10 November 16

Cloud based accounting – do I really need this?

Donald Inglis

Firstly, what do we mean when we talk about cloud based accounting?

In its most simple form, a cloud based system is a book keeping package (some more advanced than others) that you pay for on a monthly basis. It is – in essence – hosted off site on another server. So, as modern technology takes us all closer to using cloud based accounting packages let’s take a look at the main pros and cons.

Advantages –

  • You can see your accounts at any time and in real time. Gone are the days of sending a back-up file to your accountant and waiting for them to do the work, and then send the file back to you before you can see the results. With so many different versions of the same software this can be time consuming and inconvenient.
  • All data is automatically backed up offsite and is physically detached from your premises. This provides peace of mind in the event of fire, flood etc.
  • When HMRC move forward with Making Tax Digital, you will be fully compliant.
  • You can take advantage of extra applications that will feed in data and save a lot of time – such as bank statements that upload automatically.
  • With cloud based software you can raise and email invoices as you go. This increase in productivity can make a massive difference and is ideally suited to business owners without regular office space.

Disadvantages –

  • The monthly charge ranges from £15 – £30. Compared with a simple desktop version for £150, the cloud based version soon becomes a more expensive option. As soon as you stop paying the service stops. On some packages you may even lose the right to access your data. This raises the question – who legally owns that data?
  • Whilst it may seem your data is more secure, there is no computer in the world that can’t be hacked. While you might think that the bigger software companies have stronger security against hacks, they may be more likely to be targeted by hackers purely because of the amount of data contained.
  • It relies on a decent broadband connection. This may be the case for the majority, but it is certainly not every business which has broadband.

In summary, while many of you are choosing to move towards online accountancy packages, some of you still prefer the security of data and low cost of a desktop version. If you are considering which cloud accountancy package to choose it is best to invest time into doing the groundwork and making the right decision. Changing your mind later can become a major hassle, so remember to consider the needs of your business as you follow your plan for growth and development.

There are some accountancy firms who brand themselves in line with particular software such as Xero, Quickbooks or Sage. But we have decided that the best computer package by far is the one that a client is happy with and actually uses – whether it’s shoebox, desktop or cloud based – get in touch on 01904 787973and we will be able to help.

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