Cloud Accounting & Outsourcing: Driving Efficiency & Growth for Businesses

Key Takeaways:

• Cloud accounting uses cloud-based software to manage your accounting processes and financial data, allowing you to focus on growing your business with access to real-time, forward-looking data.
• Access to a cloud accounting platform alone isn’t enough. You need an expert team to deliver cloud accounting services so you don’t miss key financial insights.

In recent years, cloud accounting has been trending in outsourced accounting. Like most forms of outsourcing, cloud accounting aims to take over non-core business activities. That way you, the small- to medium-size business owner, can focus on growing your business.

However, cloud accounting should not be confused with outsourced bookkeeping or accounting staff augmentation. It also should not be confused with cloud bookkeeping.

What Is Cloud Accounting & How Is It Different than Outsourced Accounting?

There are two main differences between cloud accounting and these other outsourcing options (outsourced bookkeeping and accounting staff augmentation):

1. Cloud Accounting Is Automated

First, cloud accounting utilizes state-of-the-art cloud-based accounting applications that are seamlessly integrated with your bank accounts and other cloud-based systems, including:

• Ecommerce platforms
• Bill pay solutions
• HR/payroll systems

The reason for this integration is to decrease the cost and time required to gather accurate financial data. This is especially important to small businesses, where order sizes are often high in volume but low in dollar amount, making it financially burdensome to pay someone to log into a desktop-based system (like QuickBooks desktop) simply to enter, upload, or reconcile accounting transactions.

Cloud-based solutions automate the flow of business data; it is near real-time and the acquisition cost is inexpensive.

2. Cloud Accounting Is Future-Oriented

The second, and perhaps more important, differentiator is that cloud accounting includes industry and managerial accounting expertise to help businesses understand the accounting data. Consequently, these businesses can make critical, forward-looking decisions with the data.

More traditional accounting outsourcing solutions focus on making sure the historical financial performance is correct and tax returns are accurate. Cloud accounting includes industry specific reports, KPIs, and dashboards delivered by knowledgeable accountants who have expertise relevant to operating and growing a business. With cloud accounting, effort is not wasted on gathering and reconciling old data; it is focused on analyzing data for decision-making.

Top 5 Reasons to Use Cloud Accounting & Outsourced Expertise

Is cloud accounting right for you and your business? Here are five of the top reasons businesses benefit from a cloud accounting solution:

1. You do not have the personality, patience, or education to be an accountant or bookkeeper.

Let’s face it: You are not an accountant. You are an entrepreneur and a leader focused on increasing sales, bolstering profits, and building your team. It takes a special type of individual to make sure customers are invoiced, bills are paid, payroll is handled, and the books are closed.

Cloud accounting software helps automate many of the mundane tasks of bookkeeping and accounting. However, the books and records need attention every day, month, quarter, and year you are in business. This is why individuals with a passion for the task –career accountants and CPAs – provide cloud accounting services. Your job is running the business; their job is handling the accounting.

2. You want help determining the best course for your company.

Running and growing a business is not easy. Markets evolve, the economy varies, and the federal and state regulatory environments change constantly. It can be daunting to take it all in and make the right decision about the next step. A bookkeeper can help to an extent, but their focus is typically historical or reactive as opposed to forward-looking and proactive. An income statement and balance sheet provide some insight, but what you really need is a budget and a solid cash forecast. You need to know which metrics are important to your industry and business. You also need to know how the latest employment law or tax change will affect you. 

Cloud accounting services are typically delivered by individuals with experience as managerial accountants, controllers, or CFOs. Moreover, when cloud accounting is provided by a leading public accounting firm, you have access to a network of CPAs with experience in a wide array of areas ranging from tax and benefits to corporate structuring and capital markets.

3. You do not want to hire anyone.

You may consider hiring a bookkeeper, controller, CFO, or all three. However, solving a problem by hiring creates a host of problems that then need to be addressed. At the top of the list is the cost. In today’s job market, good people do not come cheap, not to mention the cost of providing good benefits and perks to these people.

Perhaps you’ve considered giving options or stock to lure a candidate. This may seem like a good decision initially, but as the value of your company increases, so does the cost of that hire. There is also the hidden hassle of dealing with another personality in your company. Will they show up on the first day? Will they fit in with the rest of your team? Will they quit and leave you in a bind? Will they underperform and need to be fired?

Cloud accounting is typically provided on a monthly subscription basis with simple cancellation terms. If you don’t like the service or see its value, you cancel.  

4. You don’t have money to waste.

Growing a business takes money and effort, and most businesses can’t waste either. Essentially, you have three choices:

The first is to do it yourself or hire an hourly bookkeeper. This might not cost many dollars, but consider the time and opportunities lost as you focus on non-core activities.

At the other end of the spectrum, there is hiring an accountant and/or CFO. As previously mentioned, this is not an inexpensive path, and it includes hidden costs and time demands.

Cloud accounting is the third option. A cloud accounting solution costs less than hiring staff but provides all the value you’d expect from a full-service accounting team, including a bookkeeper, controller, and CFO. 

5. You want to focus on your business and your life, not on your accounting.

You started your business because you wanted to be in control of your life. You have worked nights, weekends, and holidays to get things off the ground. Now that success has been established, you are working harder than ever and spending all your time on the business. Still, you don’t seem to “get it all done.” You understand the importance of clean financials, both for control of your business and from a company valuation perspective. Therefore, you spend non-business hours and weekends dealing with the accounting instead of enjoying your life and taking advantage of much needed down time.

With cloud accounting, you are hiring a company and a team of individuals to worry about the books. Additionally, cloud accounting software is web-based and smartphone-enabled. If you want to review reports or approve a bill, you can do it all from your phone. Gone are the days of pulling out a laptop and dialing into a remote desktop.

Cloud Accounting Is a Behemoth Advancement in Technology, So Don’t Miss Out

Advances in technology can have a significant impact on the way we live and interact with the world. Consider how Amazon, Google, Facebook, Airbnb, and Uber have radically changed shopping, marketing, socializing, and travelling. The evolution of cloud accounting services is on track to have a similar impact on the way small- to mid-sized businesses operate.

Envision a future where you focus on growing your business and someone else is focused on your accounting. Now is the time to learn more.