So, you’ve been wasting a lot of time and money on the bookkeeping for your business. All the information for your company’s accounting resides on a single computer, to which you cannot remember the password, and you find yourself trying to understand why the business just isn’t making money like it used to. Even worse, you’re now trying to figure out why the government just reached into your account without notice and jacked all the money you were planning to use for payroll on Friday.
Strange as this scenario may seem, it is actually a widespread problem. All fraud prosecutors know the profile: an experienced, well-educated employee without whom you could not imagine the business being able to survive. She bakes you cookies, plants flowers in the parking lot, is the first to arrive, the last to leave, knows where everything is; and she will rob you blind. She might write checks to pay her credit card or pay invoices from a phantom company. She might just forge bank statements and keep two sets of books–one for her and one for everybody else. There are endlessly creative ways to embezzle money from a company, but when the facade cracks, the whole building comes crashing down. Owners and management are left in shock and in the face of a huge financial problem.
Even if you don’t have a sticky-fingered financial department, most of you out there waste untold amounts of time trying to get financials to your tax preparer, investors, bankers and lawyers. Every time that banker calls asking for updated financials you send a few dozen emails, hold meetings and conference calls, and finally get some spreadsheets that you print, scan and deliver to the banker. If flint tools were the stone age, your financial reporting is express mail by stegosaurus.
So what’s the solution? Upgrade your financial and accounting tools to the 21st century. Google and Microsoft run your email and productivity tools in the cloud, so why do you have that weird dude in the corner with total, exclusive control of your company’s most valuable data? Enter cloud-based accounting. We use Xero for our law firm and recommend it to our clients. It integrates will all our other software, so we spend a fraction of the time that most other boutique firms waste on accounting. Our friends at Pillar3 reconcile and categorize all the transactions and keep us in good shape with the tax man. Everything is organized and ready to file within a few days.
Here are three big reasons you should move your accounting to the cloud:
- Decentralized information – creating a bottleneck around one person will slow you down and create risks. You will always be dependent on that one person and don’t have time to monitor everything she does. Cloud accounting allows you to see the data in real time with an audit log of who did what.
- Real-time access – cloud accounting lets you see your financials in real time from any location. You don’t have to wait on someone to generate reports.
- Read-only users – I love being able to tell our banker to look up the financials himself. Even better, I can have certain reports automatically generated and delivered to him when the accounting periods are closed. Advisors and investors can use the same functionality, eliminating the time and money you spend on reporting.
Some folks don’t like these ideas because they don’t trust the cloud and they don’t like others being able to look behind the curtain. That’s hogwash. Google and Amazon have far superior security to your lady that keeps her password stuck on the monitor and opens every cat video that comes her way. Furthermore, we firmly believe that transparency and trust create the best business relationships (more on that later). So if you have someone with the right to know, go ahead and give them access.
