Whether you are a small business owner, or you are self-employed, embracing cloud accounting and technology could help your business transform and succeed. Here are five ways this can happen.
- Avoid paperwork and errors
- Proactive tax management and planning
- Cash flow management: getting paid faster
- Highly secure, MTD ready, and GDPR Compliant
Having to manage multiple data sources in manual format, from bank statements, receipts, and invoices – as well as handling spreadsheets – if often a difficult way to get a true and accurate reading on business performance. Time is wasted in manually entering data, causing frustration and distraction from your day-to-day work. To make it easy, with cloud accounting, start by connecting your bank feed and then raise all invoices and expenses from within the cloud accounting software. This can automatically match bank transactions with invoices and expenses.
Many businesses are hit with the shock of their quarterly VAT or annul tax bills. In some cases, having not budgeted for the right amount can have a substantial cash flow impact. By using cloud accounting, VAT and tax is calculated in real time, providing an up-to-date view of liability and helping you to manage cash proactively and to establish a VAT-control account. Budgeting throughout the year thus lets you avoid the tax end-payment shock. Cloud accounting also allows you to connect live with your accountant or book-keeper, so they can provide proactive tax advice in real-time.
A clear and up-to-date picture of your current financial position, means that you can be confident about how your business is doing and enable you to work out which type of customer is the best (and most profitable) for you to target.
Cloud accounting can track unpaid invoices, flagging up where there is aged debt for any outstanding invoices. Creating invoices is easy online or via your mobile, and it can include payment solutions through which to get paid. Thus avoiding lengthy and unnecessary payment terms. Most of the cloud offerings have integrated payment gateways, making it easy to take payment from your customers.
It is easy to get started by downloading the cloud to your phone. Take, for example, QuickBooks Online and QuickBooks Self-Employed, which cost less than a high street cappuccino per month. The return on investment is almost immediate from time-savings alone.
Cloud accounting is the most secure means through which to store and protect your data. Leaving information on your desktop, laptop, or your phone is an easy way to have your data compromised. This is highly important not only for data security but also data privacy: the GDPR (General Data Protection Regulation) – a legal framework covering the collection and processing of personal information of individuals within the European Union which comes into force on 25 May 2018.
With the mandation of Making Tax Digital for VAT registered businesses, with turnover above £85,000, less than a year a year away, cloud accounting software is ideally poised to play a vital role in ensuring that those affected are ready to submit MTD-compliant VAT returns, are for the first return period starting on, or after, 1 April 2019.
In summary, cloud accounting provides you with the capability to manage your business finances proactively, to work more closely with your accountant or book-keeper, to take more time to focus on your business and to ensure your business is compliant in the digital age.
Interested to learn how cloud accounting can help your business, please contact us.