Why SMEs in Singapore need to get on cloud accounting now
Updated: Aug 10
When we mention ‘tedious’, the first thing that may pop up in your head is accounting. Working into the wee hours of the night trying to sort out receipts, invoices, and locating errors is an experience you may know too well.
This is why the automation process afforded by cloud technology has become so popular with 74 percent of chief financial officers surveyed in 2017 saying the cloud will have the most impact on their business.
Cloud accounting is the same as traditional accounting except the data is stored on a secured remote server and can be accessed through the internet at any time, and it comes with features to make accounting and other related tasks easier for you.
You may still be wary about introducing new technology to handle a crucial process in our business. But, there are five good reasons why you shouldn’t.
More Accurate Financial Reports to Help You Make Better Business Decisions
A study has shown expense report inaccuracies could cost SMEs about $29 per report and about 40 percent of the SMEs studied have acquired an average of $845 in tax penalties due to tax mistakes.
When you’re knee-deep in driving business growth and improving your net earnings, the last thing you want to happen is sorting out accounting issues because of human mistakes.
Cloud accounting helps prevent such errors by allowing you to manage your books via remote access using multiple devices. This means that you can make adjustments to your book when the need arises, be it on a tablet, PC, laptop, or even smartphone. Using features such as capturing receipts through a built-in phone camera you can also automatically store and organize receipts into the system. In addition, cloud accounting software such as Quickbooks is IRAS compliant and can support local GST filing with a click of a button.
With the cloud, you can detect duplicated entries, fraud, and other discrepancies anytime, anywhere, and not restricted to number crunching and manual analysis on an excel file like most desktop accounting solutions.
Relying on cloud accounting can help us save time and money by keeping our data consistent and free from error.
Give You Real-Time Insights of Your Accounting Status
The world of today is hyper-competitive and moving fast.
One way to maintain the edge over others is to have real-time insights in different business areas, such as accounting. This way your finger is always on the pulse of your business, giving the bird’s-eye view you need to respond, plan and grow your bottom line.
So, we want to ensure that the tools we rely on to keep our business running can perform seamlessly and efficiently. In fact, cloud accounting has been known to:
increase the productivity of accountants as they can review the results of your system instantly and make accounting adjustments where necessary
cut down time wasted waiting for financial data as management can view the financial results anytime and anywhere as long as there is an internet connection
constantly upgrade the cloud accounting platform so you always get the latest features at the tip of your fingers.
Better Security for Small and Medium Businesses
“Will anyone unauthorized have access to my data?”
“Will my data be stored in the server forever?”
“Is it safe?”
These are legitimate concerns you may be concerned about before moving your data to an off-site server. But rest assured that cloud accounting provides an equally secure — if not more secure — method of data storage than traditional accounting software.
Cloud accounting platform is as secure as internet banking. Not only does cloud accounting leaves no trace of data on the company’s computers, but it also fortifies its data security by protecting access to the cloud with password and encryption.
Even if your devices get stolen or damaged, you can rest easy knowing that your data are safe as they are stored elsewhere.
Transferring data will also pose a lower security risk with cloud accounting. Also, only authorized personnel can gain access to the data anytime and anywhere, with easy permission changes and setting that gives you the needed control. There is no need to use flash drives or make paper copies of the data which can be lost or stolen.
Also, cloud technology provides backup functionality to prevent data loss. Cloud providers usually have backup servers in two or more locations. Even in the case of a malfunctioning or disrupted server network, you will still be able to access our data from the backup server.
Known cloud service providers such as Intuit grow to be multi-billion corporations by banking on their security. So, you can be sure that protecting your data will be their bread and butter.
Data collected by Microsoft in 2012 indicated that non-cloud users spend 32 percent more time than cloud users managing security each week.
Singapore is not new to cloud technology. It has created an industry standard that allows the safe adoption of cloud technology. Comprehensive regulations and reliable infrastructure to support the technology have made Singapore the second most ‘cloud-ready’ country in the Asia Pacific according to Asia Cloud Computing Association (ACCA)’s Cloud Readiness Index (CRI) 2016.
So, to put it simply, yes, your accounting data will be safe and secure in the cloud.
Scale Your Business with Lesser Hassle
We all dream of expanding our business beyond our shore. Some of us may have already been on the lookout for new markets. Knowing that expansion is just as important as being successful domestically, you need to ensure that your system is also scalable.
With cloud accounting, you can choose how many people can have access to the data, even remotely. The multiuser feature allows for quicker, more streamlined communication and team collaboration as different teams in different geographical locations can work on the same platform together.
It also allows for greater transparency since all data are aggregated in one place. Instead of asking your accountant for a record of a transaction in a certain country, you can access it directly through the cloud, thus saving you time from the back and forth.
In addition, cloud accounting allows you to input new information or generate a report any time of day, with no hindrances because of working hours or different time zones.
A survey by Microsoft has seen companies that use cloud accounting benefit from increased competitiveness and better scalability. About 45 percent of cloud users said the cloud makes it easier to integrate their organization’s systems.
Get the Business Flexibility You Need
Given that there is a buffet of cloud providers to choose from, there is a possibility that you may end up with one that does not really address your needs, or your workflow has changed as the company grows.
But, fret not, moving data needs not be a headache as most cloud systems can be easily integrated into other systems. Also, since all your records are kept systematically and in one place, collecting, re-arranging, and migrating them to another system will not be a hassle.
Another boon of adopting could accounting is that it allows businesses to purchase what they need and upgrade the package as they grow. Cloud subscriptions can start as low as S$ 27 per month.
We have heard plenty of accounts of SMEs growing rapidly within just a few years. Opening up to the possibility of accelerated growth, you want to be armed with accounting tools that could be expanded and cater to your growing demand just as fast. The ‘pay as you grow’ feature of cloud accounting, therefore, makes it a perfect tool for SMEs.
You can start with the basic features in the beginning and add more storage space, users, and more advanced features as you go along. You can keep extending the functionality of cloud accounting by connecting with other online software. Also, since cloud technology provider does not typically bind users with the contract, you have greater freedom to choose and move to another provider that you feel may cater to your needs better.
Lower Your Operational Costs with Cloud Accounting
We have been mentioning the cost-saving benefit of cloud accounting a lot. But just how much can you really save from adopting cloud technology for your bookkeeping?
Companies that use cloud accounting can do away with the server infrastructure to store data. In addition, you will not require IT staff to maintain or update the cloud accounting system.
This does not mean that cloud accounting does not have downtime for security or system upgrades. There will be downtime, although it may not be as long and costly as having an on-site server. Fewer overhead expenses and software purchases will allow you to save more on business operations.
Whereas those with an in-house server will understand the growing pains of having to purchase new software licenses and pay for more system management fees every time the company grows. Companies studied by Microsoft said that the cloud saved 26 percent of the IT budget and reduced security management time by 18 hours a week.
Also, you can save some papers. Although they may look insignificant, paper filing is expensive. The space cost of one standard filing cabinet is estimated to be $70 per year.
This has not included all the filing folders, boxes, and employment costs needed to process and organize the files. A firm can save up to about $2,000 per year from eliminating paper filing.
On top of saving money from better security and fewer error, companies that use cloud systems can focus their budget and time on more strategic business activities. They can also get help and technical support from a professional firm to maximize the business impact of cloud accounting.
As a result, according to a Microsoft survey, 42 percent said the cloud made it easier for them to scale their business to explore new markets and 41 percent said they could employ more staff in roles that directly benefit sales or growth.
Technology is disrupting industries wholesale. And accounting is no exception, and for the better, as it helps companies like yours automate tedious tasks, gain more control over the business, and overcome resources and manpower constraints.
If you want to take the first step to find out more about how cloud accounting can help you, you can sign up for a free consultation right here.