While in the past it may have been cost-prohibitive for small businesses to achieve the same level of accounting efficiency and expertise enjoyed by large enterprises, recent advances in online accounting software have placed small companies on par with larger competitors in the area of financial management.
Cloud Technology vs. Building Your Own Accounting System
Many large companies build their accounting system in house, requiring trained IT staff, data servers, security software, and expensive hardware — luxuries many small businesses cannot afford. The software as a service delivery model of cloud accounting, however, offers small businesses access to the latest financial management technology without the need to invest in costly hardware and security infrastructure — requiring only a monthly subscription fee that won’t break the bank.
No Accounting Expertise Required
Small businesses often lack the resources to hire accounting professionals full time or even to regularly engage outside consultants on a contractual basis. While online accounting software isn’t intended to replace a professional accountant’s role, the easy-to-understand reports it generates can help small-business owners with little or no financial training make critical decisions regarding company management. And as year-end approaches, small-business owners can grant external accountants or auditors access to their instance for tax filing and financial reporting purposes.
Immediate Access to Innovation
Large companies may employ a full-time IT staff to manage their system update process and deal with bugs. In the past, small companies were at the mercy of the maker of their accounting software whenever they wanted a newer version, forced to purchase an update or install new software (which may also have required additional hardware updates) to gain access to new features and functionality. With cloud-based technology, software updates are included in the cost of the online subscription, giving users immediate access to new versions at no extra charge.
Older accounting software packages designed for small businesses often limited installation to just one computer. Now, cloud accounting offers Web connectivity to multiple users through laptops and smart device apps accessible via a Wi-Fi network. This brings small companies closer than ever to large corporations employing enterprise resource planning (ERP) systems that include detailed expense tracking modules. With online accounting apps, employees of small businesses can record travel expense data and new customer information in real time, rather than waiting to turn in paperwork when they're back in the office. Plus, integrated scanning capabilities allow for forms and receipts to be attached to expense reports before they're lost in the shuffle. These mobile applications can increase efficiency and save hours each month over manual compilation, giving employees more time to focus on their job.