Let’s face it, handling the books is hardly the most enjoyable part of running any small business. Regardless, it’s one of those things that just has to be done if we’re to keep on operating. Without incurring the wrath of the tax man!
Up until fairly recently, our accounting options have been fairly limited. We could knuckle down and spend countless frustrating hours tracking payments, chasing invoices and figuring out the VAT ourselves. Often we’re armed with little more than a confusing and frustrating piece of software. Or at the very worst, with a calculator and a stack of documents. Alternatively, we could always pay a tidy sum to an accountant. They would do it, but they would also take a sizeable bite out of our profits in the process.
Thankfully, with the dawn of always-on broadband Internet and a boom in the number of software startups hoping to make all of our lives that much easier, there is a third option for tradesmen needing a simple, cost-effective accounting solution.
It’s called cloud accounting, and for many small business owners, it’s the answer to many of our prayers.
What exactly is cloud accounting?
If you’re not yet familiar with cloud accounting, or with the larger world of cloud computing in general, don’t worry. As more and more businesses move towards this way of working in the months and years ahead, you’ll be hearing about it a lot more.
In fact, an article published earlier this year by Forbes Magazine suggested that by the end of 2014, businesses in the United States alone will be spend a staggering $13 billion (almost £8 billion) on cloud computing solutions. That figure, according to the same report, could rocket to as much as $180 billion (just over £100 billion) by the close 0f 2015.
With such huge amounts being invested in ‘The Cloud,’ it must really have something to offer, right? But what exactly is it? More specifically, how can it help tradesmen with their accounting?
In a nutshell, cloud accounting means that the financial information you’d normally keep on your own computer’s hard drive, and the software you’d use to manage it, is actually stored on a secure server located somewhere off site.
You access all this simply by going online and using a cloud accounting package which, in most cases, provides a much simpler way to manage the books than most of the software that you have to run on your own computer.
How cloud accounting can improve your business
The benefits of this approach to accounting are probably as many and varied as there are services out there to help you do it. That being said, let’s focus on some of the main benefits to tradesmen like you.
Though some may consider the idea of hosting everything on a third-party’s server to be a one of the negative aspects of cloud accounting, in many ways it actually offers you greater levels of security.
Those in charge of the service you understand the importance of your keeping your accounts safe, and put strict measures in place to ensure it stays that way. This includes creating daily backups, so that even if the worst should happen, you’ll be able to pick up where you left off in no time.
Having an outside source with their own cloud security professionals looking after everything for you normally proves a much safer option than running everything from a home or office computer where security and data backup all falls to you.
If you’ve ever tried to forgo the expense of hiring an accountant and managing everything else yourself through one of the many software packages available, you may have been put off by just how tricky, not to mention time-consuming, they can be.
This isn’t something you’ll have to worry about when you manage your accounts in the cloud. Along with a simple-to-use interface, most packages come with a range of solutions to make your life much easier.
From connecting your bank account direct to your cloud provider, you’ll save all the time and hassle of processing individual payments and outgoings through your accounts. Then there’s the paperwork -or rather, lack of it- to consider. With everything done online, and helpful tools available to quickly scan in documents if you need to, you eliminate the need to keep those unmanageable reams of invoices and receipts on your desk.
Working out your profits doesn’t have to mean spending a good percentage of them on accountancy work. A good cloud solution can actually save you money in a couple of ways.
With everything now much easier to manage, you could do everything yourself much quicker, and with much less stress, than you could before, meaning you don’t have to pay an expensive accountant if you don’t wish to.
Then there’s the cost of the actual package to think about. On the whole, this normally works out much cheaper than buying a piece of software that you run on your computer.
For one thing, there’s no heavy initial investment. You simply pay by the month for only the services you need. For another, you won’t have to spend huge sums buying upgrades and whole new packages when your software becomes old and outdated. Your cloud accounting provider will keep everything updated for you at no extra cost.
Work anywhere at any time
Even if you do decide to hire an accountant, there’s no longer any real reason that they have to come into your office to work for you. They can do it from their own base, which should save you even more money.
And if you decide to do it yourself? You can access your accounts anywhere that you have an internet connection, any time, and on any device, meaning no long hours spent stuck in the office.
We’re spoiled for choice when it comes to cloud accountancy packages. We’d like to save you some time in pouring through the countless options available. So here is our overview of some of the leading providers.
Xero is has offices in the United States, the United Kingdom, Australia and New Zealand. They already serve around 300,000 businesses across the globe. They have packages starting from just £9 per month with speedy bank reconciliation and a wealth of other features. It’s already regarded as one of the top cloud accounting solutions on the market.
Quickbooks rivals Xero in terms of pricing. At time of writing, services began at just over £7 per month for small businesses. Features include seamless payroll integration, custom invoicing and a service allowing you to accept credit and debit card payments on the go. Powered by software company Intuit and based in the United States, Canada, the UK, India and other locations, they’re another strong contender.
Based in both India and the UK, Kashflow boats ‘tens of thousands’ of users. They enjoy features such as automation for repeated purchases, quote and estimate solutions and a powerful credit control function to help you keep track of outstanding invoices. Basic packages come in at just £5 per month for sole traders and small business owners.
FreeAgent places itself as a solution for freelancers and other sole traders. Over 35,000 of them currently use cloud accounting solutions which start at £15 per month for its sole-trader package. Located in Edinburgh, the company offers a simple and stylish dashboard. They give you a quick overview of all your finances, and, wait for it… They will even take the hard work out of doing your self-assessment tax return.
Another solution specifically targeting freelance professionals and businesses with less than nine employees is Toronto, Canada-based Wave. The team have so far tracked around 315,000 accounts. They predict that they’ve saved small business owners a total of 15 million minutes in time spent on accounting. Getting a basic package from Wave is even free of charge.
Making the most of the cloud
One thing we really like cloud accounting is that we can do so much more with it than simply balance the books. Xero for example, supports an impressive 300 third-party applications designed to make managing your business that much easier. You want tools like Workever’s own field service management app and a host of others cutting down on your admin. They cut down on duplicate data and other drains on your time and resource too. So, the cloud really does offer an ideal solution for tradesmen and small business owners.
Workever is a real-time management solution for Field Service & Service Management businesses. Whether you have a small mobile team of five field workers or a large enterprise with hundreds of field staff, Workever field service management software makes your job simple.
Increase productivity, reduce paperwork and save admin time with our easy to use field service software for both the office and your fieldworkers. Why not sign-up for a free trial today?