Chances are that you and your employees got a crash course in working from home during 2020. If so, maybe you discovered the limitations of on-premise license software and, like many other businesses, are migrating business operations to the cloud.
The trends that are driving the shift to subscription-based software have only been accelerated by COVID-19. Software-as-a-service (SaaS) has long been the largest segment of the $258 billion cloud services market. Worldwide SaaS revenue was roughly $102 billion in 2019 and Gartner forecasts growth of nearly 38% to $140.6 billion by 2022.
Cloud-based applications have fostered tremendous improvements in processes that are traditionally manual and time-consuming. And yet, despite the growing adoption of cloud-based applications, monthly and year-end accounting remains a largely manual, inefficient process for many small businesses.
Increasingly, small businesses are discovering the benefits of moving their accounting into the cloud. When you’re operating your business remotely, the ability to instantly access your books from anywhere is a necessity. But even if your workforce is back in the office, at least part time, cloud-based accounting can be a game-changer. Accounting data and functionality that is always available on any device means fewer interruptions in the sale-to-cash cycle, which can give a much-needed jolt to a sluggish revenue cycle. Some accounting platforms also have built-in dashboards that present real-time financial data, which can be used to develop key performance indicators. Most important, businesses thrive when they have quick access to accurate, up-to-date financial numbers.
Selecting the Right Cloud Accounting Software
Business owners who are evaluating their accounting software or considering an upgrade should ask the following questions to make sure the platform will live up to its own buzz.
- Does the platform integrate with all of my financial institutions’ daily feeds? On-premise accounting software typically allows users to import a comma-separated values (.csv) file of bank transactions, but those transactions are usually at least one day behind. A cloud-based platform that allows bank and credit card transactions to flow automatically into the general ledger means businesses can capture real-time, accurate financial information in the most efficient way. Additionally, cloud-based platforms often eliminate the need for a human to touch the data — thereby improving both the integrity of the process and the accuracy of the numbers.
- Do I need to pay for separate licenses for each user? Perhaps the ultimate inefficiency is paying more money than necessary. Most on-premise accounting software requires users to purchase multiple licenses — along with the hardware to maintain the data. With cloud-based accounting platforms, users typically pay one fee for unlimited users, and it includes data backup and maintenance. Be sure to ask about the levels of permissions the platform allows, since segregating duties (such as approving invoices and accounts payable) can help reduce the risk of fraud and errors.
- How can we leverage real-time data to develop performance metrics and benchmarks? Making accounting processes more efficient can allow business owners and their accounting advisors to leverage real-time data to make better decisions. Ask your advisor to help you understand dashboards that, along with the proper software add-ons, can transform key performance indicators into key predictive indicators.
Even when the pandemic is in our rearview mirror, the pace of change will continue to accelerate. Don’t be left behind.Embrace the tools and the processes that will allow your business to continue to thrive in times of uncertainty and in times of opportunity. Contact CRI to learn how we can help you implement the right accounting software for your business — plus access real-time data to continually move your business forward.