At CloudCo we specialise in online accounting services, such as Xero and our own professional cloud-based accounting software.
Cloud accounting offers many benefits over traditional accounting software. Accessible online anytime and anywhere, cloud-based systems are much more efficient and provide a secure and efficient way to store, access and protect your bookkeeping accounts data.
As this online accounting software runs on a cloud-provider’s platform rather than on your personal hard drive or servers, you are guaranteed to always have the most up to date version of the software, can rest easy knowing your data is safe, and can benefit from quick and timely updates.
What is cloud based accounting software?
Cloud based accounting systems, unlike traditional desktop versions of bookkeeping and accounting software, enables you (or designated third parties) to access your financial information, data and software from anywhere at any time. So long as you have access to a secure wi-fi connection, you can use any device – desktop, laptop, tablet or smartphone – to access your financial data.
The software on the cloud encompasses basic bookkeeping and accounting tasks plus more complex compliance tasks. Encrypted and stored on the cloud, the data you upload will be accessible not only to you but also colleagues, your bookkeeper or accountant too.
Cloud-based online accounting systems are the most efficient way for small business owners, sole traders and contractors to manage their books and accounts. From one platform, you can upload data, track cash flow, connect your bank statements, invoice instantly and file digital tax returns and real-time information to HMRC.
Why is cloud accounting software important for an accountant?
Making Tax Digital
On the compliance side, accountants are happier if their non-incorporated (sole trader and contractor clients) are getting prepared now for making tax digital for Income Tax Self-Assessment (MTD for ITSA). From April 2024, every incorporated and non-incorporated business (e.g. sole traders, contractors and landlords) will need to be MTD for ITSA-ready.
On the practical level under MTD for ITSA, you must keep digital records and use third-party software to submit your tax returns to HM Revenue and Customs (HMRC). This means that you will need to go some way towards digital bookkeeping and accounting in order to be able to file your accounts digitally with HMRC on a quarterly basis.
But apart from this compliance issue, with the clear overview an accountant will gain from having access to your income and expenditure (books and accounts) in real time, they will be able to provide you with management accounts, or any type of report for references and can efficiently provide tax planning advice. Quite complex requests for finance reports that would have taken many hours before can now often be summoned up at the press of a button.
In other words, cloud technology has revolutionised how accountants work with their clients. To collaborate online in real time is much more efficient than delivering piles of receipts and bank statements in the eleventh hour before the filing deadline.
The reason this is important for an accountant is two-fold. First, it is more efficient, saves a lot of time, is more cost-effective – for you and your accountant – and frees up accounting professionals to do what they are trained to do i.e./take more of an advisory role to help you manage your accounts to benefit your business.
Secondly, with both you and your accountant having access to the same information, you, the client, are empowered. While this gives you a better hold over your business finances; for your accountant, it means that they are not having to endlessly chase you for information in order to do their job. Most importantly, however, it means that you can meet statutory deadlines such as self-assessment, final annual accounts, payroll or VAT.
Inventory management and automation
Subscribing to an online software solution for your bookkeeping and accounting also allows you to set it up so that your online banking transactions flow automatically from your bank account to your books. With this, your accountant has information in real time about your revenue and expenditure.
The cloud accounting software will also manage your invoicing, just as it can manage your purchase orders, so that you, your colleagues, accountant and/or bookkeeper will also be able to reconcile your bank statements against your invoices. Expenses receipts or purchase orders automatically posted to your books, like all other transactions you upload or connect with the cloud, will automatically be posted to the correct digital ledger.
Automating these basic functions so that they connect with more complex compliance functions (like financial planning or tax planning and budgeting, inventory and order management) and connecting these with modules designed to manage different aspects of your business (e.g. your CRM system), culminates in a really efficient way of accounting for a growing business.
What are the benefits of cloud accounting?
Cloud accounting comes with so many benefits, this list limits itself to just ten of them:
- Accessible: You can access your files from anywhere at any time, provided you have a secure internet connection.
- Adaptable: The cloud accounting system can be adapted to suit the nature of the business; e.g. you can set up your own dashboard to show information about invoices outstanding, bills that are due, or cash-flow forecasts.
- Avoids human error: Human error is cut considerably when data such as financial and customer details is inputted only once and is shared across the system.
- Efficient: At the touch of a button, you can automatically share data across the whole system and make efficient use of all the information your organisation holds (e.g. with HR or your CRM system).
- Enabling: At the touch of a button, you, your bookkeeper or accountant will be able to carry out e.g. financial, tax, and dividend planning and budgeting, payroll, produce any type of financial report, estimate the value of your inventory, the cost of payroll, what you owe in VAT, etc.
- Immediate: real time analytics allow you to see your current financial position at any time as your cloud based software updates continually.
- Integrated: Increased efficiency and essential business functions are shared across all the appropriate ledgers and, once connected with your company bank account, all transactions will automatically post to the correct digital ledger.
- Security: The cloud is very secure, as all the data is encrypted, and only you and your designated third-party representatives will be able to access your data.
- Sharable: Designated third parties can also access your files in real-time just like you. You can also restrict multi user access to sensitive information, designating what data certain third-party members can view.
- Transparent: receipts, purchase orders, bank statements, invoices, all processes managed in one place and immediately available for scrutiny if required. You will be MTD-ITSA ready!
What are the benefits of using Xero?
The benefits of using Xero include all the benefits described above, but just for fun we have added five more:
- Security cannot be stressed enough: Xero is one of the most secure ways to store information and access data (provided you have a secure internet connection).
- Xero will save your business time and money.
- Xero updates and can be developed and delivered faster and more easily than any desktop accounting software.
- With Xero, no matter where in the world you are, you can be confident that you have an up-to-date picture of how your business is doing.
- You can control the level of access third-party users have to your data.
The benefits of using Xero are endless, once you give it a try, you’ll agree.
Is Xero hard to learn?
Xero cloud accounting software is intuitive and designed to be easy to use by those who understand near-zero about accounts, as well as by accountants who know just about all there is to know.
No one needs to spend more than a few hours learning the basic functions. Then, with a bit of practice, you’ll quickly learn to understand the functions you need to do your bookkeeping. For practice, or to carry out a specific task, Xero has a training portal where you can take courses or choose learning programs to understand the cloud software.
How long does it take to learn Xero?
Xero cloud accounting has made difficult tasks easier, so for the average user, creating sales invoices and logging purchase invoices will be easily mastered. The Xero tuition bundles are mainly focused on the key tasks that users are likely going to need to perform. It takes around six hours to learn Xero’s basic functions.
How much does Xero training cost?
There are free online courses that cover the basic functions of Xero, but you can learn more for as little as £499 or on a free interest-free payment plan for as little as £25 per month.
CloudCo are Xero certified accountants
CloudCo and the Xero cloud accounting system are a perfect match.
The Xero cloud based accounting system handles tasks that used to take up a lot of time. Whether our clients do their books themselves or we do it for them, it’s a win-win. We all save loads of time (and, therefore, money).
Xero can efficiently and accurately manage all financial data, while CloudCo professionals will look after your bookkeeping, accounts, payroll, VAT, your tax filing, and even your invoicing.
While Xero cloud accounting is much more than just smart bookkeeping software, with CloudCo its quite limited tax features become super powerful. With CloudCo as your accountant, you will quickly see and feel the difference of cloud accounting.
Accuracy in bookkeeping and accounts (compliance) is essential: You could get fined or even prosecuted if your books and accounts are not accurate. With software like Xero and accountants like CloudCo, you never need worry about the accuracy of your books or your accounts again.