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What Advantages Can Outsourced Cloud Accounting Give My Business?

Category: Articles

By Patrick Curtis, CPA, CGMA 

Business owners and executives are some of the busiest people you may ever know.  This should not come as a surprise.  In addition to sales, customer service, staffing, safety, government regulations, marketing, staying ahead of the competition and inventory management, successful business owners have to keep track of financial performance, cash flow, receivables, payables, tax liabilities and paying employees.  It is no wonder that being a business owner is one of the most stressful occupations – even more so if you operate a small to medium-sized business with multiple locations.  Because business owners have so many responsibilities, they have to learn to be as efficient as possible. 

One way to be more efficient is to outsource most of the accounting functions.  Many business owners are turning to outsourced, cloud-based accounting solutions as a way to address their accounting needs.  There are several reasons why outsourcing to a cloud-based accounting system can help you manage the accounting needs of your business more efficiently. 

Save Money 

If you are still processing accounts receivable, vendor payments and payroll manually, you are wasting money and time.  A manual system for customer receivables or vendor payables is rife with inefficiencies.  Outsourcing to a cloud-based system can cut the number of steps required to pay an invoice or receive payments from your credit customers.  By automating many of the processes, a cloud based system can cut the time to pay bills and get paid by one-third or more.  You will also save the money you are spending on postage, check stock, printers and supplies.  It is much easier to manage cash flow with a cloud based accounting system which will allow you to make sure you take advantage of early payment discounts or stop paying late charges.   You may also be able to operate with fewer staff, because the cloud based systems are so much more efficient; thus saving employee salary and benefits expenses. 

Financial Information in Real Time 

To properly manage your business you should be monitoring the financial information on a timely basis.  Ideally, you should also look at Key Performance Indicators on a financial dashboard every day.  With cloud-based systems the general ledger is updated in real time.  Most cloud-based systems also have the ability to combine key financial and non-financial data that you can use to manage your business and the data is updated every day.  Financial and operational information is not good unless it is relevant, and it is not relevant unless it is timely.  A properly configured and functioning cloud-based accounting system should give you that needed information on a daily basis.    

Improved Collaboration 

How often do you need to communicate with your accountant, managers, partners or other staff who may be in different locations?  This can be a challenge with an outdated accounting system.  With cloud-based accounting systems, you are able to collaborate with others via the web using many types of devices (iPad, laptop, desktop, smart phone).  With cloud-based systems, accessing important documents such as vendor payment confirmations or accounts receivable ageing is much more convenient.  Being able to address questions right away and not having to wait to get back with someone keeps another item off your “to do” list.   Thus, allowing you to get other things done.  

Many small to medium-sized business cannot afford a full time Chief Financial Officer or controller.  Successful business owners run their businesses like a big business, and big businesses utilize budgeting, forecasting and strategic planning to manage their finances and cash flow.  A cloud-based accounting system may make it easier for a smaller business to afford the services of an outsourced CFO.   

Reduction of Fraud 

Fraud should be a concern for every business owner.  If you’re not concerned about fraud you need to be.  The Association of Certified Fraud Examiners (ACFE) estimates that organizations lose 5 percent of revenues to fraud each year.  Preventing unauthorized access to your bank accounts is one critical component to fraud prevention.  Cloud-based accounting systems offer much better fraud prevention than manual accounting systems.  Most cloud accounting systems can be configured to control who has access to bank accounts and other financial information and provide an electronic audit trail of who performed what action and when.  

Gain Valuable Time 

One of the more important advantages of outsourcing your accounting services is that by improving the efficiency of your accounting system you have more time to focus on what is important in your business; customer service, quality of your product or service, marketing, employee performance or whatever else you deem to be critical to your success.  The reason you opened your business in the first place was probably not the paperwork that goes along with running it, but most likely some other reason.  An outsourced, cloud-based accounting system will give you more time to do the most important tasks and help you get that edge over your competition.  

Outlined above are just a few reasons to consider when thinking about outsourcing your accounting needs to a third party that utilizes the cloud.   However, each business owner needs to decide if it is the right option for them.  Many of your competitors have already moved to the cloud or are moving to the cloud and realizing these, and other, advantages.  As a business owner or executive, it makes sense to explore your options and consider every available competitive advantage that is out there in order to continue successful operations.     

Patrick Curtis, CPA, CGMA is a partner with Rubino & Company with over 15 years of experience providing audit and consulting services.  He has a broad base of experience to include audits of government contractors, nonprofit organizations and employee benefit plans as well as providing outsourced accounting services.  Patrick’s clients are primarily small to mid-sized government contractors, trade associations, and those nonprofit organizations that receive Federal Awards.

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