Now it's time to keep your head in the cloud
Book-keeping is now easier and more up to date thanks to cloud accounting, writes Carolyn Boyd.
WHEN Duncan McIntyre wants to check on the accounts of his two small businesses - one in Australia and one in the US - all he needs to do is put his feet up and go online to see real-time details.
McIntyre is one of a growing band of small business people turning to cloud accounting, drawn by the ability to obtain up-to-the-minute information and invite their bookkeepers and financial advisers to be able to view, and if necessary edit, information from afar.
"I was doing spreadsheets at first when I first started my business," says McIntyre, who runs Branding By Air, an advertising company that offers aerial displays including helicopter banners.
Moving to cloud accounting means McIntyre no longer needs a bookkeeper as the Xero software he uses can easily be navigated by his own staff.
The way McIntyre works with his accountant has also changed. "If I ever need anything they can jump in and help me out and fix it up very quickly without having to organise a meeting - obviously everyone's time is pretty precious these days," he says.
"We have what's called a CFO meeting once a month and they're my remote financial officer, I guess - we just catch up once a month and look for shortfalls in cash and where there might be some issues with the end of the month coming up, and different financial things we want to do."
The cloud program's ability to reconcile with McIntyre's bank account and credit card has cut administration, as has the ability to attach copies of invoices to records in the system, meaning McIntyre no longer needs to print out paper copies.
Guy Pearson set up his business, Interactive Accounting, two years ago. He wanted to offer an accountancy service that worked with customers using online accounting programs.
"When I first started I was pitching our business, what we did, to people who had a paper-based system, even Excel spreadsheets," he says.
"[Now] they tend to hunt us down."
After clients switch over to online accounting, they usually find two things, says Pearson - that they have more time because their record-keeping becomes simpler, and that they can access current business data.
"They get what happens today in their business, which is kind of important if you want to make a decision.
"Most people at the moment wait till the end of the quarter or business term - sometimes even a year - before they actually go and do their bookkeeping or their accounts to actually figure out how they went."
Some businesses have chosen a hybrid online solution.
Miranda-based finance consultancy Angus Marks uses online storage facility Dropbox to transfer files to a bookkeeper, who enters them into MYOB and uploads reports.
Angus Marks' managing director Mark Moentin, who also heads up the Miranda and Districts Chamber of Commerce, says: "If you have got MYOB, we believe this is a great model to work with your current bookkeeper and accountant, and then work your way to be fully integrated."
Maria Cook, executive officer of the Business Enterprise Centre Southern Sydney, is yet to see many of her clients switch to cloud accounting. But she says an up-to-date picture of the financial state of a business could save much heartache.
"Financial management - or the lack of it - is responsible for most business failures," she says.
"Very few small businesses actually have a good strategic chart of accounts, which helps them to make strategic financial decisions and very few understand that they need to look at those finances and [their] pricing on a monthly basis."
Cost of cloud accounting:
■ MYOB from$23 a month myob.com.au
■ Xero from$29 a month xero.com
■ Saasu from$9 a month saasu.com