Last editedJan 20222 min read
Keeping your financial records updated can be a thankless task, particularly when done manually. Cloud bookkeeping software streamlines and automates many repetitive tasks while keeping your sensitive financial details securely encrypted. Keep reading to find out more about how cloud bookkeeping works, and why it might be a good option for your business.
What does cloud based bookkeeping mean?
Businesses have long been using desktop accounting software to record and track money flowing in and out of accounts. Cloud based bookkeeping simply moves this process off the desktop computer and into the cloud for more flexible access and security.
With traditional desktop bookkeeping software, you’re only able to use the application when you’re logged into the computer where it’s installed. Applications might be limited by desktop storage, and users must stay on top of updating software as needed.
With cloud accounting or bookkeeping software, there is no physical desktop application to install. Instead, multiple users can log into the software from any online device. The software is kept up to date with real-time updates, and many programs have an open API for easy integration with third party software.
Features of cloud bookkeeping software
While bookkeeping and accounting are often terms used interchangeably, there are subtle differences. Cloud accounting looks at the bigger financial picture, while bookkeeping focuses specifically on recording daily transactions in a consistent, error-proof format.
Keeping that in mind, here are some tasks that cloud bookkeeping software can assist with:
Recording all financial transactions
Preparing the balance sheet
Preparing the cash flow statement
Preparing the income statement
Posting debits and credits
Maintaining payroll records
Maintaining the general ledger
At minimum, cloud bookkeeping software will have features in place to automate and streamline these tasks.
The benefits of cloud bookkeeping
In comparison to traditional bookkeeping practices, there are plentiful benefits in shifting to the cloud. Bookkeeping cloud systems can:
Save money by automating everyday transactions and financial records
Free your business from wasting time on repetitive manual tasks
Enable you to share your books with relevant team members
Allow your team to access the software from anywhere with an internet connection
Produce uniform invoices and reports using real-time information
Keep details safe using tools like end-to-end encryption
Is cloud bookkeeping safe?
From client payments to account details, you need to keep your financial information safe. How secure is the cloud? Very. Cloud bookkeeping software encrypts data to keep it safe from prying eyes. While a physical laptop could be stolen, compromising sensitive financial information, cloud bookkeeping software keeps accounts secure.
You need to constantly back up your data when using traditional desktop bookkeeping software. It’s also important to create an organised filing system for all the physical spreadsheets, receipts, and other paperwork involved with running a business. If there’s a fire, flood, or other disaster, you can lose valuable details in an instant. By contrast, cloud based bookkeeping means you don’t have to worry about productivity being impacted or records lost.
How to choose bookkeeping cloud software
To reap the benefits of cloud bookkeeping, you must find software that best suits your business’s needs. You should also think about the budget. Most cloud-based software charges a monthly or annual rate on a subscription basis. Is the software scalable? Will it use live bank feeds to keep data constantly updated? Does it offer additional features like tax compliance?
The best software will also automate your billing process to reduce late payments and time wasted chasing up on invoices. At GoCardless, we partner with major cloud bookkeeping providers such as Xero, Sage50, QuickBooks, Tide, QuickFile, and more, with over 200 accounting and invoicing integrations in place to take the pain out of getting paid.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.