Moving into the cloud
9th October 2019
How businesses maintain their accounting records, send invoices and submit returns to HMRC is in the process of change. Increasingly these tasks are undertaken using cloud-based apps such as Xero. There are a number of drivers for this change – firstly, HMRC are rolling out Making Tax Digital (MTD) and it is the aim that businesses submit returns and other information to it through electronic software, but more importantly, moving the accounting of your business into the cloud has a number of significant advantages for your business in terms of increased efficiency and improved business processes. Moving to the cloud also tends to represent better value for money than traditional desktop software.
What is cloud accounting?
Previously, accounting software tended to be installed on desktop computers. The person or people maintaining the books and records gained access through logging into this software. Interaction with the outside world was , software was fairly expensive and periodically you would have to pay for an upgrade. The next generation of accounting software is cloud based. This type of software tends to be subscription based with no long-term contracts and the upgrades are included. As it is online the software can be accessed using a range of devices including tablets and phones.
What are the advantages of cloud accounting?
Moving your accounting onto a cloud-based application has advantages for your business:
- Collaboration – your accountant can access your data at any time and can assist you with any queries or issues without the need to send them a back-up or try to describe the issue over the phone.
- Automation – Online apps can have bank transactions fed directly into the software automatically (bank feeds) saving you the time in posting bank transactions.
- Other Apps – Online apps can connect with other online apps which can make your business processes more efficient and effective. For example, Receipt Bank can read and post your purchase invoices into your accounting software saving you the time of processing purchase invoices.
- Subscription – there are no long-term contracts or periodic upgrades. Subscriptions are monthly and can be cancelled at any time.
- HMRC compliant – HMRC are currently in the process of moving businesses onto a system where returns will have to be submitted electronically through digital software (MTD). At present VAT returns for businesses with a turnover above the VAT threshold submit their returns in an MTD compliant way. Using a cloud-based system is the simplest way of achieving this.
Alexander Sloan are Xero Platinum Partners and we recommend Xero to our clients. It is the market leader and is tried and tested. We have been using Xero for our own books and records for over five years and it has saved us a huge amount of time. The bank feeds, which are now available for most banks, mean that bank transactions are fed into software and by using ‘Rules’ we can automatically account for transactions. It also works well with Receipt Bank which means that the chore of processing purchase invoices has largely been removed – saving us more time.
How we can help
We have over 20 staff members who are Xero certified and can assist you with the transition to Xero. In addition to that we can advise on other online apps that can help you make your accounting and other business processes more efficient. Our deep experience of Xero means that we can assist you quickly with any issues you may have and . Our dedicated team of advisors are on hand to support you with your migration on to Xero. If you would like to hear more about Xero and view a demonstration of the software, contact us on 0141 204 8989.