Operating a business without keeping close tabs on its financial health is like driving blindfolded.

It’s hard to make sound decisions when you don’t understand the implications on your company’s bottom line.

You probably know that keeping accurate financial records is an absolute necessity for your small business. But if you’re like a lot of small business, you may have some questions about whether or not you have the right tools available to do it effectively.

This is especially true if you’re relying on a desktop accounting software to manage your financial reports.

These programs are confined to a single computer, and can often make it difficult to get things done when you’re away from your laptop or the computer you use to manage your business’s information.

If you’ve used a desktop accounting software, you may be familiar with some of these common challenges:

  • Multiple user access: The computer owner is the only one who has access to the financial data. The company accountant has to make on-site visits to work on the books.
  • Data entry: Numbers must be inputted manually, which is a drain on time and can lead to human error.
  • Transferring data: Data cannot be sent directly from one computer to another. An intermediary like email or a USB drive is required, both of which have security and reliability downsides.
  • Protecting data: Backups are costly and complex. But if you don’t back up your data regularly, you risk losing it if your computer fails or is stolen.
  • Software updates: Desktop software becomes dated over time. A new version must be purchased and installed every few years.

As a small business owner, you can’t afford to have setbacks like these slow you down or keep you from getting things done.

This is where cloud-based accounting software comes in.

Cloud-based accounting software — which is accessible through a web browser or mobile app — is free of the barriers of the desktop, providing small business owners with a better way to do their accounting.

If you’re ready to take control of your business’s accounting responsibilities, cloud-based software is the best way to do it.

Let’s look at how the accessibility of the cloud eliminates many of these same problems.

  • Multiple user access: Financial data is available to anyone with login credentials (the business owner controls who sees what level of detail). The company accountant can access the books from their home or office and play a bigger role in the financials of the business.
  • Data entry: Cloud accounting software connects to your bank account and other cloud-based software through APIs. Data automatically flows between the systems, removing the need for manual entry.
  • Transferring data: You almost never need to transfer data out of the cloud since it’s housed in a single location and can be accessed directly through the internet.
  • Protecting data: Because it’s not stored locally, there is no risk of losing data in the event of a computer failure.
  • Software update: Updates take place automatically in the cloud. You always have the most recent version of the software, without being forced to pay extra or go through another installation process.

The predominant benefit of cloud accounting software is that it facilitates a greater understanding of your business’s financial well-being.

You can check account balances, the status of invoices, upcoming bills, and more from any computer or through a mobile app. Since data automatically flows into your accounting system, you don’t have to do too much work in order to find out where you stand.

When you always have your finger on the pulse of your business, you can make quicker and smarter decisions, which can be the difference between thriving and just getting by.

Check out Xero’s guide on cloud accounting software if you are interested in learning more.