Computers traditionally used desktop accounting packages for record keeping. The last few years have seen an increase in small and medium sized businesses (‘SMEs’) looking for cloud based accounting solutions to manage their bookkeeping and VAT returns, and occasionally for payroll as well. Cloud accounting also tends to be the favoured option for overseas companies setting up operations in the UK.
Cloud based services use Software as a Service (SaaS) model whereby the company pays a monthly ‘subscription’. This can not only save large up-front fees but also ensures that the information is stored securely. The data is also accessible from virtually anywhere in the world subject to having an internet connection. Many online packages also offer apps for smartphones or tablets which means business owners can review their financials ‘on the move’.
Here, I briefly look at the two most commonly used (by our clients) cloud accounting solutions.
Xero has become a hugely popular solution for SMEs in the UK and is favoured by most of our clients. There are three plans to choose from* - £10 for a starter plan, £22 for a standard plan and £27.50 for a premium plan. Each plan offers the basic functions - ability to generate quotes, invoices, purchase orders and bills, handle automatic bank reconciliation, import data from Excel, Google Sheets and CSV files. The more expensive the plan, the more functions are available. The key difference between a standard and premium plan is that the premium plan offers a multi currency operation. Xero also works with a host of other apps to help streamline bookkeeping and other business administration tasks.
2) QuickBooks online
QuickBooks is popular in the US and is used by some of our US clients who have UK operations. It is also used by some of our UK based clients. Like Xero, there are three plans available* - £6 for self –employed, £15 for an Essentials plan and £25 for a plus plan. Each plan offers incremental functionalities with the increased plan price. QuickBooks also works with a host of other apps to make accounting easier! On a more technical level, QuickBooks currently works on iPhone, BlackBerry and Android, and on desktop it works with Chrome, Firefox, Internet Explorer and Safari.
Cloud accounting is not a one size fits all service, so some packages may be more suitable for particular businesses than others. It is therefore always worth speaking to your accountant before you take the plunge. If you are a small to medium sixed business and still maintaining your accounting records on a desktop solution, you should be asking yourself why you’re still doing that. Is it simply because you don’t know of the alternatives or are you worried about change? Professional firms like Alliotts offer cloud bookkeeping solutions as part of our outsourcing services. We can be as involved as the client likes – in some instances, they only want us to handle month end/ quarter end reporting whilst in other instances, they want us to provide a suite of services including bookkeeping. This allows the business owner to focus on growing the business whilst we look after the finances which the business owner can access at any time. If you are thinking of taking up a cloud accounting solution, please speak to us.
*Information correct as at date of publication