Cloud accounting solutions – What are the options?
When you think of “cloud accounting solutions” you may think of something designed with the sole trader in mind – perhaps Quickbooks or Sage – a step up from spreadsheets but still something small.
Today there are many different levels of cloud accounting solution which all benefit from anytime, anywhere access and cloud backup.
Freelancers and very small businesses might be happy to stay at the simpler end of the market but more complex, growing businesses are going to need something more powerful – and that means moving up to the next level of cloud-based financial management applications.
At this point a salient question arises – is it a cloud accounting solution that you need or is it time to upgrade to a cloud based enterprise resource planning system (ERP)?
What’s the Difference between Cloud ERP and Cloud Accounting Solutions?
There can be confusion about this! Finance is at the heart of all ERP systems. It is usually the element that everyone wants to get their hands on first – regardless of what other functionality you might plan to open up later.
Accounting software only manages a specific area of a business – generally covering things like accounts receivable and payable, banking, financial reporting and some basic revenue/sales recording and tracking.
ERP is a fully integrated comprehensive, end-to-end solution that covers all areas of the business.
This includes all the functionality of accounting software, plus tools for managing the supply chain, logistical requirements, inventory, warehouse management, project management and more.
Many businesses start out with basic accounting only, when the company is young but as the business grows and the need for additional functionality arises, they will start looking at ERP.
Summary of accounting software categories:
- Run small business using an electronic spreadsheet.
- Use commercially-available software.
- Up-grade to enterprise resource planning software (ERP).
Benefits of the cloud
Cloud accounting solutions come as a subscription model. This means;
- Predictable pricing
- Regular upgrades built-in
- Data backed up
Access on the go
Access to the system via mobile device is a great boost but it is worth checking your chosen system for ease of usability – some mobile versions are more sophisticated than others.
With all that data going into your system you are going to want to make the most of it. Most ERP comes with inbuilt analytics for actionable insights as do some cloud accounting solutions but it is worth checking.
With so many systems on the market it helps to consider the following points when choosing your cloud accounting solution;
- Tasks required
- Look and feel (user interface and navigation
- The number of staff who need to log into the site and the ability to restrict pages they can visit and actions they can take
- Customizability and scalability
- Quality of mobile apps and add-ons
- Availability and quality of user support
- Subscription fees
- Integrates with other back office functions?
Making Tax Digital
From April 2019 businesses will need to submit their VAT returns via digital software rather than filling in a form online. It is hoped that by automatiing VAT submissions the government will avoid losing billions in potential revenue as well as making the whole process more efficient.
But the government will not provide the software – you have to do that.
A list of compatible software as well as software in development can be found here.
ERP for mid-sized business
What to do? It is very much a personal choice whether you want to purchase a cloud accounting solution for where you are now or whether you are looking forward to the kind of growth which will require a cloud ERP for your size and line of business.
We recommend SAP Business ByDesign – an ERP created in the cloud for growing midsized companies. This system will take care of all your finance reporting needs while also connecting every function across your company for a seamless end to end experience. Benefit from;
- Intelligent cloud ERP: Streamlined end-to-end processes
- Instant value: Enables agility to quickly adapt for new opportunities
- Business impact: Real-time analytics included to help improve profits and efficiency