Is Cloud Accounting acceptable to small businesses

[Scottish Business Owner]

We're about to make an exciting announcement in this area very soon but I thought i'd kick off a discussion regarding the whole cloud accounting concept.

So my main question is do you as a small business owner trust the whole cloud accounting concept? If you use it in your business why did you choose it and if you don't what would put you off it?

Interested to hear your thoughts

 

[kmbookkeeping]

Personally, I wouldn't use cloud for accounting software for my business, or for my client. That being said, I accept that many businesses do wish to use it, so I recently teamed up with a provider to offer to those clients who wish to do their own bookkeeping.​

My reasons are not to do with security but business continuity. Should anything happen to my computer I know that I can be up and running with my last day's backups within 1 hour. I cannot be confident of the same with cloud providers. Then, we all know that businesses experience problems, what if my cloud provider went out of business quickly? How could I recover my data?​

For me, I just don't yet trust the services on offer right now.​

Kris​

 

[Mike Lewis]

, I suspect that people like you and me have few problems with cloud computing. We are aware of the advantages, and we recognise it as an important technology.

But we are more tenchnically-aware than most small businesses. I wonder if a more typical business person would really trust it. In my experience, even large companies are concerned about the implications of data "leaving their premises" (whatever that means).

Also, I think Kris had made an excellent point: it's not so much the security issue, as that of continuity of service.

Having said that, I'll look forward to hearing your exciting announcement. It will be interesting to see how you plan to use the technology.

Mike

 

[Mike Lewis]

Soon after I posted the above reply, I saw this story on the BBC site:

Microsoft online services hit by major failure

The services in question included Hotmail, Office 365 and Skydrive.

To quote:

Such a major problem is likely to raise questions about the reliability of cloud computing versus local storage. Especially embarrassing is the temporary loss of Office 365, the company's alternative to Google's suite of online apps.

Mike

 

[Gutsy]

Interesting topic - and firstly, let me say so glad the forum is back!! I missed it. As you'll see by my avatar etc, I've recently become a dealer in figg Excel Acccounting Solutions. They are not cloud software, but they do make use of Dropbox. I think like most innovations, cloud software is going to take a while to catch on and for people to be convinced about it. I'm not sure that I wouldn't use it in my business. I'll be interested to hear what your announcement is going to be.

 

[Gordon N]

Up until I closed my office door for the last time (August) I had been using FreeAgentCentral for all my bookkeeping/accounting. I would describe it more as Software as a Service (SaaS) than cloud computing though. It does bring into question the matter of trusting others with your important and sensitive data, but I never had any worries with them. They are Edinburgh based, extremely helpful and in three years I never lost a single piece of data.

A lot of the time for me to make a decision it would be down to what information I was looking to store and the credibility of the service provider.

I have to say though, I really am not a fan of the way a lot of people throw around the term 'cloud' - it still means different things to different people and I fear it may end up as another buzz word used to sell services to people that don't know what their committing to.

 

[Scottish Business Owner]

Hi Gaynor,

Nice to see you back Our big announcement happened several months back when the forums were closed. We're now certified advisors for Xero Cloud Accounting. You can see the reference to it in my signature

To be honest my business has totally adopted an online framework. We use Google Apps for business across our team, team versions of Hootsuite and Nimble for everything social media and CRM. I think ultimately they all just make sense. Xero for me has changed our business alot and I get really enthusiastic when I get to chat about it as it's a fantastic product. I think the perceptions of cloud accounting are changing very quickly. The three big players in the UK FreeAgent, Kashflow and of course Xero are making significant investment into their business so I think that bodes well for the future.

Gordon - I have to agree that the word "cloud" is a bit deceiving. I guess it just sounds better than SAAS

Gaynor - I'd love to find out a bit more about figg. We obviously work with Excel on a daily basisand not everyone we work with really needs a full accounts system. Perhaps you could email me some details?

 

[stugster]

Touching on the continuity side of things, is it really that detrimental to a business to be unable to access their accounts program for a few days? In my business, I think I could quite easily manage for a few weeks without it.

Most of the online providers that I've dealt with allow for a full CSV dump of all the data on their system, so if you pulled that off semi-regularly, it wouldn't be a massive issue if they were to disappear over night (although it would be a headache!).

 

[Gutsy]

Hi - I can't seem to find your email address! I will message you on here early in the morning, unless you mail me at gaynor.paynter@figg.co.za

 

[shredder]

Great to see the forum back.

I'm considering the online version of sage at the moment but mainly because I have previously used their boxed product. Any chance you can share your views on sage vs xero? Would also be interested in your views on the best way to convince my bookkeeper that it would be better to switch from the sage box product - we currently use the basic sage version.

 

[Scottish Business Owner]

Hi Shredder,

Appreciate your comments about the forums, it's good to be back as well

Regarding Sage and Xero. I've used Sage is all it's guises for around 15 years and I believe it still has a role to play. I am however a massive fan of Xero and try to encourage our clients that I feel are suitable for it to at least try it. When people try it they very rarely go back to anything else. I think you need to explain to your bookkeeper that there are huge benefits to an online accounting system. The main benefit being you both see the same data in real time. You also dont have to worry about upgrades etc which for many desktop based systems can be really cumbersome and can cause issues if moving data between machines.

The killer feature for me in Xero is direct bank feeds where Xero will securely connect to your bank and download the transactions directly into the system. This is a huge advantage over pretty much any other online or offline accounting system at present. For us Xero gives us far more contact with our clients and it's changing the way we actually service clients as well (hopefully for the better!).

Your bookkeeper should be able to trial Xero without any commitment to try and see if they think it can work for them. Ultimately though if the customer wants online accounting then it's up to the bookkeeper to either embrace this or stay as they are and potentially lose that customer.

Just my 2p

 

[shredder]

Thanks for the reply , after a bit of googling xero looks interesting. Would you be kind enough to answer a few questions for me? Hope they make some sense.

Are Santandare bank accounts supported?

Do you have to use the CRM / invoice raising functions ? I'm not in any way interested in using an accounting system to manage customer relationships or to issue invoices I send out to clients, obviously details of invoices issued need to be recorded in the system but I would need to understand if not using invoice issue function limits / prevents use of the system.

Is it easy to change the year end of a company? Previous experience of doing this with a sage box product was a disaster.

Do I have to use a certified partner? I get the impression that there are certain elements of the system that are only availiable to the accountant/book keeper.

I take it it does a cash book and can produce full accounts i.e. I don't need to use any other system in addition to this one?

How would it work if I wanted to use on more than 1 non related company?

Does it cope with both Ltd and LLP's ?

Does it do payroll of is that a separate service?

Can I take a backup of the data e.g. a spreadsheet /csv download of transactions/entries/produced accounts etc.

Does it not do anything that the basic sage package does do ?

Thanks in advance.

 

[Scottish Business Owner]

Hi Shredder,

I'll try and answer all your questions

Santander Bank Accounts - Are fully supported. I have clients using Xero with Santander at present.

CRM/Invoicing - I'm not sure Xero has CRM as far as i'm concerned. It has some integrations for CRM but doesn't offer it as standard. No need to use the invoicing but I would need to understand how you would manage this better outside Xero. Surely being able to email invoices and check who owes you what is a good thing? I will however concede that you will know your business better than me

Year End - Xero is essentially dynamic in that you can run the P&L etc from any start date to any end date. You also have the ability to lock periods etc. It's not anywhere near as strict an environment as Sage.

Certified Partner - I'm not going to force you down a road you don't have to take. There are ways of restricting access and it does warn you about doing certain things in the system. If you were the only user though you would have full access to everything. Ultimately I think you have to see the value in working with a certified partner. Xero support is excellent so you may be able to get by without one.

Cashbook/Full Accounts - It does have a cash book it can't as far as i'm aware currently produce full accounts. It's being developed and in some countries you can use it to do that. For me though I think the end of year accounts still needs to go via something like VT or Iris. You could use Companies House if really simple which is free other than filing fees.

More than one company - Xero is company based so as much as you can have as many users as you need for each company you do need a separate license for each company.

Ltd or LLP - I dont see any issue with it working with either. We have it working for both these types of client at present.

Payroll - This is seperate but there are integration partners that will pull some data directly into Xero. MyPAYE is probably the best UK one in my opinion.

Backups and csv's - These aren't a problem you can do these easily. It has a reporting centre where you can PDF reports etc and save them for the future. It also integrates with Google Docs for this part as well.

Vs Sage basic - The direct bank feed is the biggest things for me and that will save the most amount of time for most users.

Hopefully i've answered everything you have asked but if you need me to clarify anything I am more than happy to do so

 

[shredder]

Thanks , I really appreciate the time you've spent answering my questions. Could I just clarify 1 more thing on the production of year end accounts - if I've understood correctly I'd need to use (or my accountant/book keeper would ned to use) a separate package such as VT or Iris - or an alternative such as sage? to produce these.

I can appreciate the live bank ballance /cash reconciliation features, they sound like they would save a lot of time, but if I need to use a separate package to produce the accounts what's the point of xero? Appologies if I have not understood.

 

[Gouldie0]

Thanks , I really appreciate the time you've spent answering my questions. Could I just clarify 1 more thing on the production of year end accounts - if I've understood correctly I'd need to use (or my accountant/book keeper would ned to use) a separate package such as VT or Iris - or an alternative such as sage? to produce these.

I can appreciate the live bank ballance /cash reconciliation features, they sound like they would save a lot of time, but if I need to use a separate package to produce the accounts what's the point of xero? Appologies if I have not understood.

Hi Shredder,

The point of Xero and most other accounting packages is to speed up or remove any inefficiencies in the day to day bookkeeping process. The vast majority of accounting systems that businesses use for there bookkeeping won't produce the final accounts as there not structured in that way. You then also have to consider the fact that the final accounts have to be IXBRL compliant if submitting straight to HMRC.

The two different packages, say Xero and VT complement each other to give you an efficient process for not only managing your day to day finances and bookkeeping but also completing the annual accounts.

Just my thoughts and if you need me to elaborate any further I'd be happy to do so.

Kind Regards

Neil

 

[Scottish Business Owner]

Cheers for the input Neil

I probably didn't explain this particularly well in my last post. What do you mean by producing the accounts? Xero can easily give you your final profit and loss and balance sheet but for both Companies House and HMRC these need to be in a prescribed format. I'm not aware of any Sage system that does the accounts in this prescribed format.

Like Neil says there's now the complication of iXBRL with HMRC which involves tagging various items on the accounts prior to submission.

I think it may be we've just got our wires crossed on this part

 

[shredder]

Many thanks for the answers, very helpfull. I Have had a chat with our book keeper and think we will sign up with Xero.