Bookkeeping has always been a vital component of sound financial management. However, the methods by which businesses maintain their books have evolved rapidly over recent years. Traditional paper filing cabinets and static spreadsheets are fast becoming a thing of the past, as quickly evolving cloud-based systems become integrated with every aspect of the business.
The most advanced and exciting product category includes new breed bookkeeping apps, led by the likes of Xero, MYOB and QuickBooks, where the functionality extends beyond traditional accounting. Both large and small organisations are now using cloud services, in addition to outsourced bookkeeping services, to gain real-time visibility of their financial performance.
Top cloud-based bookkeeping solutions
The key difference between cloud bookkeeping and the way organisations used to manage their finances is that all information is stored and updated online in real time. Financial records are encrypted and accessible from anywhere, so there's no more waiting till the end of the month to see what happened. Additionally, today's software can sync with payroll, inventory, and even your CRM to become a one-stop shop for your finances.
Automation is a handy feature that drives this shift. With bank feeds automatically importing transactions and tools that instantly extract data from invoices and receipts, even reconciliations become less of a chore and more of an accurate way to keep records on hand. Users can also create on-the-spot reports rather than waiting for monthly and quarterly closes.
Seamless integration with Xero, MYOB, and QuickBooks
● Xero
Xero is a leading cloud-based accounting software popular with many businesses and accountants. It offers an easy-to-use interface along with an extensive integration platform that includes full accounting features. The platform is excellent for small and medium-sized businesses. Users can view their company's finances in real time with Xero's simple dashboard.
The platform offers automated invoicing, live bank feeds, and automated financial reports. It also has the ability to integrate with hundreds of third-party apps to suit a variety of industry-specific needs.
● MYOB
MYOB was specifically developed with Australian and New Zealand businesses in mind. It includes a strong payroll feature set that can be paired with the eXtensible Business Reporting Language (XBRL) and other native compliance management capabilities. The result is an all-in-one accounting software that works seamlessly with built-in inventory management and job costing.
The emphasis on accurate reporting gives MYOB an advantage over many other platforms, and the option to integrate with more specialised tools has created a viable alternative for a variety of niches. Xero and QuickBooks also have versions designed for the Australian market.
● QuickBooks
QuickBooks Online is a cloud-based accounting solution with options available for small and medium-sized businesses. It has a range of user-friendly tools and real-time reporting, which allow accountants and business owners to gain a snapshot of their cash flow. QuickBooks is often an excellent choice for cost-effective scalability.
The platform has access to bank feeds as well as options to connect directly with financial institutions for even faster updates. There are also various reporting capabilities, such as payroll, expense tracking, and bank reconciliation.
Cloud bookkeeping’s evolution in practice
Cloud bookkeeping takes everything an organisation needs to manage its books and makes it more efficient and accessible. It’s important to keep financial data organised for several reasons. Businesses and accountants aren't the only ones who need that information when tax season rolls around. Leaders can take advantage of the visibility of financial performance to monitor income, expenses and investments on an ongoing basis. They can identify trends that may need intervention.
Cloud bookkeeping offers a number of improvements and updates over traditional methods:
● Manual data entry and transaction reconciliation are both time-consuming tasks. Thanks to automation, staff can now spend their time focusing on more meaningful tasks without sacrificing quality or accuracy.
● Collaboration used to be hard. Now, teams that may be spread across multiple locations can work with the same records simultaneously and without version conflicts.
● Insights take too long. With cloud bookkeeping, real-time data is always up-to-date, so it no longer takes until month-end to identify issues.
● Financial records are at risk without the proper backups. Automatic cloud storage keeps data safe and secure.
● Cloud bookkeeping often integrates with payroll, inventory, and other applications as well. This minimises the number of siloed systems teams have to manage simultaneously, and it also makes reporting simpler and more insightful.
● Reporting can take much less time. Many platforms enable the creation of real-time reports that can be shared internally or with lenders and investors without delay.
● Businesses can access the tools they need without a significant investment. Scalable subscriptions mean that there’s no need to wait until a company is large enough to justify hiring full-time finance staff or making major investments.
The future of bookkeeping
Cloud bookkeeping will likely continue to improve and become more integrated into an organisation’s workflows. Areas of focus may include more AI and machine learning to refine predictive capabilities, such as cash flow and spend anomaly detection, as well as new integrations. Businesses should prepare for a future where cloud bookkeeping is deeply integrated with all their operations. It’s no longer just a matter of efficiency, but also a way to stay competitive and agile.
As global trade continues to become more digitalised, it’s only those organisations that see these changes as a key part of their strategy that will have any chance of adapting, recovering and prospering in the future. Businesses that adopt cloud-based and offshore accounting services will be better equipped to confront these issues head-on.