Cloud accounting tools have become a popular choice for most businesses because of their useful functionalities and the ability to manage accounts remotely, without the backlog of paper invoices, missing spreadsheets and loose receipts. The concept of the cloud is to allow you to complete tasks on any internet-connected device rather than previously needing to use the same computer to access an installed program.
Effective tools to manage your accounts
There are several all-in-one applications out there such as Xero or alternative programs that specialise in a specific area of financial management. For example, Satago is an invoice reminder CRM designed to chase payments efficiently and professionally. However it won’t file your expenses or manage payroll because that’s not what its purpose is. Below we have listed the top cloud accounting tools known and used by business owners to help you choose what application is right for your organisation.
Xero
Xero is everything you need in one place and is perfect for business owners of all abilities and sizes. The application allows you to collaborate with team members and your accountant while reducing the amount of manual data entry required by users.
Xero has been developed to be integrated with over 400 apps, boasts free unlimited users, regular and free updates and no setup fees or contracts. However add-ons must be purchased to complete time tracking, payroll processing and inventory tracking. Xero only imports information from your bank and PayPal so businesses are unable to use the application for merchant account payments.
Quickbooks
Quickbooks is flexible and customisable to your brand. You can redesign your dashboard layout to tell you the information you require as soon as you login and invoices are customised to your branding with the option to add custom fields. The application is easy to set up and will present your company cashflow in a simple diagram on the dashboard for you to clearly show what money has been made, lost or overdue.
Competing closely against Xero when it comes down to price; you can purchase the full accounting package for £15.00/month for 12 months and then rising to £25.00/month once the offer has ended. However you will be required to pay an extra £1.00 per month for each employee to manage their payroll, similar to the structure of Xero.
Sage One
Sage One has been designed with the user in mind and is perfect for someone who isn’t the most experienced in accounting applications. Its separate packages are tailored to the needs of the organisation using Sage One. The Sage One Cashbook package is ideal for sole traders that need a simple way of tracking their cash flow without paying out large amounts each month for features they don’t require. However Sage One fails to create detailed reports on individual transactions and requires users to pay extra for their payroll management services.
FreeAgent
FreeAgent is another all-in-one platform that offers the same features as other popular accounting packages. It also provides a tax timeline to keep you updated with important deadlines, a live profit and loss report and easy drag-and-drop customisation. These impressive features do come at a premium and cost an extra fee each month compared to Xero and Quickbooks.
Satago
Satago is purely an invoice chasing application that integrates easily with most cloud accounting packages. The purpose of the application is to automate invoice chasing and monitor credit risk of your customers using integrated Experian data. You can also send physical payment demand letters with printing and posting available through Satago, so you can spend more time focusing on building your business rather than chasing overdue invoices.
Clearbooks
Clearbooks is an all-in-one accounting software package, similar to Xero and Quickbooks, that allows you to generate, store and submit your VAT returns directly to HMRC. The cloud tool easily integrates with PayPal, MailChimp, DueDil and other online applications to effectively manage your accounts and plan your next actions.
Kashflow
Kashflow is a complete accounting application, allowing you to manage purchases, payroll, invoicing, cash flow, credit control and many more. The flexible application allows you to choose from three package options including ‘Starter’, ‘Business’ and ‘Business + Payroll’. Their generous number of choices enables your business to choose the package suitable for your budget and accounting needs.
A benefit of most tools mentioned in this guide is that they offer a free trial of their software before you buy. I would definitely recommend either trialling a few that seem the most appropriate for your business or consult an accountant to get help choosing an accounting package.
Advantages of the cloud for accounting
When you compare cloud accounting tools to traditional methods of account management, there are so many benefits that these applications offer. Some of these include:
Manage your cash flow remotely - There’s no need to be in the office to file your expenses or pay your employees. You can access your business account securely using your PC or even mobile for some accounting packages. However an internet connection is required.
Everything where and when you need it - Forget the pile of paperwork and lost receipts. All of your invoices, expenses, payroll data and much more are stored securely in your chosen application.
Flexible account control - Most cloud accounting tools allow you to decide who has access and what they are able to do within the application. You can also allow your accountant to check over your business accounts using a separate login for your peace of mind. It is highly recommended that you still work with an accountant to ensure that you are inputting the correct data into your application and everything is carried out to the legal standard.
The challenges of cloud financial management tools
It is important to weigh up the pros and cons of using a cloud accounting software for your business before you decide to invest time and money into a new accounting strategy.
Security - There is a small risk of hacking or the software failing to work when developers are making improvements to the application. However most, if nearly all, cloud accounting tools are equipped with bank-level security to ensure your information is stored safely and accessible only by the users you grant access too.
Offline account management - The main disadvantage to cloud technology is the need for an internet connection to access these applications.
Human error - The data you input into your accounting software is only valid if the information is correct. The accounting software will only work based on the information you give it. It is always advised to hire an accounting professional to oversee your account activity to ensure everything you enter is correct and to the regulatory standard.
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