Companies that are just getting started typically have minimal revenue, a few staff, and few expenses, so they can generally get away with spreadsheets and a basic accounting application. However, as new products and services are introduced, new sales channels are established, and sales expand, keeping track of revenue, expenses, obligations, and assets – not to mention owner equity – becomes more difficult.
Hiring more accountants helps for a while, but those rudimentary systems and processes eventually stifle growth since they don’t deliver the insights, flexibility, or efficiency that businesses want to be competitive. Continuing to rely on a system that does not fulfill your company’s needs is a losing proposition. Finally, if you are forced to use spreadsheets for accounting duties that your existing software cannot handle, you will struggle to produce the detailed reports that your colleagues require. If your team spends a significant amount of time entering data, or if the system does not support your governance, risk, and compliance objectives, it’s time to find a new solution.
While analyzing financial management software may not be on your bucket list, choosing a solution that works for your company will give you more control over your cash. A cloud-accounting system will not only give you access to the tools you need, but it will also minimize IT overhead and boost flexibility by allowing team members to work from anywhere, at any time.
Cloud Accounting Essentials
What you should look for in a cloud accounting system is partly determined by your business strategy. A service provider, for example, will require comprehensive revenue recognition skills that an online shop will most likely not. However, the fundamental criteria for most businesses remain the same.
A rock-solid general ledger – The general ledger (GL) is the financial backbone of your firm. It should correspond to the structure of your company so that you can easily trace where your money is coming from and going. The old method, which involves utilizing complex account codes, is time-consuming, limits what can be tracked, and gets more difficult to maintain as businesses develop.
Automated core processes – Manual processes are tedious, and yet many accounting software still offers limited automation capabilities. As a result, accounting employees frequently spend several hours each day performing monotonous, repetitive duties such as data entry rather than using their skills and knowledge to problems solving. This is a waste of resources that leads to mistakes, stress, and employee churn.
Data Visibility and Reporting
The accounting system should be the central repository for all financial data in your firm. If critical accounting operations are managed using spreadsheets, at least some of the data is stored outside of the accounting system. Because spreadsheets are static, the information they contain soon gets out of date, making it difficult to obtain a complete, real-time picture of what’s going on in the business. By offering a single source of real-time financial data, cloud accounting software prevents this. So, rather than having to juggle information from many sources, you always have an up-to-date view of your present financial situation.
Having a centralized source of real-time data is advantageous, but you must also be able to share information with key stakeholders such as department heads, the board of directors, and shareholders. Basic packages often include preformatted templates for producing financial statements and other routine reports. Reducing the requirement to develop reports from scratch, saves time. A format that works well for one company may not be suitable for another. Unfortunately, many of these templates are hard-coded, making it difficult to change the style or pick which data pieces to include in a report. This can make it difficult to communicate information in a way that makes sense to many stakeholders.
To fully capitalize on corporate data, your cloud accounting solution should feature powerful analytics. It should offer facilities for creating custom reports, measuring key performance indicators (KPIs), and building dashboards, in addition to configurable basic reports. Although many software vendors provide these tools, not all systems are made equal. Look for a system that has comprehensive reporting capabilities while still being user-friendly.
NetSuite Cloud Accounting Software
NetSuite cloud accounting software transforms the general ledger, allowing you to record transactions with various dimensions while also reducing errors through the simplification of your chart of accounts.
NetSuite also improves accounting staff efficiency and productivity by automating accounts payable, invoicing, bank reconciliation, revenue management, and other fundamental procedures. With powerful analytics capabilities, you can create more meaningful reports, measure KPIs in real-time, and gain fresh insights that lead to better decisions and performance.
Finally, the built-in governance, risk, and compliance (GRC) capabilities in NetSuite provide critical controls to reduce fraud and adapt to increasingly complicated legislation and accounting standards.
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