Let’s start off with the buzzword “the cloud” and what that means in terms of accounting software and then move on to “integration”.
Broadband and NBN speeds allowed the development of accounting software that is now accessed via browser technology. As a result, small business owners can now work with their accounting software remotely on computers or smart phones.
Accounting software developers refer to this as the “connected ledger” and both business owners and their advisors can view financial information in real time. In addition, accounting software platforms were able to bring in live banking data which increased the confidence level and integrity of the financial data contained in the set of accounts. Financial institutions now use the information in for example Xero to assess loan applications.
Prior to this advance in technology, it was extremely difficult for advisors to have access to the latest set of accounts and assist their clients by analysing the most recent data.
So when we talk “cloud accounting” for SMES, our clients will typically be using MYOB AccountRight, MYOB Essentials, QuickBooks Online, Xero, Reckon One or Reckon Hosted. All these platforms allow the business owner and advisor to work together in real time. We are agnostic when it comes to accounting software and hold software vendor accreditations in all of the software listed above.
Integration & API
API is the acronym for Application Programming Interface, which is a software intermediary that allows two applications to talk to each other. Each time you use an app like Facebook, send an instant message, or check the weather on your phone, you’re using an API.
The use of this technology in business systems has spawned hundreds of apps that can send data to and from accounting software like Xero or Quickbooks Online.
The main reason for doing so is to streamline datasets so that for example your CRM – Customer Relationship Management software can share customer details with your accounting software.
No one wants to have to maintain duplicate data, right?
Accounting Software vs Operational Software
Whilst Xero, MYOB and the like are great at recording and maintaining financial data and the associated reporting – they lack one important feature! They are off the shelf and generic. What a retailer needs in software to operate their business is different to what a tradie needs.
So called 3rd party apps bridge the gap between the operational requirements of a business and their need for financial reporting. The API described above makes all this possible, so a small business operator can combine Xero and software suitable for running their business without the need to duplicate things like customer or supplier lists, invoices, or purchase orders.