Is a Small Business Accountant Necessary?

As a small business owner you may be used to taking on many different roles and are wondering if accounting is one of those tasks you can try to do on your own. However, small business accounting can be difficult and it can end up costing you a lot more if you try to do it yourself – either in monetary value, time, or lost opportunities. Especially if your business is successful, there comes a point where your time is the most valuable asset you have and is better spent creating value for your company rather then balancing books or filing tax returns.

Having a professional chartered accountant do your accounting also has the following benefits for small businesses:

1. Creating Forecast Financial Estimates: Small businesses may be required to provide lenders or investors with a financial forecast which includes an economic forecast, expenditures, and pro-forma financial statements. This information is heavily relied upon by outside lenders in order to have an accurate and accountable snapshot of the businesses financial wellbeing.
2. Determine Profitability: Although your small business may be generating a high revenue, if your profit margins aren’t up to par with your cost of inventory then your business is at risk. Banks and investors may also require profitability reports and forecasts to determine if the business will be able to repay their loans in a timely manner.
3. Expert Insight: Chartered accountants have gone through extensive education refining their expertise in a wide range of topics and have years of experience. Their expertise allows them to provide you with insight into how your business can lower costs, reduce the amount of taxes you’re incurring, defer start-up costs. file tax returns, and ensure everything is running smoothly.

Finding a great Toronto  chartered accountant can be difficult, but it is definitely worth it to find the right chartered professional account for your company.

What You Need to Know About Cloud Accounting

Everyday people use cloud technology to share, secure and store their data, from business documents to personal pictures. It’s easy to see why- it’s fast, simple and safe, especially compared to the more traditional methods of email attachments and flash drives. If this technology is already being used in everyday life why isn’t it being used in accounting? Enter cloud accounting. Cloud accounting software is similar to traditional, on-premises, or self-install accounting software, only the cloud accounting software is hosted on remote servers. It’s exactly like traditional accounting software except it’s is far superior in five ways.

Firstly, cloud accounting software is mobile and flexible. It allows businesses and accountants to update data and access it whenever and where ever. Traditional software is confined to one or two physical computers and sharing data has to be done through flash drives. The second benefit of cloud accounting is the real time aspect. Software and data updates can happen immediately meaning as a business you get a real time look at your finances and your accountant does too, which means they are able to provide you with the highest level of accuracy. Cloud accounting is also superior over traditional software because it has increased accuracy. Inputting data happens immediately cutting down the amount of human inputting errors and lost receipts. Some of the top cloud accounting softwares are xero and quickbooks cloud accounting.

Security is the fourth reason why cloud technology is the future of accounting software. Gone are the days of having to manually transfer financial data through a flash drive or have it all stored in a single piece of equipment. This method leaves data in danger of being damaged, lost or stolen but with cloud accounting data is stored remotely in the cloud and only accessible through encrypted channels with password protection. Cost is the fifth and final reason why cloud accounting is better. Unlike traditional software, the purchase of expensive equipment or updates, not to mention additional costs of IT personnel and backups, is not required.

With all these pros of using a cloud accountant why are you insisting on grounding yourself in the past with traditional software?

6 Reasons Why People Are Reluctant to Get Lost In the Cloud

Despite the widespread use of cloud technology in everyday life, there is still some resistance when it comes to adopting cloud technology for accounting purposes. Below are the top six fears identified by Toronto chartered accountants that are stopping people from using cloud accounting software.

1. Security

Potential security risks are the top concern as to why people are hesitant to switching to cloud accounting. There’s no need to worry though. Cloud accounting is actually safer than traditional software due to its remote storage, encrypted channels and password protections, making it a lot harder for the data to get stolen, lost or damaged.

2. Fads

Cloud technology is here to stay. Don’t worry about wasted time spent adopting and learning a new technology only for it to be obsolete the moment you get it. That won’t happen with cloud accounting software, at least not for a few years.

3. Cost

Compared to traditional software, cloud accounting is actually cheaper. There’s no costly updates, no expensive equipment and businesses can even cut costs on IT personnel and traveling expenses to and from your accountant.

4. Time

While some time is necessary in order to learn how cloud accounting works, in the long run businesses will be saving time. Updating data happens instantaneously so there’s no lost time spent trying to input months of receipts and checking for bookkeeping errors.

5. Control

With cloud accounting businesses have more control over their financial data. They can now access it anytime and anywhere, from any device. Sharing is also made easier and businesses even have control over what information gets made available to whom.  

6. Generation

The generational gap is most apparent when it comes to technology. Those that had to adopt technologies are much more reluctant to accepting cloud software versus those that were born amongst it. It’s understandable, but the cloud is the way of the future so by resisting it businesses are ignoring prime demographics and cementing themselves in the past.