The benefits of managing your accounts online

Over the last 50 years, we have seen radical changes in the way we record and maintain our accounts and books. The ‘evolutionary stages’ have included traditional hard copies, recorded data tapes, floppy discs, hard drives, CDs, DVDs and USB sticks. We’re now about to enter yet another era of data management, which is bound to have consequences for the way we store and update our accounts: Cloud Computing.

In layman’s terms, cloud computing allows you to store and retrieve files, as well as run computer programs, straight from the internet. This means that data or information that would have previously been created and saved to a computer’s hard drive (or to a removable data storage device like a CD or USB stick) is now created and saved on the internet or is automatically uploaded straight to the internet. In other words, any device that is connected to the internet (and which has the necessary access permissions) can also access, amend or upload this information to a centralised cloud account.

New software accounting packages, like Prelude Accounts, have been designed to take advantage of the benefits of cloud computing for their users. So what precisely are these benefits?

1) Your Information Is Safe Part 1: Everything is automatically backed up and off-site

As little as 20 years ago, if your work computer was stolen or seriously damaged in any way, you would have irretrievably lost all the information that was stored on it. The more organised among you may have backed up your information and taken the backup copy off-site, but that was then a time-consuming process that many people would put off until it was too late.

With cloud computing, your information is not physically stored on your property, but on multiple, secure servers that relate to the particular software program that you are using. This means that your information is perpetually stored and backed-up, meaning that you will never lose your information ever again (bar some form of near-apocalyptic event to befall the whole internet).

2) Your Information Is Safe Part 2: Everything is encrypted and password protected

While the notion that all your information is stored in an ephemeral manner on the internet, and stored in different locations, may alarm some, it really shouldn’t. All of the best online cloud computing programs have secure accounts with encryption and password options.

Not just anyone can access your information; it can only be accessed using approved user accounts (i.e. username and password protected) and (in some cases) only using approved devices or even from approved locations. No computer system on Earth is 100% secure, but cloud computing allows for clearer traceability of who has accessed or amended your information than comparative traditional methods.

Indeed, if you think of recent scandals of sensitive information being retrieved from stolen computers or lost USB sticks, cloud computing is by far the more secure option.

3) Accessing your information has never been easier or more universal

Whereas traditionally you could only review your books or accounts by actually looking at a balance sheet in a physical ledger or by reviewing a spreadsheet on a desktop computer with the necessary accounting package, cloud computing gives you far greater options as to how and when you can review your bookkeeping.

For one thing, cloud computing means that you do not have to install a software package onto your computer(s) or device(s) – most online programs run within your web browser (e.g. Internet Explorer, Firefox, Google Chrome). Therefore all you need is a robust internet connection, a suitable computer or mobile device and the necessary access permissions to get in.

This means that wherever you have an internet connection, you can get to your accounts or books.

4) You can update your books in ‘real time’

Given that you can access your accounts anywhere (assuming you have an internet connection), you can now amend your accounts at any time.

Why wait until you get back into the office to record a payment or to post an invoice? You can now do so on the move, meaning that you can do so while the matter is fresh on your mind and it also results in less bookkeeping work piling up in the background.

Of course, by taking this approach, it will ensure that your books are consistently up-to-date, which saves a lot of stress come the end of the tax year.

5) The best online accounting packages streamline other accountancy processes

The best online accounting packages make the most of being connected to the internet, and help to streamline the accounting processes to save you time when running your business as well as saving you the stress of any additional work.

For example, Prelude Accounts allows the user to generate a customer invoice which is automatically logged on the online ledgers and which is also sent out as an e-mail to the intended recipient. Three separate processes have become one.

6) It has never been easier for accountants and their clients to share information and reports

Both accountant and client can have simultaneous access to the books and accounts being maintained via online cloud accounting software.

This enables and empowers an accountant to review their clients’ books for housekeeping purposes, picking up on irregularities or wrong entries as and when they occur.

For the client, they can easily share or query any aspect of their books with the accountant quickly online.

7) It has never been easier to produce reports for HMRC and other statutory authorities

By using online accounting software on a day-to-day basis, and by having an accountant to regularly review the books online, the end of year tax deadline needn’t be the dreaded event that it once was. A mixture of self-discipline, online streamlining of processes and ‘real time’ accounts (all made possible through online accounting software) takes the sting and the pain out of maintaining your company’s financial records.