Online, Cloud-Based Accounting: Remain In The Loop

Desktop computer screen, tax form or invoice

Could cloud-based accounting increase a small business’ financial awareness of their own circumstances? A report from YouGov suggests that SME business owners feel out of the loop when it comes to their business finances, to the extent that the majority do not know what their tax liabilities mean for their business.

The statistics reveal that around 70% of business owners are completely unaware of how much money they could remove from their business, after tax liabilities have been taken into consideration. On top of this large portion, around 4% of those surveyed said that they just didn’t know what kind of advice they receive on this subject. In the same report, 49% of business owners, would like their accountant to be more pro-active in providing up-to-date information on their finances. The two statistics show a worrying trend; many people running businesses do not receive enough financial information for them to have a good understanding of their own financial circumstances. Traditional accountants are often not forthcoming with such regular data, but with cloud-based accounting services, accounts can be accessed round-the-clock, 24/7.

Laurence Collins, Managing Director of Magic Accounts, online accountants specialising in small business finances, says, “The survey from YouGov shows that many businesses would love to have more information about their finances, but their accountants are lacking greatly in providing that service. An online accounting service provides constant access to a client’s accounts, as well as monthly bookkeeping and management reports so that owners have a regular overview of their business’ finances.”

The trend for business owners being unaware of their financial circumstances is a worrying one; those in the legal, hospitality and manufacturing fields strongly agree that it would be an especially damaging habit to get into for their industry. Marketing, IT and finance are also fields that would strongly struggle if they were not constantly supplied with updates or access to their own accounts.

Seeking an online accountancy service to take care of the books is often a load off the mind of many business owners, but this can also create a sense of complacency where finances are concerned. Outsourcing to a team of external accountants is a move which makes great business sense, but business owners must be prepared to be highly involved. They may not have to fill out tax return or deal with HMRC anymore, but they must be willing to seek answers to their financial questions, and play an active role in the monitoring of their business’ finances. Though the role of an online accountant is to remove the financial burden from the shoulders of a business owner, it does not diminish or remove the burden from the business entirely.