Cloud Bookkeeping Solutions
04 Sep 2019
William Wedlock, CPA, CMA - Accounting Associate
Gone are the days of maintaining your books by hand in a ledger. The big names in bookkeeping solutions such as Intuit and Sage have spent the last few years moving their resources away from their desktop platforms, focusing on new online platforms instead under the guise of "Cloud Bookkeeping".
The two questions that come up now are: "What is it?' and "Why?"
What is it?
Access to your company's financial information whenever you want and wherever you are on any internet-accessible device.
Online solutions, like QuickBooks Online ("QBO") or Xero, are not just a website but are accessible via apps designed for your phone or tablet, so you can truly have your company's information at your fingertips.
It is simple - the Internet.
While the Internet has been a business tool since the mid-1990s, it has only been in the last five to ten years that technology has reached the point, both in terms of sophistication and market penetration, for online solutions to be viable. Business owners are demanding information faster than ever before and, simply put, legacy solutions cannot keep up.
But is it secure? Banks are hacked all the time.
QBO, for example, uses 128-bit security encryption. - Great! And what does that mean? - If someone was trying to break into QBO by way of brute force, the decryption process would take over 1 billion years. On top of this, a secondary code is required to complete the login on each new location you sign in from. Also, by being an online service, all your data is backed up automatically offsite. The key here is that your books will be held on a secure server offsite from your business, so they will be protected 24/7.
So what are the benefits?
One of the main attractions of Cloud solutions is the integration with online banking and artificial intelligence. This allows the software to set up "Bank Feeds" and to pull the activity from the linked accounts (chequing and savings, credit cards, or loans) twice a day. Any bank activity is then downloaded into the software with all the relevant details and held for review before it gets posted into the books. There are also features to automate posting of reoccurring transactions - so when the time comes to pay the monthly Internet bill, the software will learn and be able to identify that same monthly payment, back out any sales tax and send it to the correct expense account.
Other benefits include integration with other online software solutions. Two of the most popular apps at the moment are RecieptBank and Hubdoc, both of which are best described as an online filing cabinet. These apps can link you into various online accounts (bank, credit cards, utilities, etc.) and retrieve copies of your monthly statements or invoices. Also, these apps have features which allow them to "read" the document, identifying the issuer, balance owing, sales tax and date, and can transfer the data along with a PDF copy of the relevant bill.
All of this sounds great, but what does this mean to you, the business owner? In the event that CRA comes along to review an HST filing or certain expenses claimed on the tax return, you can now have a supporting invoice attached to every single transaction, and a full digital filing cabinet with your receipts and invoices at your fingertips.
On top of these two common apps, there is an entire library of tools and programs that can integrate with Cloud Bookkeeping technologies letting you build a solution unique to your business needs. If moving to a Cloud Bookkeeping solution is something of your interest, speak to your accountant or bookkeeper.
Qmulus - At SBLR we've paired with the best technology to manage your bookkeeping, accounting and tax needs.