The benefits of cloud accounting for charities
Many SMEs have now adopted cloud accounting solutions such as Xero or Quickbooks Online, often driven by Making Tax Digital legislation. However, for charities who may not be VAT registered and generally aren’t liable to corporation tax, is it still worth making the switch from traditional desktop accounting packages? Many are put off by the perceived upheaval of making a change, sometimes together with a lack of in-house resource or expertise to facilitate this.
There are undoubtedly a huge range of benefits to charities of adopting cloud accounting, including:
- Considerable time saving of automating data entry through bank feeds and data capture software
- Meaningful well-presented reports can be produced very quickly after the period-end, enabling trustees to make more informed decisions based on current rather than potentially out of date historical data
- Frees up more time to spend looking forward on budgeting and adapting the charity in a challenging funding climate
- Tracking categories can be used to keep track of restricted funds which facilitates reporting to grant funders
- Reduced scope for human error through automation increases the reliability of accounting data
- Can have an unlimited number of users and is accessible from anywhere with an internet connection e.g. a trustee can log-in and review figures to improve financial control
- Empowers budget holders to approve and post invoices directly to their cost centre and view real-time reports against budget
- Facilitates statutory requirements to submit Real Time Information for payroll and pensions
- Cloud accounting software is always up-to-date, as opposed to using an old desktop package for which support is rapidly being phased out
Garbutt + Elliott is an accredited Xero Platinum Partner and also has in-house expertise enabling us to support Charities who use Quickbooks Online.
By way of a case study, we recently implemented Xero for charity Client ‘A’ who operates more than 25 projects over 6 different geographic sites. They were looking for a solution which enabled them to easily report budgets versus actuals, at both project and office level. The existing system was driven by excel exports which were not easily adaptable to changes in the organisation e.g. new projects. Xero has revolutionised their reporting and as a result budget holders are now able to take full responsibility for their cost centres.
Client ‘B’ uses Quickbooks Online and we are able to produce timely quarterly management accounts and deal with adhoc queries, all remotely and with minimal time input from the clients side.
If you are interested in what cloud accounting can do for your charity then we can help by giving you a free trial or demo and by supporting you, as required, through the conversion, new system set up, data migration and training. Contact us at firstname.lastname@example.org..uk