Cloud accounting software allows you to access real-time data, make more informed business decisions, and saves you time and money in business admin. As with everything, accounting software is only as effective as those that use it. Read on for our top cloud accounting mistakes and how to avoid them.
Mistake #1 – Still keeping paper and offline records
According to a study by Cleardata, UK businesses need as long as 5 to 6 days to retrieve documents on average, while for 44% of companies it takes more than a week. Storing files in the cloud can help you tackle this issue.
For years, businesses have stored whole trees-worth of paper documents in carefully (or not) labelled filing cabinets, forever fearful that one day HMRC will come a-knocking and an all important document will be missing.
Those days are over. You no longer need to keep a hard copy of your records, as it’s okay to keep paper copies of receipts and invoices. You may as well bin the paper piles for good.
Solution: Old habits die hard, so it’s a good idea to get your employees, or, if you’re an accountant, your clients, into the routine of uploading pictures of receipts and other documents on-the-go. Set the aim of going completely paperless by a specific date, and gradually shift your processes so that you eventually store absolutely everything online.
Extract data from receipts and invoices in seconds, and use the instant 1-click export to QBO or spreadsheets
Mistake #2 – Ineffective integration
One of the biggest benefits of cloud accounting is the ability to integrate with other systems, such payment solutions, financial reporting and planning tools, CRMs or data entry apps. All these systems can communicate and share accounting and financial data that the cloud-based accounting system provides.
Effective integration makes serving customers easier for all teams in your organisation. It also means your pipeline will flow more smoothly, as everyone has access to all the information in real-time.
Take a look at this list of add-ons that integrate with QuickBooks Online to streamline your business processes.
Solution: Take the time to really understand what your business needs, what systems will help streamline processes and how they can be linked for optimal performance. Get involvement from all departments to ensure all elements of your business processes are considered.
Mistake #3 – Not backing up
To ensure the highest level of security, it’s important to create your backup strategy and select the provider that meets your expectations. If you decide to download your data for backup, make sure you store it securely in the cloud, and not on a pendrive (see #1).
Some of the popular cloud-based accounting systems come with built-in backup options. For example QuickBooks Online stores your data on two hard drives with a bank-level security.
QBO can’t restore your data to a certain point in time, so if this is your requirement, you need to use a third-party provider, such as Chronobooks. It saves the status of your account every 5-10 minutes and allows you to restore data to any point in the past.
Solution: Make sure you know what level of backup your cloud accounting provider offers, as you may need to search for an alternative backup options that meet your needs. Ensure you clearly organise by month and year so that all financial information is easily accessible should HMRC ever investigate your business.
Mistake #4 – Not inviting others to collaborate
According to a recent study, as much as 69% of CFOs rely on spreadsheets to create reports. With cloud accounting in place, this shouldn’t be the case.
The beauty of the cloud lies largely in the ability to collaborate, so that everyone has access to the data they require on-the-go and in real-time. According to Forbes Insights, 93% of business leaders believe that cloud collaboration stimulates better innovation. It creates connections between employees and empowers them to work more efficiently and effectively. Cloud software can only be used to its full potential when collaboration is enabled.
Solution: Have an on-boarding process for all employees who require access to your financial systems. This should detail exactly what access is required, as well as the person’s security permissions. Most cloud accounting systems allow you to specify exactly what information team members can access and what changes they can make within the system.
Mistake #5 – Ignoring security functionality
Hackers increasingly target small businesses because they are often more lax on security and can sometimes provide a backdoor into large corporations with valuable data. Don’t let yourself be vulnerable – a security breach could result in legal action, liability damages, fines or worse, especially in the context of the new GDPR rules.
Solution: Luckily, modern accounting systems, when implemented properly, protect your data with role-based security capabilities. Ensure you always take the time to set these up properly and use the two step authentication process where possible (you’d be amazed how many people don’t activate this). Always log out once you have completed your session.