Simplify the Switch to Online Accounting: 6 Tips

Changing the way your small business does something is stressful. Difficult. Time-consuming. But you had good reasons for changing your financial management from a manual, paper-based process to a cloud-based one. You knew that your company would eventually benefit from this complex switch eventually, but wondered how long it would take to get there – and if you could even do it.

You can, if you prepare for the transition. First, you need to make a commitment to see it through. Back in the days when businesses had no choice but to pay hundreds of dollars for desktop accounting software, a lot of those big boxes gathered dust on shelves. It’s even easier to bail from a cloud-based accounting application because you’re only out the subscription fees for a month or two, but it will leave a bad taste in your mouth for online accounting in general. So don’t decide until you’re sure you can follow through.

Second, create a detailed document that outlines all of the accounting-related tasks that you and/or your staff do and how you do them. For example: Paper bills come in and are opened by X. They’re stored in a folder in order of due date. Payment deadline is written on wall calendar, and checks are written and mailed a week ahead of due date. You shouldn’t even start doing research until you know what features you’ll need.

It’s a good idea, too, to write down the problems you experience with your current system (there must be some or you wouldn’t be looking for a different accounting method). Are you having trouble, for example:

  • Matching payments with orders?
  • Keeping track of your inventory?
  • Generating reports?
  • Estimating quarterly tax payments?

This should go without saying, but get input from everyone in your company who “touches” your bookkeeping. Do you have a shipping person or department? Customer service personnel who sometimes take orders? A salesperson or team? Get their wish lists, too, in terms of their current interaction with accounting and how it could be improved.

If you think your company will grow in the next year or two, determine what kind of financial tools you’ll need to support anticipated business development.

  • Are you a sole proprietor who’s planning to hire your first employee(s)? You’ll need an accounting application that can be integrated with payroll-processing.
  • Do you—or someone on your staff—expect to be traveling more? You’ll have to scrutinize the mobile access allowed by any accounting websites you consider.
  • Are you having trouble getting customers to pay their bills on time? You might want to consider adding finance charges for late payments and discounts for early ones.

You get the idea. Think about financial policies and procedures that you can’t put into place because you don’t know how they work, you don’t have time to figure them out, and/or the bookkeeping involved is too much to take on in your current manual system.

Two Caveats

If you complete all of these steps, you should have a fairly good idea of what you need in a cloud-based accounting application. You should know a couple of things before you start looking around for the right solution, though. First, you’re highly unlikely to find a perfect fit, a website that does everything you’ll need in the foreseeable future and no more.

State-of-the-art financial websites provide the basic tools required to track income and expenses and inventory items. They include record and transaction form templates to support those activities. They also provide integrated add-ons so that if they lack features in an area that’s important to you, it’s easy to extend them.

Second, you will have to learn new ways of doing things, and you can’t do them halfway. If you create invoices and receive payments online but continue to stuff checks in envelopes to pay bills, you won’t get the comprehensive overview of your finances that web-based solutions provide – which is probably one of the reasons why you’re changing your accounting method.

Making It Work

Choosing the right site, making the transition to online from paper, learning to analyze the information you’ll be getting – all of these steps can be taken without professional assistance, depending on your financial acumen and your familiarity with new technology. Doing this on your own, though, will cause disruption, frustration, unnecessary time-wasting, and may affect your accounting workflow to the point where your financial health is threatened.

So if you said Yes to step one, if you’re committed to making this critical transition successfully, let a financial professional assist you. He or she can do a lot or a little to help you not only get online and get organized, but to turn this new insight you’ll be getting into smart business decisions.


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