Do businesses need both an accountant and cloud accounting?

If your small business already has an accountant to take care of the numbers, you may wonder why on earth you need cloud accounting. If you think you can choose between the two, think again! While an accountant can provide you strategic advice on taxes and finance management, professional accounting services and tools like Xero accounting software can help you collect and compile accounting data, prepare cash flow projections and income statements and other financial statements quickly and conveniently. Both are important. In fact, a combination of the two is crucial for the success of a small business.

Reasons to hire an accountant

The expertise of an accountant gives your business decisions the right direction and helps you in many ways from time to time. Depending the size and requirements of your business, you may hire an accountant for full time or on an as-needed basis. Today’s accountants provide less of bookkeeping assistance and more of advisory services. Here are some examples of when your business might require assistance of your accountant.

When preparing a business plan – Seeking professional help from an accountant right from the planning stage has many benefits. Your accountant will use accounting tools like the Xero accounting software to prepare growth projections for your business. You can use those charts and numbers to prepare a feasible business plan.

When analyzing your finances – With in-depth knowledge and extensive experience, your accountant can quickly gain insight into your business’s financial health, analyze your financial statements, identify potential risks and opportunities, and provide you timely advice to help ensure business growth.

When choosing a business structure – Once you decide to incorporate a business, you need to choose a business structure for registration. Your options include sole proprietorship, partnership, company, limited liability partnership, and limited partnership. Different structures are suitable for different businesses. Deciding on the right type for your business would be difficult, if you don’t know enough about the pros and cons of each type. This is exactly where an experienced accountant can help you. They will help you make an informed decision.

In addition, your account will help you do tax audit, make loan applications, prepare legal and compliance documents, and keep updated with the latest tax laws.

Why you need cloud accounting

Even when you have an account, you still need cloud accounting. Advanced cloud accounting tools like Xero accounting software can help you in the following areas:

Compiling expense data – It takes a lot of time and effort to compile expense data manually especially in multiple currency. Moreover, the manual process is more susceptible to errors. Cloud accounting makes the job incredibly easy. Your employees can enter any expenses incurred by them on their own from anywhere as long as they are connected to the internet.

Accessing financial data quickly – As a small business owner, you may need to make important financial decisions every day. And you may not be able to make all decisions on your own. At times, you may need to collaborate with your partners, investors, and management staff. Cloud accounting makes the job easier by allowing team members access to your company’s latest financial data anytime and from anywhere – also known as accounting transparency. This makes collaboration easier and decision making faster.