Artificial intelligence (AI) and machine learning have been two major buzzwords of late. Progress in this field of technology will undoubtedly alter the world as we know it in decades to come. In this the field of accounting is no different.
Very real progress in the field of cloud accounting is already enabling business owners to do more, faster — enabling incredible jumps in growth and profitability potential. Cloud accounting refers to using cloud-based software to run the accounting function of a business.
This new approach is fast replacing the old desktop versions of accounting software. And for good reason! Here below are some of the advantages of using cloud accounting software in your business.
Live access to financial information
Probably the biggest advantage of cloud accounting software is its ability to link directly to your company’s bank feeds. By linking up with your bank, transactions are being pulled through from the bank straight into the accounting software.
This means no more uploading of bank statements, saving a lot of time. It also means live access to financial information. Because all bank transactions as well as all debtor and supplier invoices are captured within the cloud system, your financial info is always up to date.
Business owners and management can now monitor sales, cashflow, debtors, financial targets, payables and more at any time. This has never been possible before in the history of doing business. It will play a massive role in enabling entrepreneurs to make swift, quality decisions, leading to more effective businesses.
Work from any device from anywhere in the world
Cloud accounting is enabling the vagabond lifestyle. Owners of fully digitised companies are able to work from anywhere in the world, making extended travel much easier. Co-working and co-living spaces like Roam are a testament to this trend.
Cloud accounting plays a huge role in enabling this doing-business- from-anywhere life. No longer bound to a specific computer at the office, it allows you to log in from any device with an internet connection anywhere in the world. This is the kind of stuff that Tim Ferriss (author of the 4–Hour Workweek) loves!
Beautiful, fast reporting and analytics
With access to live financial information, producing great management reports can be as simple as pushing a button if set up correctly.
The leading cloud systems have strong reporting tools that can generate graphs, variance reports, key metrics and many more financial snapshots to form a financial dashboard for your company. Beautifully presented, these reports and dashboards give even the least financially savvy director and edge when it comes to being on top of company finance.
Direct link to your advisor or accountant
Having a trusted advisor as part of managing company finance is key. With functions that allows you to invite your advisors and accountant to access your company’s cloud accounting profile, both you and your team of professionals will now have a full live view of company finance in order to give the best possible strategic direction to the business.
This is the most exciting growth area of cloud accounting software. It is able to recognise recurring transactions in order to auto-allocate them.
Learning from millions of accounts being processed all over the world, the software is also able to allocate transactions into their correct accounts. After just a few months of using it, your actual manual allocations should amount to be less than 20% of all transactions.
As this function increases in strength, bookkeeping work will diminish. Entrepreneurs will be able to focus on doing business, not recording it. Accountants will be able to focus on value adds and advisory instead of capturing transactions.
Xero makes for a great study of how this is affecting the industry. The company is a New Zealand based accounting software technology firm that is taking over the world. Plugged into entrepreneurial ecosystems worldwide, they are currently the leading solution for SMEs in the marketplace.
Their offering embodies all of the above advantages of cloud accounting and more. I’d recommend them to any entrepreneurs who wish to streamline their company’s accounting function.
The future is now. AI will shape many parts of our lives in years to come. Entrepreneurs can either fear these changes or embrace them. Automate and digitise your company’s financial function using the latest cloud technology. The time saved and insights gained will pay off handsomely.