Google “Cloud Accounting” and you’ll likely get a list of articles, apps and consultants promising a better life with a switch to the cloud: save time, save money, make your business better – it’s essentially the best invention since the abacus.
The fact is a switch to the cloud isn’t always better. The automobile was faster than the bicycle but even today, not everybody needs a car. Sure cloud accounting has a variety of benefits and is in many cases a great solution – however, it’s only a great solution if you know what your problem is.
Transitioning to cloud accounting software may mean additional resources from your client and higher costs in the short run as they learn and adjust to new processes.
Yet if you’ve correctly identified your pain points and determined which cloud accounting package can help, the value of the switch will be apparent.
While each business will have its own unique needs and pain points, there are a number of common issues which business owners face and which can generally be addressed effectively with the right cloud accounting software. Consider these points when recommending cloud accounting software to your clients:
In the desktop world, data is generally stationed on one computer accessible to a single user (let’s leave out hosted desktop solutions for now). When collaborating with a team, they won’t know what’s going on either until someone shares the data with them.
Lack of transparency can lead to poor decisions. If they don’t have access to their numbers, they’re less likely to use them when planning ahead and may rely on inaccurate measures like a bank balance to assess how the business is doing.
Cloud accounting software can then be a valuable tool to increase engagement with the books and ultimately lead to better decision-making.
In many cases accounting is associated with retroactive data. They’ll complete their bookkeeping a few weeks or even months (we won’t go into the annual shoebox approach) after the period has finished. That means whatever data they’re looking at will be outdated. If they’re looking to base business decisions such as hiring and pricing on your data, doing so on numbers that are 3 months old won’t be that useful.
When used effectively, cloud accounting features such as online bank feeds or data extraction from receipts can enable real time reporting. They can then engage you, their advisor, in discussions on data that should be much more valuable.
They may already be using software for tracking customer contacts, project management, issuing proposals, managing leads, managing payroll, or running an e-commerce store. However, if the software doesn’t communicate with the accounting software, you may experience transparency or relevance issues, or be doing a lot more work.
Before going on an integration binge, it’s important to know just how the accounting software integrates with the other tools they’re using. What data is brought over and how does that benefit you?
For example, if you’ve got a service-based business client who’s using an invoicing app to manage their sales process, having your revenues automatically brought over to a backend accounting system on a daily basis can be hugely valuable. On the other hand, having all the individual customer details imported may be an extra headache and waste of time if you’ve got an overwhelmingly large number of transactions.
A switch to the cloud isn’t always as easy as flipping a switch. However, through identifying the data that’s important and the processes that you’d like your clients to streamline in their business, the right cloud accounting software should create productive benefits and a lot of value.
About the author
A graduate of the Richard Ivey School of Business in Canada, Josh Zweig, CPA, CA has a passion for entrepreneurship. His experience with a “Big 4” accounting firm and several years in public practice as a CPA have allowed him to work closely with many business owners across a wide variety of industries. Josh went on to co-found LiveCA LLP, Canada’s first online accounting firm that focuses on transitioning businesses to cloud based solutions.
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