Updated: Mar 31
Many people think that Microsoft Excel is the best way to manage their business finances. But it becomes a lot more difficult when the accounts grow more complex. Cloud-based accounting software is the best option for freelancers, sole traders, and small businesses because of its ease of use and convenience.
Microsoft Excel is a powerful and important program for businesses. It is used to manage large amounts of data. While it is a powerful and useful spreadsheet program, it is also an extraordinarily complicated one. Basic functions are easy to manage, but the more advanced you go, the more complex it gets. So, it can be time-consuming for many users.
The risks of using Microsoft Excel as accounting software
Mistakes are often made in spreadsheets.
If manual data entry, copy-paste techniques, and formula errors become a reality.
Setting up a Microsoft Excel spreadsheet for your financial needs can be exhausting. It takes a lot of time to put together the perfect reports, and it requires constant manual input. You may constantly have to add or change information on your spreadsheet.
In Excel, you should know what you want to do with the data before you start. It’s not flexible to configure it later.
As more people work with increasing amounts of data, many users are running into performance issues. This usually occurs when they combine lots of sheets or need to work with large amounts of data. Excel doesn’t integrate with other small business applications.
What are the benefits of Cloud Accounting Software?
Cloud accounting software saves time and money — a must-have for all businesses. Once implemented, you can access your financial data anywhere: whenever you need it. While the cost of good online accounting software may not be free, there are affordable options for all businesses that more than makeup for the cost in the long run.
Simplicity and accessibility. Automation makes repetitive tasks easy and saves you time. With access to all your accounts, payment and expenses can be recorded with a click with a mouse or a swipe on phone apps.
Keep your accounting organized. You never have to spend your time constantly updating cells or sheets. Your data is always up to date and organized with cloud accounting software.
A smaller margin of error. Cloud accounting software can help avoid costly spreadsheet mistakes. It also makes the process easier to find and correct errors that may happen.
A cloud is a helpful tool for storing all your data in one place. It helps you access your information no matter what device you're on, and it keeps your data safe from issues that might happen to your computer or downloaded software like Microsoft Excel.
Cloud-based software will never be outdated. Behind the software, there is a team of experts that are there to provide updates, when necessary, fix problems as they arise, and provide assistance. The updates are done in the background without the need for the user to download anything.
A quick comparison of Excel and Cloud Accounting Software
Cloud Accounting Software
This simple spreadsheet includes basic features like data filtering, data sorting, and a few built-in formulae. In addition, it has pivot table reports, formula auditing, and a few ready-to-edit templates.
More advanced features like real-time financial management, expense tracking, inventory, payroll, income and sales management, reporting, bank reconciliation, etc.
Allow you to access reports from one spreadsheet to another. You can also save your files online if you use OneDrive or SharePoint.
With a sleek, easy-to-use interface, you can find and access reports in a matter of seconds. You can also view your files across multiple devices.
Excel is not compatible with any other business applications.
Can be integrated with third-party applications.
Constricted by its basic features.
Upgrade with ease.
Lacks historical data.
You can track your company’s financial history data.
The manual entry of data is prone to errors.
Reduces your risk of making a mistake in your business by automating your accounting processes.
It always requires more than one file or spreadsheet to keep track of everything.
You can keep all your records in one place, which is easy to find and access.
Best cloud accounting software: Why we recommend them
1. QuickBooks Online (QBO)
QuickBooks Online is a subscription-based cloud-based accounting system from Intuit for small businesses. The service was launched in 2001 and has been adopted by over 4.5 million small businesses. QuickBooks bills itself as ‘smart, simply accounting software - with no commitment’. If you're looking to streamline some repetitive tasks, then QBO is for you. QBO is especially helpful for accounting processes because of its accessibility and mobility.
Just like Xero, no matter which plans you choose, you can expect certain functions included in QuickBooks Online software, including:
Income and expense tracking
Invoicing and estimates
Ability to accept payments
Bank account connection and reconciliation
Tax organization tools
Receipt capture and organization
Access for your accountant
Free mobile app
Integration with other QuickBooks apps and third-party platforms
Phone-based customer support
Since 2006, the popular accounting software Xero has grown rapidly. It is now one of the most utilized accounting tools on the market with over 2.7 million subscribers, including the UK, Australia, and New Zealand. This all-in-one accounting software is especially popular among startups and young business owners. It is known for its clean interface, which is refreshing for those who are overwhelmed by the clutter of other systems.
Overall, you can expect Xero to provide you with the full range of accounting tools and features, including:
Bank connections and reconciliation
Invoicing, quotes, and bills
Inventory tracking and management
Sales tax management
Dashboard and reporting
Contacts, smart lists, and file storage
Fixed asset management
Accept online payments with payment processor integration
Free mobile app
Payroll partnership with Gusto
Integrate with over 700 third-party platforms
24/7 online customer support
Productivity Solutions Grant (PSG) and SkillsFuture Enterprise Credit (SFEC) with QuickBooks Online and Xero
The correct software for your business depends on your budget and the needs of your company. QuickBooks Online and Xero are both good options, but you should choose the one that best fits the needs of your business.
Did you know? You can save on Xero or QuickBooks Online with the Productivity Solutions Grant (PSG). PSG was jointly launched by Infocomm Media Development Authority (IMDA) and Enterprise Singapore to support companies keen on adopting IT solutions and equipment to enhance business processes. From 1 April 2023 onwards, the maximum support level will be up to 50%.
In addition, the SkillsFuture Enterprise Credit (SFEC) encourages employers to invest in the enterprise transformation and capabilities of their employees. Eligible employers will receive a one-off S$10,000 credit to cover up to 90% of out-of-pocket expenses on qualifying costs for supportable initiatives, over and above the support levels of existing schemes. Businesses in Singapore can use this credit to train their employees on the latest cloud accounting software, QuickBooks Online or Xero.
Acc Pro (Singapore) Group has been working with Singaporean SMEs to digitalize their operations and move their accounting online. If you want to grab the government funding, contact us today to find out how we can help!