Xero Cloud Accounting
Xero plug-ins enable increased integration and efficiency
Automation has become an important part of streamlining business processes and can go a long way toward building a successful company.
Cloud accounting is one of the pieces of automation that is enabling business owners to reach their full potential without having to cut through vast amounts of red tape and make costly additions to existing software packages.
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Cloud Accounting Technology
Cloud accounting is, in a nutshell, cloud-based software to run the accounting function of a business. This trend is slowly replacing the old ways of accounting and for good reason. One such program is Xero cloud accounting software which is made for small businesses and allows users to automate their admin and work from anywhere in the world. Aside from invoicing, tax returns and bank reconciliation, Xero’s open application programming interface now allows users to integrate this software into their own or third-party business software for easy financial management.
Cloud accounting allows for flexibility and adaptability which only serves to benefit both businesses and people as the rate of change across the world only increases in line with technology and the availability of information.
Linking bank accounts with ease
With cloud accounting software like Xero, users are able to link directly to their company’s bank feeds, pulling bank transactions straight into the program itself. Goodbye manually uploading bank statements and hello live access to financial information!
This also keeps financial information relevant and up to date as all transactions are uploaded to the cloud and refreshed automatically. It’s now easier for businesses to monitor sales, cash flow, and debtors – among many other usabilities – to meet and surpass their financial targets.
Payroll and Cloud Accounting
Cloud accounting is also able to populate your payroll data with ease. Let’s take the local payment software currently utilised at OCFO, SimplePay. The service is fully online and keeps users compliant with all the relevant legislation.
One of the benefits of Xero’s online accounting integration with SimplePay is it enables users to import their chart of accounts into the software to then specify mappings from SimplePay’s accounts to their accounts in Xero – all by just using the Xero plug-in that increases efficiency and optimizes payroll procedures.
Remote working made easy
While it may seem like any other software at first, we need to examine how the working environment has changed and moved online, especially in the face of a pandemic that brought the world economy to a grinding halt and forced businesses to adopt remote working as a result of the lockdowns.
Cloud accounting software such as Xero enables remote work in new ways. Fully digitized companies are now able to work from anywhere in the world. With users and their employees no longer bound to a specific computer at the specific office, logging in from any device with an internet connection anywhere in the world allows for more personal and work flexibility. When your accounting software is fully integrated into your payment software, you can forget having to be in the office when there’s an adventure to be had post-pandemic.
Integration with Cloud Accounting
Xero is fully compatible with programs like Dext, which allows users to take pictures of and scan paper receipts in order to digitize them so you never have to worry about where that supplier invoices went or the receipt from a business lunch with that big client.
Xero enables even the most complex of software to automatically sort financial data and manage a real-time view of a business’s finances. Dext integrates directly with Xero to create end-to-end bookkeeping productivity solutions by syncing with Xero chart of accounts to ensure that all data is categorized accurately. It then pushes the extracted information to your purchase ledger or bank account, automating what used to be a manual process. This kind of usability is priceless in this day and age where we are still on the cusp of full digitisation and still rely heavily on paper in many economies.
Reporting with Cloud Accounting
Live financial information feeds can also enable easy reporting, with strong reporting tools generating analytics and financial snapshots to form a financial dashboard for your company. Beautifully presented, these reports and dashboards give even the least financially savvy director an edge when it comes to being on top of company finance.
Powerful dashboards can be customized to help all stakeholders track key performance metrics in an easy-to-read snapshot of a business’s performance. There’s also the ability for Xero to invite your advisors to access your company’s cloud accounting profile for a full live view of company finances. This would enable them to give the best possible advice and suggestions with all the information at their fingertips.
Customise your Xero account
The Xero technology itself relies on open-source software that is available for any developer to tweak for their own use. The nature of open-source software means that it’s highly customisable but it doesn’t take a developer to customize items like invoice templates. Something so small can make a huge difference in the look, feel, and professionalism of a business.
The perks just keep adding up too, as cloud accounting can also recognise recurring transactions and is able to allocate these transactions into their correct accounts. Through machine learning and algorithm development, manual allocations become automatic, decreasing bookkeeping work, increasing organisational-wide analytics, and allowing human resources to focus on value-adds that support and drive bottom-line revenue.
The Security of Cloud Accounting
Cloud technology ensures data security, accessibility, and removes the restraints of physical computing. The idea that we have to slave away at a desk is a relic of the past and remote cloud access can greatly benefit businesses looking to move online, work at shared workspaces, or decentralise operations. Xero easily enables users to collaborate remotely and track all transactions in real-time. Desktop-based accounting software comes with inherent risks that are not relevant to the cloud. This ensures your financial data is both secure and accessible.
Cloud Accounting opens a company up to a world of remote and digital working. The advantages for a company using the cloud for accounting are more relevant now than ever before and make it a no-brainer to make the transition. Virtual work is the way of the future and when you have the option to conduct business in your slippers, why wouldn’t you?
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Frequently Asked Questions
What is cloud accounting?
Cloud accounting is accounting that is not desktop based. The functionality of cloud accounting is the same as the functionality of traditional, desktop-based accounting, with the exception that there is no desktop application. The ‘cloud’ is an online space where your information is stored in a secure environment that moves with you wherever you move. The ‘cloud’ platform is always available online, so as long as you have an internet connection you can access your accounting information from anywhere in the world.
Which cloud accounting software is better, Xero or Freshbooks?
Xero is normally used for small and medium-sized businesses as well as accounting practices. Xero offers more accounting features and third-party integrations for inventory management, payroll and so much more. Freshbooks is a system for individuals that offers time tracking, invoicing and project management tools. Freshbooks is normally used by independent contractors or self-employed professionals.
Which cloud accounting software is better, Xero or Wave?
Wave offers simple and introductory accounting and bookkeeping needs for small service-based businesses. Wave does not offer any complex accounting functions like inventory and fixed asset management. Xero is more sophisticated and offers in-depth accounting with inventory and fixed asset management built-in and additional integrations to third-party applications for business management purposes.
Why use cloud accounting?
There are many advantages to using cloud accounting:
- No installation required
- The software stays up to date
- Automation of accounting tasks
- Eco-friendly (Cloud accounting ensures a paperless environment)
- Your data is secure – no backups are needed since everything is safe and sound in the cloud
- Your data is accessible from anywhere in the world – as long as you have an internet connection
- Reporting can be done in real-time
How much does cloud accounting cost?
The cost of cloud accounting varies depending on the programme used. When you sign up for an accounting/bookkeeping package with OCFO, your Xero subscription will form part of your package and won’t be paid separately.
Is your cloud accounting service available outside South Africa?
Our Cloud Accounting services are available worldwide via remote access. We have customers from the USA, UK, South Africa, Australia and more. We have a team of qualified accountants who service a wide variety of businesses around the world.
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