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The Changing Face and Pace of Small Business Accounting

2/8/2021

 
Small business accounting has changed in subtle and not-so-subtle ways. That statement should come as no surprise to anyone reading this article. Surprising to many, though, is the sheer volume of changes we have seen over the past decade. Both at a macro-level and a detailed level, these changes provide new opportunities for small businesses to improve their accounting functions in many ways. Read on to learn about two of the primary drivers of the changing face and pace of small business accounting.

The Move to the Cloud

Almost certainly, the most noteworthy shift in small business accounting has been the migration to Cloud-based accounting options. Cloud-based solutions such as QuickBooks Online, Sage 50cloud, Sage Intacct, Xero, Wave, Zoho Books, along with others, offer many opportunities for small businesses to leverage the Cloud as a strategic asset. And small businesses are responding in large numbers. In fact, most accounting solution providers now indicate that sales of Cloud-based solutions outpace those of traditional, on-premises applications. So, how does the Cloud potentially improve accounting for small businesses? Let us consider at least four potential advantages associated with Cloud-based accounting for small businesses.

Cloud-Based Solutions Continue to Roll-Out New Features

First, most developers are investing heavily in their Cloud-based accounting solutions relative to their on-premises deployments. In fact, in many cases, the Cloud-based options now have a more robust feature set than their desktop counterparts. Further, developers can roll-out enhancements and upgrades to the solution without small business team members needing to install any software because of the Cloud-based deployment.

The Cloud is the Network

Second, the very nature of Cloud-based solutions means that the Cloud is the network. With today’s decentralized workforce – including work-from-home environments – this factor means remote workers can easily access their accounting solution from practically any location, so long as there is an available Internet connection. Further, small businesses can typically provide their external accountants and others with log-in credentials. In turn, these trusted advisors can access the business’s books quickly and easily, without any troublesome exchanges of data files.

Reduced Dependency on Local Hardware

Third, Cloud-based solutions reduce a small business’s dependency on local hardware, such as desktop computers and servers. After all, these are cloud-based solutions; therefore, team members need access only to a device with a suitable web browser and an internet connection. Moreover, in the ever-changing world of mobile apps, most solution providers now offer robust mobile apps allowing team members to access critical data from their smartphones and tablets.

Reduced Costs Often Yield a Higher ROI

Fourth, in many cases, you can acquire these Cloud-based options for small businesses at price points that are less costly than traditional, on-premises implementations. This point is particularly true when you factor in savings associated with reduced dependency on local hardware. In combination with productivity increases resulting from deploying the Cloud-based solution, most small businesses adopting this strategy improve the return on investment associated with their accounting platform.

Ecosystems of Integrated Applications

In addition to Cloud-based deployments, the second primary driver of small business accounting’s changing face and pace is the nearly limitless number of integration options now available. It has not been that long ago since “integration” meant importing data from or exporting data and reports to Excel. Today, those options still exist, but so many more are available to extend the small business solution’s functionality.

Bank Feeds Cleared the Path for Integrated Applications

One of the earliest innovations attributed primarily to Cloud-based accounting solutions was bank feeds. With bank feeds, you can integrate your bank accounts to your accounting solution so that as transactions clear the bank account, they automatically download into the application. At that time, user-defined rules can automatically categorize the downloaded transactions to the appropriate account in the company’s chart of accounts. Further, for transactions already recorded in the accounting solution, the bank feed process can often match, effectively clearing them from the bank reconciliation. Small businesses that choose to use bank feeds benefit from time savings, improved consistency and accuracy in the accounting records, and nearly automatic bank reconciliations.

Example of Other Integration Options

For example, consider the number of small businesses that sell through e-commerce platforms such as Shopify, WooCommerce, Magento, and others. Virtually all the leading Cloud-based solutions integrate with these and many other e-commerce platforms. Among other items, these integrations typically allow you to download sales transactions from your e-commerce website into your accounting solution, eliminating the need to enter data manually.

Similarly, most leading Cloud-based accounting solutions can integrate with many of the top reporting and business intelligence platforms available today, including Power BI and Tableau. This type of integration facilitates real-time, interactive reporting of critical metrics without manually re-keying data into the reporting solution.

Other examples of tools that you can typically integrate with Cloud-based accounting solutions include:
  • Bill payment applications,
  • Customer Relationship Management tools,
  • Data synchronization tools,
  • Employee expense reporting solutions,
  • Payroll and human resources solutions,
  • Project management tools,
  • Sales tax tools, and
  • Time tracking and billing solutions.

As you can see, integration options abound for most of the Cloud-based accounting solutions available today. These third-party solutions facilitate customizing and extending your Cloud-based accounting solution’s utility to seamlessly become the “hub” of all business activities without requiring significant manual intervention. As more become aware of these integration options, expect to see small business managers move quickly to adopt them.

Summary

The face and pace of small business accounting have forever changed. With the popularity of Cloud-based platforms and improvements in “digital plumbing” that facilitate third-party integrations, today’s solutions offer compelling options for managing and growing a small business. Moreover, moderate price points, reduced hardware costs, and improved efficiency and productivity come together to yield a generally higher return on investment than traditional solutions. As you consider how to move forward with your accounting and business management platform, take advantage of the changing face and pace of small business solutions to reap the rewards for you and your team.

TO LEARN MORE

To learn more about small business accounting solutions, consider the following K2E Canada Inc. learning options:
Sessions
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K2's QuickBooks for Accountants - 8 hours
K2's Technology Conferences
K2's Advanced QuickBooks Tips and Techniques - 4 hours
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Tommy Stephens

Ridha Fathima AM link
4/5/2022 04:45:08 am

Thanks for the article on The changing face and pace of small business accounting.Looking forward for more articles like this.

sutherland property accountants link
9/16/2022 10:35:44 pm

Small enterprises and startups are not all funded. Even if they do, it is crucial to establish and follow a corporate budget. Unexpected costs can result in financial instability, which would make the company fail. Making a budget that is designed with corporate goals, financial constraints, resource costs, infrastructure requirements, and operations in mind is one method to address this difficulty. The firm may maximize the use of its resources without going over budget if scenario planning is implemented.

Bhargey link
10/7/2022 02:54:07 am

Superb article. Thanks for sharing your information on Changing Face and Pace of Small Business Accounting.

Jacob Pantoja link
11/21/2022 03:46:54 pm

Small businesses that choose to use bank feeds benefit from time savings, improved consistency and accuracy in the accounting records, and nearly automatic bank reconciliations. Thank you, amazing post!


Comments are closed.

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    Authors


    Ward Blatch
    Ward provides consulting and training services as the Managing Director of K2E Canada Inc. He joined K2E Canada in 2005 and is responsible for the Canadian operations of this international consulting group, which provides professional development technology education for accountants across Canada and the US. Ward lives in rural Nova Scotia and can be reached at ward@k2e.ca.

    Tommy Stephens
    Tommy is one of the shareholders in K2 Enterprises, affiliating with the Firm in 2003 and joining as a shareholder in 2017. At K2, Tommy focuses on creating and delivering content and is responsible for many of the Firm's management and marketing functions. Tommy resides in the metro Atlanta area. You may reach him at tommy@k2e.com.

    Randy Johnson
    Randy is a nationally recognized educator, consultant, and writer with over 40 years experience in Strategic Technology Planning, Accounting Software Selection, Paperless, Systems and Network Integration, Business Continuity and Disaster Recovery Planning, Business Development and Management, Process Engineering and outsourced managed services. Randy can be reached at randy@k2e.com


    Bernie Smith
    Bernie coaches businesses to develop meaningful KPIs and present their management information in the clearest possible way to support good decision making. As the owner of Made to Measure KPIs, he has worked with major organisations including HSBC, Airbus, UBS, Barclays, Credit Suisse, Lloyds and many more.

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