Every accountant under the sun is banging on about cloud accounting. Often for very good reason.

We’re no different.

We encourage all businesses to use accounting software and in most cases we’ll recommend cloud accounting software.

Why? Primarily because cloud accounting:

• makes data entry much more efficient
• is accessible to the accountant and to members of your business
• can be done anywhere, anytime – tailor-made for WFH

Mostly we see each business raising its own sales invoices, ideally within the cloud software so that raising an invoice is also accounting for the invoice and starting it on its route to get paid. Sometimes a business will continue using a tried and trusted invoicing process if they prefer.

But it’s all the other accounting – for suppliers’ invoices, expenses, bank receipts and payments, credit card transactions etc. – where cloud accounting should make a big difference to bookkeeping and producing up to date, accurate, complete financial information.

The information you need to run your business profitably and maintain good cashflow.

Don’t be the block in the road

And this is where we see many SME business owners get in the way.

Cloud accounting is a continuous activity. Sales, purchases, bank receipts and payments happen every day. So make sure your bookkeeper has access to the transactions as they happen.

• Raise your sales invoices as soon as you can and pass them to your bookkeeper if they are raised outside your accounting software
• Keep your bank accounts connected to the software (they will disconnect every 90 days for security reasons)
• Forward all incoming suppliers’ invoices to your bookkeeper when you get them
• Consider using a document processing app (AutoEntry or Receipt Bank)
• Send all of your bank statements to your bookkeeper early in a new month so they can be agreed to your accounts (the bank reconciliation is a key financial control and should be carried out frequently – don’t let anyone tell you otherwise!)
• Respond to queries from your bookkeeper promptly
• Only do parts of the work yourself if you have had appropriate training and can do it right
• Make sure you understand , review and take action on financial reports

Cloud accounting really is teamwork – between your business, your bookkeeper / accountant and perhaps one or two apps. If you work together it all works well and you can concentrate on making money.

And make sure your accountant knows what they’re doing as well. Cloud accounting does not a good accountant make!

Michael
Sales | Margins | Profit | Cashflow
@profit_cashflow