The benefits of online accounting in a changing business climate

The traditional approach to bookkeeping for businesses is changing. Although manual records, spreadsheets and desktop accounts software have done the job well for many years. However the evolving needs of small and medium-sized enterprises (SMEs) require a more agile bookkeeping solution.

Business owners are increasingly working remotely, either at home or on the go. It’s more important than ever to have flexible access to your finances.

Businesses who embrace technology advancements can benefit from automation and save time in collating accounting information, and manual data entry.

There is also increasing pressure on businesses to digitise their accounting and tax reporting. Digital compliance is a necessity given the emergence of Making Tax Digital. 

Making Tax Digital is the latest initiative from HM Revenue and Customs (HMRC), designed to bring the UK’s tax system into the 21st century and streamline the tax reporting system for businesses. Time is running out for many businesses to upgrade their accounting infrastructure, with all self-employed professionals, landlords and VAT-registered businesses having to file quarterly returns via digital tax accounts from April 2026. 

What is cloud accounting software? 

Cloud accounting software is a digital form of bookkeeping accessed through a web browser or mobile app. You can access your data anytime and anywhere using a secure Wi-Fi or 4G connection.

You can do all your bookkeeping in one place, here are some of the functions available:

• Recording invoices, bills and payments
•  Automatic bank feed into the software
• Reconciling your bank account
• Entering employee working hours
• Producing financial reports
• Calculating and submitting your VAT returns
• Chasing customer payments

Advantages of using online accounting systems 

Multi-factor authentication (MFA) 

Leading software providers have high security standards, including the use of MFA to log-in to services. The software also has built in firewalls and encryption technology. Businesses can be confident that their data is secure.

Increased automation of tasks 

Cloud accounting automates processes that would otherwise require manual input.

• Automatic bank feeds can automate the recording of bank transactions directly into your accounts.
• It’s possible to trigger invoices and automated payment reminders, as well as scan in paper-based invoices and business expenses. 
• You can create rules so the software enters key information for you to approve.

Automation helps stay on top of your finances and free up time to focus on other aspects of your business. 

Scalable software 

Online accounting platforms make it easy to scale up the service you need. The software incorporates third-party apps and add-ons to develop a bespoke 24/7 accounting portal for you and your team. 

Automatic back ups

Software providers automatically back up all of your data. This means you won’t have to schedule regular back ups, and retain copies of these on your computer.

No software updates to install

Software providers update cloud software automatically, so you don't need to install updates or purchase a new version.

Bolt-on applications

There are lots of options available when considering adding applications to your software. These will save you time and make business more efficient. This could be an inventory management, a receipt scanner, a cashflow tracker or a customer relationship management (CRM) solution.

A real-time overview of your business figures 

Traditional bookkeeping was often a retrospective task for many businesses. Cloud accounting makes it possible to record business transactions in real-time.

With automatic bank feeds and the ability to access data on the go this is easier than ever. Business owners get a clearer understanding of where your finances stand. You can assure yourself that you're making business decisions with up to date, live information.

Multiple user access

Multiple users can log in and use the cloud software simultaneously. Business owners can create user profiles with different access rights, and can limit access if required. All users have their own log-in credentials and password. You can also access an audit log to see who made or changed a transaction and when someone logged in.

You can log in at the same time as your accountant

If you're not sure how to do something on the software, you can ask your TaxAssist Accountant for assistance. Your accountant will be able to log in to the live data and help you solve your problem. Your accountant can also assist you while screen-sharing on a video call.

There’s no need for you to take a back up of the data and send this to your accountant. Assistance can be quick and efficient.

Making Tax Digital compliant 

Cloud accounting software seamlessly integrates with the Making Tax Digital platform. This makes it a futureproof investment for your business’ bookkeeping.

Competitive pricing

Cloud accounting software packages offer competitive pricing and are typically cheaper than desktop software.

TaxAssist can support you in setting it up and using it appropriately 

Contact TaxAssist for further advice or support in using cloud accounting software. We work with QuickBooks, Xero and Dext and can advise you on the best option for your business. Arrange a free initial consultation on your cloud accounting needs. Call our friendly and experienced team today  on 0116 276 3728 or drop us a line using our online enquiry form. 

Date published 6 Aug 2020 | Last updated 3 Apr 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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