Small businesses and sole traders could halve the time they spend managing their financials and focus on growth and innovation if they embraced cloud accounting software systems, a tax specialist from advisory firm BDO says.
Christian Schoener, a senior manager specialising in information and communication technology solutions for small to medium enterprises, told StartupSmart entrepreneurs could be more confident and adept at managing their cashflow.
“One of the reasons why businesses fail is they don’t have the kind of data needed to make the decisions they need to on a day-to-day basis,” he says.
“Cloud accounting systems put owners in the driver’s seat with the information they need to know to make the right decisions.”
Schoener says the integrated updating capabilities of cloud accounting cashflow means business owners have a better understanding of how much money is coming in, going out and available.
Older accounting software systems are usually managed monthly or limited to quarterly BAS statements outsourced to an accountant.
“Currently, many small business owners log their receipts at month’s end, which means data used to make business decisions is late by the time it is captured,” Schoener says, adding this is especially an issue for the many small business grappling with.
He says this is problematic for start-ups and sole traders, who often need to make investments as they grow, rather than in predictable intervals.
“The biggest benefit is accessing the data at anytime and anywhere whenever the business owner needs it. It helps you assess your profitability of your business. By managing it online, you’ll have a better understanding of your cashflow. You won’t be relying on information that is a month or two old.”
Schoener says the main concerns small business owners have about cloud accounting come down to cost and data security.
According to BDO research, most small businesses don’t require more than basic functionality and says the average cost can be around $30 a month.
Schoener says data security issues are harder to reconcile for many business owners.
“I think it’s fair enough to be concerned about data security. Most companies do store data on multiple servers, including ones out of Australia. But once you work out what you need, sitting down with a qualified and realistic advisor will help you find the right option for you.”
This article first appeared on StartupSmart.