At Smith & Brown we believe that many businesses could benefit from implementing a Cloud-based accounting system, and our reasons for thinking so are explained above. But we know it’s not for everyone. You may not want to go that way for reasons of your own, and we absolutely encourage you to tell us that. We may also take the view, after talking closely to you and looking at the exact requirements of your business, that we wouldn’t recommend it to you either. There are some situations where Cloud accounting is not the best solution. That’s why we will never push you into adopting cloud accounting, or any other system of working, even though it makes our job much easier.
In the event that you do decide that a cloud accounting system is for you, for your convenience, and because we don’t believe in promoting a particular product when its competitor might be better for you, Smith & Brown have undertaken a review of some of the leading providers of Cloud Computing Solutions including Xero, Freeagent, Quickbooks and Wave, that might be of help to your business. You can find them here.
Cloud Accounting gives you access to a huge range of real-time data about your business 24 hours a day. It’s not suitable for everyone but we believe that, properly implemented, Cloud Accounting can be a revelation for a large number of businesses.
Believe it or not, Cloud Computing has been around since the 50s, when the first supercomputers were used in research networks to carry out tasks too complicated for the smaller machines connected to them. Nowadays, ‘The Cloud’ is often used to refer to the Internet itself, although specifically, Cloud Computing means the use of a small number of centralised servers – called ‘the back end’ – to run programs and store data which are made available over the internet to ‘the front end’ a large number of less powerful machines in the hands of people like you and me.
Practically speaking, having Cloud-based data and software means that you can access it anywhere in the world without having to install it on any of your desktop computers, laptops or mobile devices, providing you can establish a connection to the internet. Programs like Spotify, drop-box and iCloud are examples of Cloud computing that you might already know. Accountants, with Smith & Brown amongst them, have been among the first to see the benefits of this approach and get involved.
Cloud based accounting software gives you, your finance team and your accountant, access to the same data simultaneously without having to send it to each other by email or physical methods like USB or CD. Your bookkeeper, for example, can upload an invoice to an application like receipt-bank [link to review page] and minutes later, your balance sheet will be automatically updated and instantly viewable by you, and your accountant through another cloud based application like Xero or Free Agent. Clever, we think, and likely to save you time and money from the outset. Even if these new programs aren’t going to work for you, the Cloud can still be a great way to share data in spreadsheet or document format. You can even photograph things you want to share and distribute them that way too.
Beyond conventional cloud computing, another recent development in information technology may provide tech-savvy companies another level of efficiency and convenience in the way they handle digital information. This is known as an Application Programming Interface or API.
Automating the Internet – API Systems – A Glimpse of the Future?
Application Programming Interface (API) systems may well be the next big thing in the world of information technology. An API gives you control over the way in which different applications interact by providing a piece of bridging code that allows one to drive the other. For example: Kevin [Link to sample customer 2], the owner of a small electrical business is looking for a more efficient way to invoice customers who communicate with him by email. We introduce him to an app called Quick-Books, a cloud based accounting system, and set up an API which automatically creates a new invoice every time he receives an email from a new customer, without him having to generate it by hand. We can show you how to set up APIs freely between more than 200 cloud based applications, and the trend is growing, so the possibilities are potentially endless.
All that said, it is important to consider carefully before you adopt a cloud computing system out of hand. Whilst adoption of a system like this can be the defining moment in the life of a successful business, it can also be the greatest disaster.
Effective Data Sharing
With Cloud accounting, your financial information is instantly and automatically shared between everyone in your team who has the authority to access it. It can be updated in real-time with the minimum of data entry and easily accessed through any computer, tablet or handheld device.
Reduced Software Costs
In the past, if you wanted everyone in your workforce to have a particular piece of software installed on their computer, you would have to pay for licenses for each and every one of them. With cloud based software such as Xero, Freeagent and Geo-Op, you subscribe with a single payment, or monthly subscription, and can download it onto as many devices as you like.
Reduced Hardware Costs
With most of the software processes and data storage handled by the ‘back end’, Cloud Computing systems place much smaller demands on the ‘front end’ devices that your staff use to do their jobs. This means that you can streamline your hardware: you don’t need powerful processors or large volumes of data storage locally because all of that capacity is provided by large servers elsewhere in the world, and paid for by someone else.
Cloud computing systems have inbuilt redundancy. Whenever you upload anything to the Cloud, it’s stored on a server and automatically backed up by at least one other copy stored on a different machine. This means that even if one server were to fail, your data would still be safe and accessible just as if nothing had happened. In addition to this, a streamlined ‘front end’ of similar machines running identical software presents a much smaller challenge from an IT support perspective than a mixture of desktops, laptops and handheld devices running different operating systems and end-user software.
Security and Privacy Concerns
Cloud accounting services, including data storage are provided by third parties. This is the electronic equivalent of giving your important, and potentially secret financial documents to someone else for safekeeping. Clearly, if you were to do this, you would want to know you could trust that person, and companies like Google and Apple who host Cloud accounting services make extensive commitments to protect your data – their business depends on it – but, as with anything in life, there are no certainties. Your data could potentially be accessed by unauthorised individuals.
There is an ongoing debate at the moment about who exactly has ownership of data stored in Cloud Computing systems. The same companies whose terms and conditions require them to protect your data from unwarranted intrusion also include clauses that allow them to use and distribute that data at their own discretion. In practise, this is unlikely to occur with your accounts, but if you are a public limited company, for example, and your share price could be affected by
premature release of sensitive data, you might want to consider private and secure Clouds hosted by companies specialising in this sort of provision, or indeed, no cloud at all. We can, of course, assist you with this too.
Denial of Access
The situation in which a Cloud provider prevents the access of a user to his or her own data, either deliberately, or through failure of equipment, has yet to be tested in law. Again, such a situation is extremely unlikely because of the inbuilt redundancy of Cloud Computing systems and the need for providers to protect their reputations, but it could happen, and so it’s something you should definitely consider before opting for a Cloud Computing solution.
Communications with HMRC & Companies House
Self Assessment Tax Return
CT600 (Company Tax Return)
Monthly Management Accounts
Accounting Systems Set-up
Business Startup – Company Formation
Benchmarking and KPI’s
Virtual / Part-Time Financial Director / CFO
Non-Executive Director (NXD/ NED)
Disaster Recovery Systems
Monthly / Quarterly / Annual Performance Meetings