WHAT IS CLOUD ACCOUNTING?

Published 12 September 2018

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Of the, currently, nearly 50 providers identified by HMRC of Making Tax Digital (MTD) software most offer "cloud" accounting packages.

Moving to "cloud" accounting can help you run your business more effectively, and efficiently, but first let's explore what "cloud" accounting is.

So what is Cloud Accounting?

In today's day and age we all use the cloud on a daily basis, from storage solutions such as iCloud and Google Drive to streaming services such as Netflix, the cloud is all around us and there is no getting away from it. We use it for the majority of things we do every day.

Cloud accounting is nothing new, in fact it's been around for a few years now. First and foremost it is a bookkeeping software just like you have always been used to as a business owner however it now utilises the cloud to save your data and allow you access from anywhere in the world.

Desktop solutions which have been the norm for so long are quickly being overtaken by the cloud accounting solutions as progressive, forward thinking, businesses have been quick to embrace this method of working.

Companies such as Xero and QuickBooks Online offer solutions that enable you to give access, restricted to the areas that they need, to both your team and your accountant. This enables real time collaboration across multiple members from anywhere in the world.

Usually accessed by a web browser cloud accounting packages can be accessed on different operating systems (MacOS or Windows etc.) across a multitude of devices (Mac, PC, tablet and smartphone) bringing a greater flexibility across how you are able to access your data.

And because everything is stored in the cloud there is no need to create backups of your data and send it to your accountant to do their work, and there is also no need to stop working on the data as has sometimes been the case too. Everyone can keep working, and doing what they need to do, with the system all the time.

How does cloud accounting affect me?

If you fall under the MTD legislation (initially VAT registered businesses above the VAT threshold) then from 1 April you will need to move to one of HMRC's recommended solutions or risk penalties being imposed from HMRC.

The next 6 months, before the introduction of MTD, would be a great time to assess the software and implement the preferred solution in your business. Which would also give you time to receive training, and get familiar with, the cloud solution that you have chosen.

Give us a call on 01254 300 050 for more information.