5 Tips Using Cloud Accounting Software To Achieve Small Business Success

Starting your very own small business is an exciting yet daunting venture. You’re chasing your dream – leaving everything else behind to do what you’ve always wanted to do, the way you envision it should be done. On the other hand, you’re putting it all on the line. You’re risking not only your career but your entire livelihood. The success or failure of your business will have a direct impact on the entirety of your life.

According to the U.S Small Business Association Office of Advocacy, about a third of businesses fail in their first two years of operation and about half fail within the first five years. Poor financial management is one of the main reasons businesses go under. When resources are tight it is easy for ambitious entrepreneurs to overspend, believing that profitability is right around the corner.

There is really no excuse for not staying on top of your finances in this day and age. There are a number of financial tools that are now easier to use and more accessible since becoming readily available in the cloud. The following list highlights the types of web-based software all small business owners should use in order to achieve financial success.

#1. Accounting

Cloud accounting software is the best way to keep track of your business cash flow. It provides owners and their accountants both high-level and detailed views of their current financial situation, in real-time. Many solutions connect with their user’s bank accounts, allowing bank transactions to be fed directly into the ledger, eliminating the need for manual data entry.

What sets cloud accounting software apart from its desktop predecessors is that it is accessible anytime, anywhere. This not only makes it easy for business owners to check their finances on the go, but also lets accountants access their client’s books whenever it’s convenient. The accessibility factor makes for greater collaboration between both parties and really gives accountants the ability to act as trusted financial advisors that monitor the financial well-being of their client’s business.

#2. Payroll

Traditionally, running payroll was a burden that reoccurred every two weeks or so for small business owners. Thanks to the new features made possible by payroll in the cloud, this is no longer the case. Many payroll software vendors provide an employee app, where staff can log in and request time off and access paystubs without having the ability to view the greater financial data.

The payroll manager can set PTO rules and let the software automatically track accruals. The ability to have the entire company take part in payroll removes much of the hassle for the person who ultimately processes it.

In addition to the employee app, features like automatic tax calculations and filing, API integration and comprehensive reporting are now commonplace for online payroll software.

#3. Expensing

Passing along a pile of paper receipts attached to an expense report has no place in the digital age we now live in. There are numerous applications that make expense reporting quick and easy. Like cloud accounting solutions, web-based expensing software can link with online bank and credit card accounts, allowing for transactions to be automatically imported into an expense report.

Many solutions also offer mobile apps that make it simple to track and automate expenses while employees are on the road, spending money. For instance, miles traveled can be tracked using mobile GPS capabilities and expense items can be imported via a photo of a receipt.

#4. Invoicing

Creating, sending and keeping track of invoices is now much more efficient than it once was. Good cloud invoicing software lets users create an invoice, send it from the application and monitor when the client has viewed it. This makes it easy for small business owners to keep a close eye on how outstanding invoices are affecting their cashflow and determine when it is the proper time to follow up with the customer.

Invoicing software often has the capability to pre-load inventory items and their cost and upload company logos. This makes generating an accurate and branded invoice a task that can be accomplished in only a few clicks.

#5. Time tracking

Accurately tracking the number of hours spent on a client project is an absolute must for service-oriented businesses. Not long ago it was easy to lose track of hours, leading to imprecise invoices and questions from the client. Luckily this is no longer the case thanks to the emergence of online time tracking software.

Contractors, freelancers and other service providers can track the time they spend on particular projects by using web or mobile timers, which automatically import the total hours into a timesheet. The project manager can keep tabs on overall progress by tracking the hours of each team member, ensuring everyone stays on schedule and budget.

As much as the cloud has expanded the capabilities of each of the financial management tools mentioned, its greatest achievement is that it lets all of them interact and share information. Accounting ledgers can be updated automatically with external invoices, pay runs and expenses. Timesheets can be imported into your invoicing software. Approved expenses can flow into payroll software. Using the cloud, small business owners can build a custom total business solution that meets all their needs and gives them a comprehensive and accessible view of their financial health.