More and more small and medium businesses are making the switch to cloud-based accounting and bookkeeping. Considering using software solutions from the likes of Xero, Free Agent, KashFlow and QuickBooks to handle a range of daily tasks, from credit control to payroll.
Usually the reason behind this decision, is a need to become more efficient and ultimately to stay competitive. There’s no denying that the automation cloud-based accounting provides can be game-changing. Historically, manual bookkeeping and accounting systems were incredibly time-consuming and prone to inaccuracies. Which of course impacted hard on the bottom-line.
That said however, not all technology, or businesses are created equal.
The key is to be certain a cloud-based accounting and bookkeeping approach is right for your business before you make the switch. Choose the right cloud-based accounting provider. Then make sure you have practical support on-hand to ensure a smooth transition.
Cloud-based accounting. 6 questions to ask yourself before you switch
- How prone is your current, manual system to errors and compliance risk? Do you spend too long checking for discrepancies, putting errors right or removing duplicated entries?
- Is collaboration important? Would your business benefit if individual staff could edit and real-time view financial data via their smart phone?
- Would you like to reduce overheads and the need for on-site storage? As well as hand over responsibility for system and compliance updates?
- Are you worried about the possibility of data loss and concerned about privacy access and confidentiality?
- Do you have a few separate systems running concurrently (perhaps payroll or a management tool)? Would your goal be to integrate them, for greater control and flexibility?
- Would your business benefit if overall efficiency and productivity was improved? Would having a real-time overview of your finances help you identify the profit in your business more easily?
If you answered ‘yes’ to any, or all, of these questions then a cloud-based accounting and bookkeeping approach could be right for your business.
Cloud-based accounting: How to make a smooth transition
- When migrating accounts from a manual spreadsheet or Sage the first question to consider is how much data should you transfer? At Oscar Fairchild we help business owners to consider their options:
- Migrate balances over at a single point in time
- Migrate all transactions for the current financial year; and
- Migrate all transactions in your record’s history.
Migrate balances over at a single point in time
This is a very simple approach, and from a tax and accounting point of view is wholly acceptable. It does mean though that historic data will remain in your old system. A problem if you’d like to run reports which look back to previous financial years.
You will also need to ensure that you choose a VAT quarter end month, or you might need to prepare a VAT return using two differing sets of accounting data.
Migrate all transactions for the current financial year
A very sensible approach is you are moving from manual spreadsheets to cloud-based accounting and booking, such as Xero. By migrating a full year of data, you save your accountant a whole lot of leg work (and save yourself money in fees) when the time comes to prepare your next end of year accounts.
At Oscar Fairchild our AAT qualified bookkeepers and accountants are practiced at helping clients make this migration. With streamlined systems and processes for ratifying and migrating balance sheets, sales invoices, purchase invoices, bank transactions and customer and supplier contact details.
All the transactions in your record’s history
This can be an incredibly time consuming and expensive option, and in truth we would only ever recommend it for very specific cases. Being realistic, it is unlikely that you will glean any real benefit from holding the data from historic tax years in your new cloud-based accounting system. Usually storing it, backed up, in the old system is sufficient for most of the businesses we work with.
Ready to make the switch to cloud-based accounting?
Cloud-based accounting: With Oscar Fairchild you can.
Throughout 2018 our #AskOscar campaign will seek to help business owners across London, Essex and Hertfordshire take-charge of bookkeeping.
With plenty of user friendly top tips & advice from our professional team of AAT qualified bookkeepers & accountants. As well as helpful case studies, showing how business owners across the South East have cracked the bookkeeping challenges that kept them awake at night.
Like ‘how do I switch to Xero?’, ‘how can I better analyse profit?’ and, ‘how can I improve cash flow continuity?’
The fact is, whatever your challenge and no matter how complex, with Oscar Fairchild you can.
About Oscar Fairchild:
Oscar Fairchild (incorporating Redwood Clarke since 01.09.18) is an Association of Accounting Technicians (AAT) qualified accountancy & bookkeeping practice with offices in The City of London and Billericay, Essex. Offering a wide range of services including Self-Assessment Services, Annual Returns, VAT Returns, Credit Control, Payroll, Auto Enrolment Pension and Management Account services to high growth businesses across London, Essex and Hertfordshire.