The Benefits of Cloud Bookkeeping for Small Businesses
If you’re a small business owner, you probably know that you need a bookkeeper to help keep your business finances in order. However, when it comes to actually choosing a bookkeeping firm for your business, it might seem like they’re all the same. While your local bookkeeper may be able to get the job done with Excel spreadsheets alone, there are a number of unexpected advantages benefits to bringing on a cloud bookkeeping firm.
To help you understand why cloud bookkeeping is the right choice for business owners big and small, we’re broken things down to the essentials.
What Exactly is “The Cloud”?
While most people have heard of “the cloud,” many are a bit fuzzy on what exactly the cloud means—especially when it comes to their business. Therefore, it’s important to understand what the cloud actually is, before you can begin to understand how it can benefit you.
Understood in the simplest of terms, cloud computing refers to a centralized location on the Internet where data is stored. In other words, your data is stored on the web, instead of stuck on a physical hard drive or desktop computer. This means your data is accessible anywhere, at any time—as long as you have access to the Internet.
The best way to think about the cloud is to consider online banking. It used to be the case that you were only able to access your financial information if you actually went to the bank. Now there are online banking platforms that allow you to log in and access your data over the Internet—a perfect example of how financial data can be stored in the cloud.
The Benefits of Cloud Bookkeeping
With a better understanding of what the cloud is and how it works, it’s time to move on to the important stuff—what all this means for your business.
1. Streamline the Record-Keeping Process
If you’ve ever worked with a traditional bookkeeping firm, you’ve probably dealt with the monthly process of collecting all your receipts and then delivering an overflowing shoebox to your bookkeeper’s office—not exactly the most efficient system.
One of the biggest benefits of cloud bookkeeping is that it completely eliminates all the paperwork associated with bookkeeping by moving the process online. When you work with a cloud bookkeeper, you’ll be introduced to software that will automatically collect your data for you. For instance, you can use apps on your smartphone to take photos of your business receipts and the information will automatically be sent to your bookkeeper. Because all of your accounts are connected, you can easily track and organize all of your business expenses without having to jot down each purchase.
2. Keep Your Data Safe and Secure
While you may be concerned that storing your data online is risky, the cloud is actually the safest option for your financial records. With physical files, there’s always the risk of theft or damage. Just imagine what would happen if your office were to experience a flood or someone were to steal a hard drive containing all your business financials.
When you work with a cloud bookkeeper, you never have to worry about losing your information to a system failure or other disaster. All your data is stored on the cloud instead of a physical hard drive or in a filing cabinet, so it can never be stolen or damaged. With the cloud, your data is also constantly backed-up, so your files will always be safe and up to date even if a system failure occurs.
3. Strengthen Your Business Relationships
While you may think that old-school bookkeeping would lend itself to stronger relationships with your own, that isn’t necessarily the case. This is because your relationships with your vendors, distributors, and clients thrive open communication, and relationships can quickly sour over missing receipts or overdue invoices.
When you work with a cloud bookkeeping firm, there is always someone keeping a watchful eye on your day-to-day business transactions. Your data is constantly updated and accessible, so there’s less chance of missing a payment to your vendors or losing important client information.
4. Keep the CRA Happy
Perhaps the biggest benefit of cloud-based bookkeeping is keeping your business compliant and the CRA happy. With manual bookkeeping, the risk of error is high because humans aren’t as good at catching their mistakes as computers are.
When you work with a cloud bookkeeper, they use the most advanced cloud software to record and organize your data. This reduces the risk of errors and makes sure your business is in line with the latest regulatory changes—something that’s particularly important when it comes to payroll. Therefore, using software to keep your bookkeeping in order can help to prevent a lot of tax-time headaches and ensure that you don’t trigger an audit or penalties from the CRA.
5. A Service that Grows With You
If you’ve worked with a traditional bookkeeper in the past, you know that things become much more complicated as your business grows. Not only does the bookkeeping process take longer, but the complexity of your business finances may mean more administrative headaches—especially when it comes to tax time.
A major benefit of the cloud is that’s scalable. This means that you only invest in the services you need up front and then you can gradually increase your usage as your company grows. And because software automates many different bookkeeping functions, your bookkeeper can adapt their workflow as your business grows.
If it sounds like your business cloud benefit from cloud bookkeeping, contact the experts at wedobooks.ca.