The cost savings of using Cloud Accounting
Scottish small and medium-sized businesses (SMEs) face many challenges, and one of the most significant is managing their finances. Traditional accounting methods can be costly, time-consuming, and error-prone. However, Cloud Accounting is a cost-effective alternative that offers multiple benefits.
In this article, Martin Kerr explores the cost savings of using cloud accounting and why it is the smart choice for SMEs.
The cost savings of using Cloud Accounting: reduced IT costs
One of the most significant cost savings that cloud accounting offers is the reduction in IT costs. Though it might seem counter-intuitive, with traditional accounting software, small businesses need to buy and install software on each computer, as well as invest in hardware and servers. This can be a considerable expense, especially for micro businesses.
Cloud accounting effectively eliminates these costs, as the software is hosted on the cloud, meaning you can access it through any device with an internet connection. This not only saves money but also frees up valuable resources that can be used elsewhere in the business.
Cloud Accounting can reduce hardware and staff costs
Cloud accounting significantly reduces hardware costs as there is no need for on-premises servers, expensive hardware, or specialised IT staff. Instead, all you need is an internet connection and a device such as a laptop, tablet or smartphone to access the software. This means SMEs can save money on hardware costs, and invest in other areas of the business, such as marketing or research and development.
Increasing productivity through Cloud Accounting
Cloud accounting offers significant productivity benefits, as staff can access financial information in real-time from any device with an internet connection. This means they can work remotely and still access financial data without needing to be located in your head office.
The nature of cloud accounting also means that more than one person can access the data at the same time making it easier to collaborate. Additionally, as cloud accounting automates many manual processes, staff can focus on higher value-added tasks, resulting in increased productivity and efficiency.
Cloud Accounting cost savings: reduce errors and the costs associated with manual processes
Manual accounting processes are time-consuming, prone to errors, and can lead to costly mistakes. Cloud accounting automates many of these manual processes, such as data entry and reconciliation, reducing the risk of errors and costs associated with team members spending time processing data. Additionally, cloud accounting software can integrate with other business systems such as invoicing and payment processing, eliminating the need for manual data entry, resulting in further cost savings.
Cloud accounting provides real-time financial information that enables small business owners and managers to make faster and better-informed decisions. For example, if a small business needs to apply for a loan, it can easily access its financial data to make a more compelling case to lenders. This saves time, reduces the need for manual reporting, and streamlines the decision-making process.
Since April 2022 all VAT registered businesses have been required to comply with the new Making Tax Digital rules. Essentially, they must keep digital records and submit VAT returns to HMRC via software. Using cloud accounting software helps VAT-registered businesses remain compliant with the Making Tax Digital legislation and avoid penalties.
Lower energy costs and a smaller carbon footprint
Traditional accounting software requires on-premises servers, which consume a significant amount of energy. Cloud accounting reduces this cost by hosting the software on remote servers, which use less energy than on-premises equivalents. This not only saves money but also helps small businesses reduce their carbon footprint and supports more sustainable business practices.
Cloud Accounting services for Scottish SMEs
Cloud accounting offers Scottish SMEs significant cost savings and other benefits such as increased productivity, faster decision-making, and reduced errors. To find out how Consilium Chartered Accountants can help your business realise the cost savings of using Cloud Accounting, please contact Martin Kerr