Expert Opinion: Automation in accounting and data driven decisions

Laura Duggan, Partner at professional services firm Azets, discusses the benefits of cloud accounting technology in viewing data as a business partner and key to driving business performance.

To grow a business, business leaders need to understand where they are now, have the ability to review their business and use that information and reliable data to plot their plans for growth.

Growth can only be measured by having robust data to help you understand how far you have come or may still have to go to reach your goals.

SME business owners, with the latest technology, can access anywhere, anytime data about their business to give an overview and real time insight into business performance.

With real time access to data, business owners don’t need to wait weeks, months or until year end to know how their business is performing. With up to date data available, this allows business owners to be proactive and adapt any plans to the business plan or strategy.

What is cloud accounting?

Cloud accounting, sometimes referred to as online accounting, works in a similar way to desktop accounting software that has been available for over a decade. The main difference between cloud and desktop packages is that, instead of installing the software on your computer, cloud packages run on remote, secure servers which are accessed using the internet.

Data is securely stored on the cloud, giving you instant access to real time information regarding your accounts which can be accessed and worked on from any location in the world with an internet connection, via any device.

The benefits

Time Saving

Cloud accounting brings new working practices aimed at reducing the time associated with data inputting, giving business leaders more time to focus on growing the business. Most cloud accounting solutions include features such as bank feeds that automate postings into the software from entries on your electronic bank statements and the ability to upload scanned images of receipts and supplier invoices.

There are also a number of innovative add-ons available, such as Dext, which converts key information from receipts and invoices into data that is automatically posted into your software.

Flexibility

Multiple users can login to cloud accounting software at the same time, from different locations, providing they have a working internet connection. The ease of access provided by cloud accounting software is an extremely valuable feature allowing both you and your advisor to see the same information at any point in time.

More informed decision-making

Cloud accounting software gives you time to focus on your business, wherever you may be. You can be confident that you have an up-to-date picture of your financial data – allowing you to make more informed decisions about your business operations.

Enhanced data security

Cloud accounting is more secure than traditional accounting methods as there is no requirement to transfer data between your business and your accountant and business advisor. Most cloud accounting providers take great measures to ensure your data is safe, including backup power supplies, firewalls, data encryption software and regular, third-party security audits. Furthermore, the online software provides an improved, more efficient service, with speedy processing of data.

Ease of use

Depending on the software, the data transfer to a cloud accounting solution can be automated and your accountant of software provider can deliver training on how to use your new software and reap the benefits from it as quickly as possible.

Requires minimal IT support

Your cloud service provider will do much of the required IT maintenance, such as the backing up of your data and installing software updates. This in turn reduces the need for on premise servers, infrastructure updates and internal IT support.

Compliance

There’s often a barrage of regulation facing SMEs. Demystifying is absolutely key – meaning putting in place processes to simplify procedures and ensure easier management. Cloud accounting software can help ensure compliance with regulation such as Making Tax Digital (MTD) as we move along the timeline.

Regulation also usually involves deadlines and the repercussions for the likes of late VAT returns can lead to fines of up to 100% of the value of the VAT. Once in the penalty regime, it can take a year to get back out of it. The simplification of regulatory requirements through the use of technology can ensure deadlines are not missed and therefore no financial penalties to the business.

Outsourcing

Using a cloud-based system means your accountant can take on time-consuming book-keeping, accounting and payroll duties.