When you run a business, you must keep track of money coming in and going out. This isn’t a suggestion; if you don’t pay attention to your finances, you’re essentially flying blind. It’s important to keep accurate financial records, and luckily there are lots of different programs and systems available to help you do so. Software like Quickbooks makes it easy to manage your input and output, generate invoices, and be aware of how your money is being spent. There are two general camps for accounting programs: desktop and online. Which one is right for you?
Lots of small business owners use desktop accounting software; it’s been a popular option for many years. Historically, desktop software has generally been more powerful, and you only need to pay once in order to own it. Since it doesn’t need an Internet connection to function, business owners can use it without worrying about connectivity issues.
However, there are a lot of issues which come with desktop software. Confined to a single computer, these programs are often very expensive and require some training to understand and use effectively. And in the increasingly connected digital age, having all of your financial information in one single place can be a hassle; if you’re traveling, you cannot access it. Desktop software needs to be updated and repaired regularly, and it’s difficult to share files between computers. The manual nature of desktop accounting software means that all errors and issues are squarely in the user’s hands; they must input data line by line, which can lead to user error, and must also remember to back up the information regularly. If the computer dies or the hard disk becomes corrupted, you risk losing all of your financial records—a devastating problem for any small business.
Moving to the Cloud
Cloud software, also called software-as-a-service, is often far more flexible—even if it means giving up a few features. Rather than paying a lot of money up front for a system you may not even like, most cloud accounting programs are run on a subscription basis, giving you the chance to try out the features and cancel at any time. One of the biggest advantages of cloud accounting is automation. You can connect to bank accounts, payment gateways, and even management systems like Checkfront, saving you a lot of time. For instance, every time a customer makes a booking in Checkfront, an invoice will automatically be generated in Quickbooks Online if you have connected the two accounts. This significantly cuts down on the amount of manual data entry, reducing the likelihood of errors and mixups. You can also automate payments to reconcile themselves via your accounting software.
Cloud programs also automate backups and updates, which means that you don’t have to worry about them. Having a constantly up-to-date program means that you are far less susceptible to failures and security holes, and it’s far easier to have your data backed up in the cloud; if one computer fails, you can log in from another. You can log into your account from anywhere with an Internet connection, making it far easier to adjust your finances as needed.
These software-as-a-service systems do come with some caveats when compared to desktop programs, but they are rapidly closing the gap with each passing year. In the case of QuickBooks, the Online product already exceeds the feature set of the Desktop version. That said, cloud services aren’t always as powerful as desktop, as they must run on an internet connection; however, if you live in an area with even decent connectivity, this should rarely be an issue. Sharing data is very easy, but you should implement protocols to ensure that multiple users don’t inadvertently cause conflicts. Finally, cloud software requires you to store your data on someone else’s servers—and it’s important to know whether you can take that data with you when you close your account.
Common concerns about cloud software include security and privacy; it seems risky to store your financial information in someone else’s hands. But online companies incorporate security measures as part of their mandate; it’s in their best interest to keep their servers safe and backed up. In fact, they often have better security than your home computer!
There are a lot of good reasons to switch to an online cloud accounting system. Checkfront is proud to integrate with several options, including Quickbooks Online and Xero to make your business more efficient and your finances more secure.