Being a small business, is cloud accounting software for you? By 2020 it is expected that 4 in every 5 businesses, large and small, will be relying on cloud computing. Exactly what is cloud accounting and how much does it cost? Perhaps surprisingly the answer is very little, we will even be considering a free option!
What is Cloud Accounting?
The death knell has tolled for hand written bookkeeping and accounting. In the UK the revenue have a new requirement for digital taxation. This requires that from the tax year 2019-2020 all businesses registered for VAT have to make a digital tax return every three months requiring a direct link from the business’ own computer based accounting system. Smaller businesses will also be required to make similar returns although the start date has, following representation from small business organizations, been deferred until 2021 or later.
The choice is now between cloud accounting or the traditional computer software packages, such as Sage, which sit on your own computer or server. These packages involve an initial investment in the software license and often require further up-date costs to the software and your computer equipment as time progresses.
Wikipedia’s description of cloud computing can be viewed by clicking here.
What Are The Benefits?
Cloud accounting is provided by a hosting company with all the software and data stored on their servers. There is no need for in-house software or computer data storage space; no initial outlay for a software license and no up-date costs. Another huge benefit is the elimination of maintaining and up-dating expensive hardware and reducing the needs for data backup and security issues.
Instead, the service is usually provided on a monthly subscription basis and as your business grows the service can be upgraded accordingly.
Is There Much Choice?
Initially cloud accounting was the domain of larger businesses but now several hundreds of providers offer cloud based accounting packages priced to attract the huge small business market.
Some better known packages are Sage Accounts, Xero Accounts, KashFlow Accounts and Quickbooks. Very low cost starts, sometimes about £6 per month, and some free packages are available. The expertise required to run these packages is reduced, so costs for personnel training are generally unnecessary.
Input and access to your records can be achieved wherever internet access is available – instant quotations and invoicing using a smartphone are achievable. You’re accounting function is not restricted to one computer, one office location or 9 to 5 staffing. Upgrades of your software and hardware to cope with business expansion are not necessary, your provider will manage any increase in disk space requirements for you saving you the cost of upgrading your own equipment and the additional maintenance costs.
Less Risk Of Data Loss
If you were running your own in-house accounting package there would always be the risk of data loss following a theft, fire, hack or electrical misfunction. If you did not have a backup your data may be permanently lost and, even with a backup, restoring your system may involve the costs of specialists.
Automation Of Your Bookkeeping
When you commence a business you will no doubt want to focus on the skills you have, unfortunately there will be many other aspects of business which will place demands on your business time. Anything from marketing to staff welfare and accounting.
Manually recording all of your bookkeeping entries can be extremely time-consuming and the risks of errors is high. However, your bookkeeping/accounting system can be highly beneficial to your business as a tool for anaysing your success; as a tool to control your cash flow; as a tool to identify the need for change and to provide you with the confidence to grow your business and perhaps obtain additional investment.
Automating your bookkeeping system will greatly reduce the time involved and increase the efficiency derived from your records.
A FREE Option For UK Small Businesses
Many of the bookkeeping software packages attempt to cover all business scenarios, resulting in making what should be a simple task far too daunting.
During 2014 a team of UK accountants and software developers set out to provide a package targeted towards small businesses that have little or no experience of bookkeeping, They have developed a double entry system that is easy to use and understand and still contained lots of features to help you efficiently manage your bookkeeping/accounts.
We have been following the development of Pandle Accounting which will be free for ever. There is also a Pandle Pro version costing £5 + VAT per month.
Pandle have doubled their development team and in July 2018 have over 17,000 users and partner with more than 300 accounting firms. A new website and help centre were recently launched. Their new website now includes 13 videos including an overview of Pandle, Setting Up, Invoicing, Entering Transactions, Supplier Invoice entry, Running a VAT return etc.
They also list 28 features included in the free Pandle and 38 features included with Pandle Pro. Their software is also being developed to encompass the requirements of the UK’s revenue move to digital taxation.
With the FREE Pandle you can create quotes, invoices (including your own logo if desired), send payment reminders, create recurring transactions, accept payment with Pandle Pay, receive bank imports, VAT submissions, EU VAT/EC sales lists, print business reports, accept multiple currencies, add notes to your transactions, have unlimited customers, suppliers and bank accounts, no usage limits, add/delete customers, suppliers and nominal accounts, export data to spreadsheets, receive tax estimations and reminders, include transaction locking, secure encrypted data, daily backups, online support, Android app, iOS app and you can still access your data for 6 years if you leave, and more.
The 10 additional categories included with Pandle Pro are Premium invoice templates, customer statements, bulk invoice e-mailing, unlimited users, user permission, bank feeds, PayPal feeds, receipt uploads, cash flow forecasting and projects.
Options are to commence with Free Pandle and upgrade when you are ready OR you can try Pandle Pro free for 14 days and decide which option to take. To view the Pandle website click here.
Other Popular Cloud Accounting Packages
The Bookkeeping Master (Sam Morton) has produced FREE VIDEO TUITION for three of the most popular accounts packages. These videos show step-by-step entries covering most tasks within these packages. There are 26 videos within his Quickbooks Online Tutorial, 13 videos for Xero tutorial and many videos for various Sage packages.
Sam’s website is freebookkeepingaccounting.com, the leading site for free online bookkeeping and accounting courses. Sam also provides Executive Accounting Services at a Minimal Price.
Part One of our own free seven part easy to learn bookkeeping course can be accessed by clicking here.
If you have any questions or would like to add a comment on this article I invite you to add this in the area below and I will be very pleased to respond