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Your Complete Guide to Transitioning to Cloud-Based Accounting

Small businesses and startups are always looking for ways to save time and money. One of the best ways to do that is by switching to cloud-based accounting! If you’re tired of the disorganization, man-hours, and cost associated with traditional accounting, then cloud-based accounting is the right move for your business.

How Does Cloud-based Accounting Work?

Cloud-based accounting works by using software that handles all of your accounting activities virtually – from invoicing to tax prep and expense organization. This software can be accessed by your leadership, accounting team, and staff to organize, track, and manage your business’s finances all from their computers or cellphones. No more losing important paperwork or paying to mail financial documents! All of your finances can be managed from one location, seamlessly. 

The Advantages Of Cloud-based Accounting

  • Ease of Use: Cloud-based accounting software is designed to be user friendly, even for people without an accounting background. No need to spend weeks learning a new program – cloud-based accounting makes it simple.
  • Collaboration: The software makes it possible for staff at all levels of your organization to contribute towards streamlined accounting, including submitting receipts and expense reports, sending invoices, and putting together documentation for end of year tax season.
  • Cost: Especially for small businesses, freelancers, and early-stage startups, there may not be enough room in the budget for a full accounting team or CFO. Cloud-based accounting software allows you to have insight and organization over your business’s finances at a fraction of the cost of a full-time team.
  • Automation: Depending on the software you use, the possibilities to automate your finances are endless. From automatically accepting payments & bookings to paying taxes and fees, cloud-based accounting software can help free up time that you would have otherwise spent on traditional bookkeeping and admin tasks.
  • Tax filing and documentation prep: Calculating how much GST, income tax, CPP, EI and more can be a headache. Cloud-based accounting software can automatically calculate and prepare the documentation you need to make year-end a breeze.
  • Global Access: Now that more businesses are operating with remote teams, the ability to access your accounting software from anywhere in the world is becoming even more important. Cloud-based accounting software can be accessed if you have a wifi connection – no desktop download required.

Why Businesses Use Cloud-based Accounting

There are so many reasons that businesses have decided to transition to cloud-based accounting. Some of the most common frustrations or milestones that cause businesses to look at cloud-based accounting are:

  • Their business is growing, and founders, owners & CEO’s need to spend more time on strategic activities
  • Their current accounting system is disorganized, and they find that they’re wasting hours each week hunting down receipts and losing paper invoices.
  • They’re looking for a way to manage their carbon footprint and are reducing paper waste in their business.
  • They’re frustrated by relying on an accountant to tell them how their business is performing – they’d like to see a snapshot each day into their overall financial picture.
  • They want to be able to have their team collaborate and submit documents directly, without tying up time from admin and accounting staff.
  • They’re looking to scale their business, and the increased cost of accounting is eating into their bottom line. With cloud-based accounting, more time and money is saved the more a business grows!

Cloud-based accounting gives you the power and insight of a full accounting team at a reduced cost, all while seeing environmental and human resource benefits in your business. There’s no better time to make the switch!

How Safe Is Cloud-based Accounting?

One of the main concerns with transitioning to cloud-based accounting software is the safety and security of your business’s finances. For all cloud-based accounting software, whenever your accounts are linked directly, security certificates and encryption are used to ensure that your money is protected. 

By using cloud-based accounting software, you are also able to see what actions are being taken on your account. This increases transparency in your organization’s finances and reduces the likelihood of funds being misused. This can be especially important for businesses where there is a large leadership team, non-profit groups, and community organizations – having transparency and visibility into how money is being used can save major issues down the road.

The Best Cloud-based Accounting Software

There are hundreds of different cloud-based accounting software that perform different functions and have unique features, but this is the cloud-based accounting tech stack that we recommend for our clients:

  • Xero: Xero is the only cloud-based accounting software we use, and it is by far the easiest to use by both accountants and business owners while providing valuable information to both parties.
  • HubDoc: Hubdoc is a cloud-based receipt management app that integrates with Xero and provides a quick and easy way to capture your documentation and support for the business.
  • Plooto: Plooto is a payment processing system that can collect and make payments on behalf of the business by connecting your bank account(s) online.
  • WagePoint: Wagepoint is the main payroll provider we use for clients. For salary and hourly employees, it is easy to use and does everything from payroll processing to preparing T4s at year-end. 

You can read our full breakdown of each of these apps in our Best Cloud-Based Accounting Apps blog post.

Even with all the information you need at your fingertips online, transitioning your accounting from traditional paper accounting to cloud-based accounting can be overwhelming, That’s why the team at Virtual CFO Solutions is here to help, from consulting to full set-up, we can help your business transition quickly and effortlessly – saving you time and money! Contact us today and we can develop a strategy for your business.

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