I recently came across the following article in the Australian financial review on cloud based accounting that I thought would be good to share with you.
“Web-based accounting software is proving popular for small businesses that want to stay on top of their cash flow while keeping their costs down.
Such packages deliver software as a service, rather than a product. What this means is customers typically pay a monthly subscription for the service, which is accessed via the internet, and the provider carries out any maintenance and upgrades.
Benefits of an online accounting package include having your information stored securely online rather than on a server or single computer, always having the latest versions and being able to access the information from any device that is connected to the internet. It also means that a number of people in different locations can work from the same file or document at the same time.
Some of the popular online accounting systems available include: Xero, Saasu, QuickBooks Hosted, and MYOB LiveAccounts. Xero chief executive Chris Ridd says it’s the automatic bank feeds that are attracting many small and medium enterprises because it helps with their cash-flow management.
“Banks provide live feeds of transactions, which are available at least within 24 hours so customers know exactly what their cash position is on a daily basis,” he says. “There is no need to log into bank accounts, download the latest information and then upload it into the accounting system. This information is automatically synched in the cloud and waiting for the user whenever they log on.”
Advisers can also provide better advice, in real time, Ridd says. “Advisers can log on in the morning and see if there are any debts owed to their clients that are getting out of control,” he says.
Advertising product supplier Globe Design started using the system in September 2011 after relying on a series of Excel spreadsheets and a bookkeeper. Chief executive Bob Mileo has seen outstanding debtors as a percentage of overall accounts receivable fall from about 24 per cent to less than 1 per cent since implementing Xero. “The dashboard highlights overdue payments and has allowed us to gently remind our customers to pay their bills when they fall due,” he said. “It’s improved cash flow and enabled us to drive more projects with our customers and increase sales.”
Chief executive of web accounting provider Saasu Marc Lehmann agrees live bank feeds are appealing. “Business owners now know how much money they have in their business to the day and this helps with making much more informed decisions,” he says.
Lehmann says business has picked up this year, and attributes the one-off monthly fee that customers pay as a key part of this.
“This is attractive to SMEs; rather than having to buy the package and then pay additional licensing costs depending on how many users need access,” he says. “Any time there’s tax changes business owners need updates and with the desktop packages they need to pay for this.””
Gayle Bryant The Australian Financial Review