A small business has less choice in terms of services than a large business. Would you agree?

The reason for this is cost. A large business will be able to afford to outsource certain tasks, opt for different services, and perhaps use technology to get a particular job done. A small business needs to watch their cashflow a little closer, until they start to grow the business towards ‘large business’ status.

Small businesses also have fewer employees than large concerns and that in itself means that many tasks need to be done by less people; i.e. someone who may not be fluent in sales may need to learn sales techniques, as well as their main role, which may be admin, just as one common example.

When It Comes to Accounting and Payroll, What Options Do Small Businesses Have?

There are two main choices here - firstly, a small business owner can do the accounting side of things themselves, or choose a member of staff to do it for them. This saves cash in outsourcing to an accountant, but it also increases the risk of a mistake, simply because that person may not be hugely experienced or qualified in financial law.

The second option is to employ the services of an accountant, but again, this can be expensive and there isn’t a real time option in terms of knowing the financial picture in the here and now. In order to obtain that picture, the business owner would need to arrange a meeting with the accountant or telephone them for an in-depth discussion.

There is another option, but it is up to the business in question to weigh up the pros and cons. This is Cloud accounting.

Cloud accounting requires certain software to be used, and enables a business to employ the services of specialized Cloud accountant. Because everything is stored virtually, i.e. in the Cloud, both the business and the accountant can access financial information at any time, and it’s all in real time. Obtaining an accurate financial picture is literally done in seconds, because you simply log on to the software and pull up the information you need. There is less chance of mistakes being made and double the work, simply because everything is there in that real time mode.

Now, is this a cost effective solution for a small business? In many ways, yes. Cloud accounting will enable a small business to concentrate on the here and now, and therefore know what position they are in at any given time. This helps with business growth, but it also ensures that less time is taken going over financial tasks that perhaps that person isn’t specifically trained for.

Time is money, and that also frees up small business owners and employees to be able to concentrate on growth, marketing, coming up with new product and service ideas, and also dealing with customers in a direct manner.

So, if we’re talking about time equating to money then yes, Cloud accounting certainly is a cost effective method for small businesses to use.

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- The Capex Team