Accounting in the Cloud- 5 myths busted

Accounting in the Cloud- 5 myths busted

Author: Rob Ormiston 
cloud accounting

There is a lot of hog wash talked about cloud accounting. 

Cloud accounting can feel daunting to business owners – like many new technologies – and as a result I come across a lot of myths and misnomers that I am keen to set straight here. Put simply, cloud accounting allows businesses to manage their finances exactly as they always have, but in a more convenient and secure way.

“It is really expensive”

As always there is a range of prices so shop around. It can be as cheap as free, but is generally in the £20 to £30 per month range depending on what services you decide to go for. But to simply say it is far more expensive than old school SAGE for example is just wrong.

“Someone else will control all my data”

One of the big benefits of using the cloud (i.e. a large data centre controlled with very tight security) is that your data is safe and secure. You should always check the pedigree of any company offering cloud services (just as you should with any supplier) but the reputable ones will offer a safe and reliable solution with automatic backup and disaster recovery. They will also be clear where your data will be stored, so you are able to comply with GDPR rules. Only you will have access to your data.

“I will still have to keep all my paperwork”

Only if you really want to! I have been operating a policy of ‘scan and shred’ for years and all of my sales and purchase invoices and the like are all stored electronically. It is far more convenient to have documents stored and referenced in a way that makes them easy to find, and it saves on storage costs too. I have never come across a problem with HMRC or any other agency taking exception to the fact that all ‘originals’ are in fact ‘copies’.

“It is really complicated to set up and learn new software”

It is much easier than setting up accounting systems of old, and many are designed for use by non-accountants so don’t despair. Generally speaking the set up processes walk you through without assuming any prior knowledge. That said it is easy enough to pick up the phone and get assistance, either from the software companies themselves or from an accountant. The other huge benefit is the enormous range of apps (bits of software) that build a ‘stack’ of solutions to incorporate accounting, bookkeeping, payroll, stock control or online sales/epos. The list goes on and on to cover pretty much what any business needs.

“It is only suitable for tiny businesses”

Definitely not true. What governs suitability is the complexity of a business and particularly the number of transactions it produces. The concept of cloud accounting itself simply means the place in which the accounting system exists, either on your own site or in a remote data centre. It is possible to run a massive system like Oracle or SAP, generally designed for large companies of say £50m turnover upwards, in the cloud and equally possible to run Xero designed for smaller businesses, say up to £5m revenue. So what matters here is the choice of apps you decide to go for, not how they are deployed.

Technology is helping us to create efficiencies in business – so ignoring technology will in the long run make your business less competitive. Do ask for help in this space; any accountant worth their salt will be able to advise you.

For help, advice and support around any accountancy issues, contact us for an initial chat on 01937-541 770