Is cloud accounting right for your business?

Cloud accounting allows SMBs to develop streamlined, powerful and always-on processes that integrate with a full suite of business software

It’s an understatement to say that accounting is a major challenge for small business owners. Accounting systems can help streamline and connect such detailed processes as maintaining records, processing invoices, and managing payroll.

With new types of cloud accounting software, however, these organizations now have access to the same digital resources as large enterprises. Cloud accounting enables small business owners to develop streamlined, powerful and always-on processes that integrate with a full suite of business software.

The big question, however, is whether cloud accounting is the right solution for your business, and if so — when is the right time to transition between systems? Companies that take different paths to adopting cloud accounting may have equally strong results.

When a company begins to scale

Chris Tunstall

Chris Tunstall of A Bar Above uses cloud accounting software to simplify his company’s operations.

Founded by husband and wife team Julia and Chris Tunstall, A Bar Above teaches bartenders how to become high-end bartenders. The Tunstalls created Web-based tutorials to help bartenders improve their skills.

Julia Tunstall runs A Bar Above’s business operations, which means overseeing the accounting. (She also holds a full-time job as a real estate consultant.) She has been using accounting software from several companies, but found the products buggy and lacking in customer support. As she formalized the books for A Bar Above in 2013, she was unwilling to invest time in offline products and began looking for cloud-based alternatives.

“In my opinion, the offline products tend to be older, more enterprise-facing solutions,” explains Tunstall. “They are accountant friendly but don’t make an effort to simplify bookkeeping.”

As A Bar Above grew, Tunstall and her husband hired an offshore assistant to help with some recurring business support tasks.

“Since I planned to transition some of our bookkeeping support to her, it was vital that our online business’ accounting software be cloud-based,” she says.

Tunstall explains that cloud solutions are ideal for business owners who need access for multiple users and don’t want to pay for a full, local software installation for each device on the business’ network.

“Many are also mobile friendly, which can be useful for small business owners when trying to track expenses on-the-go,” says Tunstall. “For us, the most important element was the ability to seamlessly share a company file with our team members located abroad.”

When integrations become a priority

Ashleigh Hansberger, co-founder at branding firm Motto, started her business in 2005 with a software-based accounting system. Hansberger and her team even upgraded to the online version of that software, but found the program difficult to manage.

“We got so tangled up in it, and it often led to incorrect financial reporting,” says Hansberger. “Not to mention, the interface and support are terrible. And it didn’t integrate with our online invoicing system.”

In 2013, Motto switched to a cloud-based accounting system.

“The software we chose imports, codes and reconciles our bank accounts, credit cards and PayPal transactions,” says Hansberger. “There is a connector that syncs our different cloud-based systems together.”

She finds that while these systems are “intuitive” and “user-friendly,” it is worth working with consultants who are well versed with these systems.

“When we switched to a cloud-accounting system, that also means that we switched our CPA because our previous firm had no experience with cloud systems,” says Hansberger. “We found an amazing CPA who is an expert with cloud technology to help us through the transition and with bookkeeping, accounting and tax preparation.”

Choosing systems wisely

Tunstall encourages business owners to carefully evaluate any decision regarding their accounting software.

“A vital function for one of our other businesses is not available with any cloud-based options,” she explains. “Not to mention, the data isn’t readily available when you’re offline — so you can manage accounting functions when you’re not connected to the Internet.”

A non-cloud solution can be beneficial for business owners with multiple companies — business owners will pay once for software that they can use for different organizations. With cloud accounting software, a separate account will likely be necessary for each type of business.

Tunstall also encourages business owners to be vigilant about their data.

“There’s always a risk that any cloud solution will get hacked and your financial information compromised — so it’s important to think about all options before making a decision,” she says.

Ritika Puri
Ritika Puri is a San Francisco-based blogger who covers the intersection of data, sociology, and technology. She transforms marketing strategies into revenue-generating growth engines.
Ritika Puri
Ritika Puri
Ritika Puri
Tags: Business Management,Cloud Computing,Data Center,Entrepreneurship,Productivity,Technology