. The add-on apps allow for a business to grow its accounting system as the business needs to develop.
Our in-depth review looks at answering the following questions:
- What is cloud accounting?
- Is cloud accounting going to eventually replace traditional accounting practices?
- Does clouding accounting software with addons provide value to your business?
What do you need to know about cloud accounting?
Cloud accounting software shares characteristics with traditional accounting software but instead of depending on hardware and complex settings it functions on a remote server and follows a SaaS Business model.
The modern cloud storage system does not depend on a computer’s internal memory, but instead, the data storage is heavily dependent on the internet. In simple terms, the valuable business information which accountants used to store on the computer’s hard drive is now available on a remote server that is always connected to the internet. The latest system has enabled users to access software applications and their business data regardless of the time-zone and geography.
Related: Gain more confidence in your decision to employ cloud accounting software for your business by reading about the benefits of cloud accounting in detail.
Cloud accounting vs traditional accounting software
Cloud accounting differs significantly from traditional accounting software in terms of its accessibility, features, cost, real-time information availability, safety and probability of errors:
|In terms of||Cloud accounting software||Traditional accounting software|
|Accessibility||Data is accessible anywhere and anytime||Data is only accessible on the computer premises|
|Features||Automated features that automatically update the financial information||The user is responsible for updating the business information manually|
|Real-time data availability||Anyone authorised can access real-time data||Access to real-time information is limited to a location-based access|
|Cost||No money required to install or update the software, you just have to pay for a monthly subscription||Expensive to install, maintain and update on desktops|
|Level of security||Highly encrypted data storage on the cloud with multiple server backups||Data is not encrypted and backups have to be performed manually|
|Probability of errors||Low||High|
What are cloud accounting apps?
An app for cloud accounting software is an app built by a third party which can integrate itself with the cloud accounting software to provide extra features helping to boost efficiency and increase the overall performance of the system.
The soaring popularity of cloud accounting systems are due to their scalability, the eco-system of these software’s are built to provide businesses of all types the ability to customise the software based on their needs. e.g. a retail business can use tools such as vend, deputy and figaro to connect their POS, schedule employees work, pay them based on hours worked, manage inventory and create beautiful reporting to measure business performance, all the while retaining complete interconnectivity and collaboration with the accounting software.
Cloud accounting add-ons can automate a wide array of tasks such as inventory control, invoicing, financial management, staff management, payroll processes and other financial affairs. You can also integrate these add-ons according to their specific functionality, say for payment services; you might employ Swipe or PayPal in your business accounting system, something that would have required developers, consultants, specialists and hours of work. As an example Link4 is an add-on for invoicing that automatically sends the invoices from your accounting system to the ones used by your vendors or clients, removing the need for any manual entry.
There is a long list of add-ons that have been developed to perform specific finance or industry-based functions for your business. If you want to implement such add-ons effectively try speaking to a nearby accounting firm.
To give you an idea about what’s available, we have summarised below the top add-ons being used in the market:
Top 9 cloud accounting add-ons and their functions:
Here are nine clouding accounting add-ons that might help in adding value to your accounting system.
- Receipt Bank: If you are looking to automate your bookkeeping then receipt bank is one of the market leaders. Businesses can start using this app from £ 10 per month.
- ServiceM8: A smart job management tool to help tradesmen with job management. Price for a starter package starts at $29 per month.
- AutoEntry: Suitable for almost every type of business, AutoEntry automates data entry by gathering information from invoices, bills and receipts and automatically delivering the data to your accounting system. Pricing is credits based and starts from £ 9 per month.
- Dear Inventory: An effective inventory management software, a complete point to point inventory management software with the features of an enterprise ERP. Pricing starts at $ 200 per month.
- Vend: One of the UK’s leading ePOS. You can use this app to sell, manage and report on your sales. Pricing for this app starts at £ 59 per month.
- ezyCollect: ezyCollect, with its automated features, can make the process of payment collection much more manageable by sending payment reminder messages to customers through multiple channels like SMS and email. Pricing depends on which accounting software you use.
- GoCardless: GoCardless for Xero is a dedicated app that connects with Xero and allows small businesses to automate payment collection and also reconciliation for their Xero invoices through Direct Debit.
- iZettle: iZettle Xero integration is a perfect match for your retail business. Through this easy and smooth integration, a business can digitalise their payment method and enjoy the luxury of automatically recording its sales and payments data in its Xero account of choice.
- Approvalmax: ApprovalMax integration with Xero provides fully automated approval workflows for various financial documents and permits individuals, who are not required to access the accounting software, to raise and purchase out of the Xero.
How cloud accounting coupled with software add-ons can help with organizational reporting?
With the ease with which data is stored using automation add-ons in accounting softwares and no limits on data storage capacity, reporting apps have become more prominent to help manage the effective use of this data. Apps like futrli or spotlight reporting can help you report on past numbers using beautiful visuals, cashflow forecasting apps can be used for future cash projections, tools such as klipfolio can help you create amazingly insightful dashboards. If you have your accounting system setup properly the opportunities for reporting are endless.
How can cloud accounting apps help you save money?
Standalone softwares required to account for missing features in cloud accounting softwares could cost quite a bit. Their integrations, management and development would increase the costs even further. Third-party apps with built-in API’s and easy to manage customisations can help even small business owners buy and implement these at a short notice and without requiring technical skills.
If you run a startup business and are using cloud accounting software for the first time, you might require the assistance of an expert. We advise you to speak to an accountant to help you set your software to provide maximum value.
Related: Learn more about different accounting software by going through the list of the best accounting software curated by our in-house accountants.
Clear House Accountants are highly experienced Accountants in London. Our Accounting Firm employs the best accountants so as to add maximum value to our client’s businesses with smart solutions and intuitive tools.
Jinesh is a Senior Business Accountant, with a masters in Finance from Westminster University, and specializes in tax and accounting for small to medium businesses with a turnover less than £ 3 Million.
He specialises in helping creative businesses understand and manage their accounting and tax needs and obligations.
As accounting ecosystems evolve, their potential to add value also grows. This has increased the focus on digital solutions to tackle complex business problems. Jinesh helps businesses see the opportunity in this and helps businesses become more efficient and increase performance, using the right solutions.
Some of the key things he focuses on are:
- Helping businesses gain insights from their business data
- Providing complex tax and accounting solutions
- Helping businesses prepare for complex industry developments and changes