Between email correspondence, internet banking and social media interactions, many aspects of our lives are becoming more and more dependent on internet based technologies.
In recent times, we have observed an increased popularity of internet technology amongst our client base and the broader industry by the use of “cloud accounting” packages (“CAPs”). The term CAPs simply refers to the use of accounting software that is either accessed via the internet (browser based) or where the data is stored on the internet and is accessed by software installed on a computer. The most well know CAPs are MYOB Essentials, MYOB AccountRight, Xero, QuickBooks Online, JCurve and Saasu.
The use of such technologies provides the following main benefits:
1. Timeliness – one of the major advantages is that information is available much quicker, which aids in the decision making process. This is achieved predominantly through the use of bank feeds, whereby the CAP is securely provided with transaction data from your business bank accounts. If set up properly, the CAP will recognise regular transactions and allocate these to the correct account with minimal human intervention. This significantly reduces the amount of time taken to perform administrative functions such as bank reconciliations, which frees up time to perform other tasks.
2. Portability – Browser based CAPs give the users (i.e. business owners, accountants etc) the ability to access their accounting records anywhere there is an internet connection. This gives a huge amount of flexibility in the way the data is viewed and used. Many CAPs also have applications made especially for smart phones and tablets. This functionality also gives your accountant access to your accounting records at all times, making it easier to assist with problems and decision-making using real time data.
3. Scalability – the functionality of many CAPs is able to be expanded as your business grows and the need arises. The use of “add-ons” which are designed to integrate with the CAP give you more functionality as your business grows and can sustain the increased cost. Some of the popular add-ons include customer relationship management systems, budgeting and forecasting, time billing and trade debtor management.
In the next issue, we will look at a case study of how a CAP has been implemented for a client and the resultant benefits from doing so.
ESV has experience in being able to identify which CAP is optimum for your business circumstances together with maximising the benefits from utilising your existing CAP. Please contact your relevant ESV engagement partner on 9283 1666 to discuss how the use of a CAP could assist your business.
Article by Geoff Tierney