Every start-up, or even a division within a company that has an idea for something new, should be figuring out how to use cloud computing in its plan.” – Brad Jefferson, Animoto CEO
Introduction
Accounting has shrugged off its reputation for being boring. It’s getting more exciting as technology and software become increasingly sophisticated. Cloud-based accounting software is particularly indispensable with advanced tools that streamline workflows, for greater accuracy and efficiency.
Let’s look at the effect cloud-based accounting software is going to have on the industry this year, as well as exciting trends to look out for in 2024.
What is Cloud-based Accounting Software?
Cloud-based accounting software takes the features and functions of desktop software, ramps them up, and makes them available online. It reduces human error and employees can access the system remotely from anywhere with a Wi-Fi connection.
Cloud-based software is also flexible and scalable. It grows when you do and you can add or remove functions as your business evolves.
Features include:
Business Account Management
The software manages all the usual functions, like accounts payable and receivable and can generate reports on expenditure, revenue, assets, etc.
Bills and Invoices
Billing and invoicing are accounting firms’ bread and butter. Advanced accounting software generates invoices and bills according to customized templates. This is a massive time-saver and reduces human error.
Sales and Profit
The software comes with tracking systems that monitor invoices, bills, and payments, so you always know the business’s financial health.
Inventory Management
Inventory management is crucial. You don’t want dangerously low stock levels or to keep ordering stock you don’t need. Accounting software controls the situation as it sends alerts when it’s time to reorder stock.
Find out more about the benefits Sage Software has for Inventory Management
Tax Submission
If there is one area where you need accuracy it’s tax. Cloud-based accounting software simplifies tax administration, reducing the risk of penalties and fees. Moreover, the tax feature enables you to pay VAT returns directly to HMRC.
Performance Overview
With all the data stored in the system, accounting software enables you to compare your current performance to previous years. You can use the data to create new budgets or make informed business decisions.
What factors to consider when choosing Cloud-based accounting software in 2024
You must think about what you need from accounting software before you buy any products. Involve employees who must work with the software to find out the exact features and functions needed.
4 Factors Affect Functions
1) Setup and Ongoing Costs
Setup involves integration with existing systems; is it compatible with what you’ve got? Can it be adapted and how much will it cost?
Buy the best that you can afford. Good, slightly more expensive software, might save you costs in the long run because they have fewer bugs and patches.
Find out if ongoing support is included in the package or if it’s an additional cost.
2) Usability and Scalability
You want intuitive, user-friendly software so employees can access data and functions without effort.
Software scalability is important. It must adapt to the business’s circumstances. If you grow, can the software seamlessly add new users and make other changes (payroll) to accommodate growth?
Conversely, you might narrow your focus and require fewer employees. The software must scale down accordingly.
3) Key Features
This relates to the employee input mentioned above. For instance, the software can automatically send invoices, but how easy is it to generate invoices in the first place?
It’s not just about function, it’s also about functionality.
4) Reviews
Reviews help you make the final decision. Visit review websites, like TrustPilot and Capterra to see what people have to say. Remember to look at the number of reviews. A 5-star rating doesn’t mean much if it’s only been reviewed by three people.
Benefits of Cloud-based Accounting Software in 2024
Small businesses, while successful, might not find a full-time accountant or outsourcing accounting functions financially feasible. The beauty of cloud-based accounting software is that you don’t need to be an accountant to manage your finances.
Here are the key benefits of using accounting software in 2024
Bank Reconciliation
It’s a straightforward process for virtually all accounting firms, but software can analyze and compare data to see if there are any discrepancies and resolve them if necessary.
Financial Reporting
Sophisticated software generates financial reports, including balance sheets and cash flow statements. Reports can be generated for a particular period, for example, five days or 10 months.
Time Savings
There’s no waiting for reports from a hard-working professional accountant. Instead, you can use all the software tools and functions available to get the work done in a fraction of the time.
Automated Record Keeping
Cloud-based accounting software automatically logs new transactions to ensure financial data and record-keeping comply with federal, state, and industry regulations.
Reliable Accuracy
People make mistakes, but mistakes aren’t great for accounting records where an error means the difference between a tax rebate and tax penalties. Advanced accounting software virtually eliminates human error and almost guarantees complete accuracy – no typos!
One Platform – Multiple Tasks
A single platform that enables you to record, access, and use data is far easier to manage than a disjointed or fractured accounting system. It’s much easier to manage your financial functions on a central hub.
Optimized Payroll
Accounting software can take on payroll responsibilities, ensuring greater accuracy when it comes to benefits and taxes for employees at every level of the payroll.
Conclusion
Accounting and software development have advanced in leaps and bounds over the past few years. By all accounts, 2024 will keep up the good work, delivering ever-greater benefits.
Accounting firms should keep an eye on cloud-based accounting software; there could be interesting developments ahead.
Meanwhile, accountants enjoy software that streamlines tasks, generates reports, automates systems, and does a good job empowering small businesses to keep their finances in order.
To read about the Lescault and Walderman accounting team, click here.
For more help on key topics facing all businesses read the below articles to gain in-depth insights into business challenges and solutions with a proactive approach.
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Balancing Automation And Outsourcing For Success In Accounting
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