The way small enterprises are handling the financial aspects of their business is changing.
Thanks to the advent of Cloud Accounting solutions there is now a much more cost-effective way for small business owners to handle the day to day management of finances.
Traditionally a new business would choose an accountant for company formation, year-end accounts and general ongoing filing requirements. The day to day financial management would often be either handled by a book-keeper (often as part of the accountancy service) or by the business owner, probably using a combination of spreadsheets.
The traditional pieces of financial software, Sage and Quickbooks, would often be used by the accountant to generate the end of year figures. This was in part because of the complexities involved in their use, but also because of the software cost and mainly because the business owner would be getting on with the job of growing their company, with the paperwork commonly involving a cardboard box.
Cloud Accounting is changing the way small business owners are operating. For one the costs are considerably less, with industry standard packages available for a low monthly fee. With the economic climate putting more financial pressure on business, keeping accountancy fees to a minimum is a quick way to reduce costs, whilst also having more day to day control and reporting of the financials. Cloud Accounting has the added benefit of keeping your information off-site, not only adding to security but because it’s web-based, your accounts can be accessed from anywhere in the world. It’s very difficult to find a reason to pay more money for the traditional solutions.
So what of those traditional solutions? Well, Sage and Quickbooks are still likely to remain in favour for the larger businesses and less-forward thinking accountants, their online offerings are certainly worth a look, but their market share has succumbed to the more flexible web-based cloud solutions.
David Matthew in his article ‘are web-based apps threatening Quickbooks’ provides an excellent comparison of the new software companies getting in on the act with the established Quickbooks efforts to keep up. David is clear that these ‘agile web-based vendors’ are finding niches and have been able to make ‘accounting software interesting’. Features that the traditional producers would bundle into module add-ons are the norm with the cloud-based products - they accept that their users are more than likely to be trading online (e-commerce linking), handling foreign transactions (multi-currency) and have a need for different members of the organisation to use their software for different reasons (hierarchical multi-user), so why not make these features standard?
Only time will tell in the battle between old and new and old trying to catch up with new. Undoubtedly the giant software houses will evolve and fight back, but for the small business owner who can now easily manage their finances, generate attractive reporting wherever they are and reduce their monthly and annual accounting bill, cloud accounting is like a breath of fresh air.
Ascensor Cloud Accounting is a flexible accounting solution that integrates into the Ascensor Liquid platform and allows our clients to better manage their online transactions and reduce their annual accountancy spend.
Andrew J Firth