I remember a time when bookkeeping was the most frustrating part of an entrepreneur’s business, creating a lot of headaches. Most small and medium enterprise owners don’t have time for bookkeeping. They just want to let their creative entrepreneurial sense take over and make money. In contrast, most of them want to keep their overheads down and this results in them doing the bookkeeping themselves and this often result in it being neglected. This has unending consequences as one problem creates the next one.
It starts at sending out quotations. By being professional the owner visits a potential client and evaluate the work to be done. Then he drives back to his office, creates the quotation and send it to the client. This creates the first set of problems: Fuel expenses and time! By driving to and from a client and then having to do it again as and when the quotation is accepted reduces your profit on that job in the form of motor expenses and it limits the amount of time that could have been used to generate new business, thus less productivity which results in less turnover. This could have been resolved by doing the quote on the spot, get approval and doing the job immediately.
After a job was done, the client needs to be invoiced. As this is again part of the administrative burden of a small business, it gets postponed. This has a bad result on cash flow as clients notice that it wasn’t important for the business owner to issue the invoice, thus its not important for them to process the payment with speed. Cashflow becomes a challenging task.
The rest of the bookkeeping is being left till the last minute and by that time documents have gone missing, and the owner forgot about expenses with the result of it not being captured for tax purposes. Bank reconciliations became a nightmare and cash only intensified the problem.
The above issues were normally addressed by appointing office staff to assist in reducing this admin burden, however it resulted in an increase in overheads due to salaries being paid.
Currently bookkeeping is made easy with the digital solutions. Cloud accounting software makes every person a bookkeeper! Let’s look at the reasons why:
Automate data capturing
When looking at cloud accounting software, certain features is introduced to automate bookkeeping. An example is the direct bank feed in QuickBooks Online where transactions on your bank account is being download directly into the accounting software, leaving you to only do the allocation. This reduces the time spend on data capturing immensely.
Working on the move
Accounting software, like QuickBooks Online, offer a mobile app that is a direct link to your cloud database. On this app most of the daily bookkeeping services can be executed. This includes services from capturing and sending out quotations and invoices up to the capturing of expenses, with the added option of electronic filing by taking a picture of the expense and adding it to the transaction while capturing it.
One universal and complete database
While working on the cloud accounting software you have the complete and utter knowledge that you are working on the correct database and that it is 100% complete and up to date. All information done on any mobile app for a specific company is in time and with no delay. User rights can be setup to safeguard information.
No more backups and updates
Cloud accounting software is not hosted on your personal computer. You just use an application like a browser to access the information in the cloud. This results in you not having the option to do updates as this is a build in feature by the developers of the cloud software. Most reputable software developers also include the safeguarding and backup of their entire system, creating the much-needed trust in their software, leaving you time to do something else. This additionally assist people that is no technical fundi.
The add-on options
Cloud accounting software will never be able to satisfy all customers, as every business has its own needs and requirements. However, cloud accounting software allows applications to be added to the software to give the client a complete experience. The cloud accounting software supplies you with the basic needs for any business in the most detail as possible. For that specific needs a third-party app will be used or developed to assist in fulfilling the clients need, with the advantage of synchronizing to the cloud accounting software.
In a time where everything possible is moving into the cloud, bookkeeping and accounting is following suit. The days of spreadsheets and desktop software is gone and the sooner you move to an established accounting solution in the cloud the better. Cloud accounting will increase your productivity, while sorting out all your admin issues. It will save you time and money by doing bookkeeping simpler, better and faster, daily.
Louis Aucamp, Professional Accountant (SA)
Certified Fraud Examiner