Staying on top of your finances is key to being a successful business. Many small businesses however lack a specific person with specialist accounting knowledge, which is why cloud accounting software is a smart investment.
The automated accounting tools ensure all your relevant financial information is in one place. Online services cost less than £20 a month, which provides enough sophistication for the vast majority of small business users. Most services offer similar functionality, ranging from the ability to do simple bookkeeping through to invoice processing, inventory management and payroll management. It is possible to sync your accounting with internal systems and mobile applications.
The functionality of the software is flexible, and enhanced with the increasing online capabilities, access and reach. This means there is a considerable amount of variety in cloud accounting packages and this enables you to select the features best suited to your business. It is also possible to increase the features available for as your business grows and requires additional capabilities.
How safe is my data?
Data security should be a priority for all small businesses using online accounting software. In fact, security of data is an argument for choosing one of the large providers with the scale and experience to safeguard customers effectively. There is no guarantee such providers won’t be breached. You are encouraged to check security policies carefully to ensure the provider has the correct resources to invest in improving data security.
One issue to consider is the relationship between your accounting service and your bank. Some providers have deals with the leading high-street banks in the UK, enabling them to create a direct and secure feed of transaction data from the bank. These feeds are a secure and straightforward way to feed data into your accounts without manual intervention.
Not all providers use direct feeds and even those that do are sometimes restricted to certain banks. Many offer a different way of accessing transactions, which involves logging into your bank accounts and ‘scraping’ the data from the webpage. Most online accounting providers use Yodlee to do the scraping for them.
Who are Yodlee?
Yodlee are a US-based firm who enable banks to ‘scrap; information. By using this software, you are giving Yodlee your log-in details and although they keep your log-in details to enable it to access your data. While Yodlee says it keeps all details secure, doing this might violate your bank’s terms and conditions. This issue has yet to be tested and the law is not clear about responsibility. In theory, if you lost money through online fraud, because Yodlee was hacked and your details stolen, your bank could try to refuse to refund you because you had disclosed your details.