Everyday people use cloud technology to share, secure and store their data, from business documents to personal pictures. It’s easy to see why- it’s fast, simple and safe, especially compared to the more traditional methods of email attachments and flash drives. If this technology is already being used in everyday life why isn’t it being used in accounting? Enter cloud accounting. Cloud accounting software is similar to traditional, on-premises, or self-install accounting software, only the cloud accounting software is hosted on remote servers. It’s exactly like traditional accounting software except it’s is far superior in five ways.
Firstly, cloud accounting software is mobile and flexible. It allows businesses and accountants to update data and access it whenever and where ever. Traditional software is confined to one or two physical computers and sharing data has to be done through flash drives. The second benefit of cloud accounting is the real time aspect. Software and data updates can happen immediately meaning as a business you get a real time look at your finances and your accountant does too, which means they are able to provide you with the highest level of accuracy. Cloud accounting is also superior over traditional software because it has increased accuracy. Inputting data happens immediately cutting down the amount of human inputting errors and lost receipts. Some of the top cloud accounting softwares are xero and quickbooks cloud accounting.
Security is the fourth reason why cloud technology is the future of accounting software. Gone are the days of having to manually transfer financial data through a flash drive or have it all stored in a single piece of equipment. This method leaves data in danger of being damaged, lost or stolen but with cloud accounting data is stored remotely in the cloud and only accessible through encrypted channels with password protection. Cost is the fifth and final reason why cloud accounting is better. Unlike traditional software, the purchase of expensive equipment or updates, not to mention additional costs of IT personnel and backups, is not required.
With all these pros of using a cloud accountant why are you insisting on grounding yourself in the past with traditional software?
As a small business owner you may be used to taking on many different roles and are wondering if accounting is one of those tasks you can try to do on your own. However, small business accounting can be difficult and it can end up costing you a lot more if you try to do it yourself – either in monetary value, time, or lost opportunities. Especially if your business is successful, there comes a point where your time is the most valuable asset you have and is better spent creating value for your company rather then balancing books or filing tax returns.
Having a professional chartered accountant do your accounting also has the following benefits for small businesses:
- Creating Forecast Financial Estimates: Small businesses may be required to provide lenders or investors with a financial forecast which includes an economic forecast, expenditures, and pro-forma financial statements. This information is heavily relied upon by outside lenders in order to have an accurate and accountable snapshot of the businesses financial wellbeing.
- Determine Profitability: Although your small business may be generating a high revenue, if your profit margins aren’t up to par with your cost of inventory then your business is at risk. Banks and investors may also require profitability reports and forecasts to determine if the business will be able to repay their loans in a timely manner.
- Expert Insight: Chartered accountants have gone through extensive education refining their expertise in a wide range of topics and have years of experience. Their expertise allows them to provide you with insight into how your business can lower costs, reduce the amount of taxes you’re incurring, defer start-up costs. file tax returns, and ensure everything is running smoothly.
Finding a great small business accountant in Toronto can be difficult, but it is definitely worth it to find the right chartered professional account for your company.
Small business owners may be inclined to use a friend from school or their mothers friends sons accounting firm, choosing an accountant with no real strategy. However, as your business grows and technology advances, there’s much more to small business accounting then just counting beans.
These are the top tips for hiring a small business accountant:
- Determine Your Business Needs: Do you want someone you can hand off all your books to and will just file your yearly taxes, or someone that can be a strategic part of your company’s growth? Most small business owners have a wide range of topics they’d like to be advised on.
- Find Licensed Candidates: There’s three types of professional accounting designations – Toronto Chartered Accountants (CA) have global recognition and can do everything from startup counselling to acting as a Chief Financial Officer for a corporation, to acting as a trustee for bankruptcy. Certified Management Accountants (CMA) integrate business management skills with their accounting expertise to provide actionable insights into managing your business. Certified General Accountants (CGA) have a range of duties from bookkeeping, providing insights into financial statements, and overseeing the internal accounting.
- Determine Accessibility: At the beginning you may need to be in more frequent contact with your accountant. This means either having a closer location or a cloud accountant – an accountant that specializes in utilizing the latest cloud technology to always have up to date information integrated from your online accounting software.
- Cost: Most accountants charge by the hour, anywhere from $150 – $500. Understand how their fee structure works and when you are billed. Bring in a copy of your tax returns to see if they are able to give you a cost estimate beforehand. Generally though, you should not focus too much on price but rather on the value your accountant can bring to your business.
- Referrals: This is the time to take any suggestions from friends or family and utilize the above strategies to determine if the accountant is right for your business. Often times there’s an added obligation to go above and beyond when you are referred by a loyal client.
- References: Ask what other industries and types of businesses the accounting firm works with to see what type of experience they have and if they may have insight into relevant laws for your business.