Silver lining in the cloud for your accounting
DO YOU remember the time before laptop computers and iPhones? Or when you gave your invoices and receipts to your accountant, and he or she draw up your financial statements?
I grew up seeing my mother writing up a cash book – yes, a physical book that was as long as a table. That manual cash book had to be balanced daily, weekly and monthly.
Accounting records – from receipt books and cash books to sales journals, purchase journals, general ledgers and trial balances – were drafted by hand, and were given to a typist by the auditors to type up a set of financial statements.
It gave accounting and accountants a certain aura of mystery. How did they take the vast amount of information and compile it, summarise it and present it as a concise summary of your labours for the year? They were revered and held in high-esteem.
And then came cellphones, the internet and laptops. Manual accounting gave way to accounting on computers. Nevertheless, your information was stored on a laptop or a server, and only the accounting gurus had access to the systems. They could produce what used to take weeks and months in a flash.
Even though we are living in the information revolution, it baffles me why so many companies are still doing their accounting on remote laptops. Why, in this day and age, is information still taken away to be processed? Why do you still wait weeks – if you’re lucky – to have your accounting records available so you to see what you have done, and what you have achieved? Is it being done this way, because it was done that way last year, and because the audit file says so?
So what is “cloud accounting”? I guess it’s called cloud accounting because, like angels that are in the clouds, this modern miracle of accounting shares the clouds with the angels. What? Your information and the results of the days’ operations available on your mobile phone, in a format that you can understand? A dashboard that allows you to keep your vital information and key performance indicators at your fingertips? What magic is this?
No, it’s not. It’s here, it’s real, it’s affordable, and it works. You have a clear view of your current financial position in real time. If you’re an accountant, your clients can easily connect you to their portfolios and records. You can give them advice on relevant information.
Your information does not go missing, because there are automated back-ups that are uncomplicated and cost-free. Time is saved with automated payments for recurring costs, not to mention that you can facilitate a paperless environment and declutter your office. Information is shared easily and quickly. There is no emailing back and forth, or sharing USBs.
The real beauty is the ability to access real-time information – live bank feeds and up-to-date reconciliations. Your transactions are recorded as you go.
You can now swiftly transfer information and complete your tax return templates.
With the pandemic and staff working from home, we have become, in the past 100 days, accustomed to working remotely. If the remote access of records has become the norm, why not the same remote access to accounting information and documents? It can, and it works.
There may be some initial costs to set up your cloud accounting system and to transfer the data, and some pain to reconcile between the old and the new systems, but thereafter there is a real-time reduction in your business costs. You can cut down costs as a result of software version upgrades, system administration costs, server failures, and IT staff, and you need fewer people to do the same work.
Whether it’s Xero or Sage, or some other product, there is an online package that will meet your needs and your pocket. All you need to do is be bold and hungry enough to demand access to your information in real time. And remember why a lion is at the top of the food chain and not the Trex. If your bookie is a mummy, then perhaps it’s time to seal the tomb. Find a lion, a cheetah or some other agile predator that is as revered today as the manual accountants of the 1950s, 1960s, 1970s and 1980s. Viva information, viva.