Cloud accounting solutions – do they actually work? Results from two new studies answer with a resounding YES! And the best part is that they are actually saving small businesses money and helping them to get paid faster.
From invoice to payment, cloud accounting solutions can help you get paid faster. According to a Xero study, the average wait on payment for US businesses is 41 days, but with a cloud accounting tool that wait time is decreased to an average of 29 days.
Further, as these cloud accounting tools get more sophisticated, the wait time is dropping at an alarming rate. For example, from 2011 to 2013, Xero cloud accounting users saw a 37% decrease in the time from invoice to receiving payment.
Cloud accounting means fast payment, and it just keeps getting better.
The Xero study results are echoed in a new Dwolla survey on the same subject. The Dwolla survey was conducted to get a better understanding of the payment systems of small- and medium-sized businesses. Results showed a split between those writing checks and those using cloud accounting tools:
- Overall, 46 percent of businesses continue to write checks for payment
- The majority of baby boomers still write checks (68%)
- The majority of millennials use cloud computing (58%)
So those figures aside, why should small business owners consider using a cloud accounting tool? The survey gives some statistics on that question as well:
- Writing checks is inefficient and costly – SMBs spend $4 billion per year in the process of issuing, writing, sending and depositing checks.
- 46 percent of paper checks experience fraud
- 19 percent of SMB owners worry about their financial information being exposed at the bottom of checks
- The average small business owner spends 5 hours per week writing checks, or 60 hours per year
- The average small business owner spends up to $25 per month on check materials (including stamps, envelopes and travel)
- There are also many other costs when it comes to checks, including checks being lost in the mail, stolen or bounced.
Check out the infographic below for more on the impact and burden paper checks place on small businesses:
The downsides of checks are clear. But what is cloud accounting, and what can it do for your small business?
- Cloud accounting allows you to quickly and easily generate, send and follow up on all your invoices
- Cloud accounting means better access to your invoicing, billing and payment system – anytime, anywhere, and on any device
- Cloud accounting tools are inexpensive and highly effective
- Cloud accounting keeps your data safe – since information is backed up in the cloud, you never have to worry about important expense files going missing
- There are many cloud accounting options, so you can find one that works best for your business. Xero and Dwolla are two options. We’ve also written about other cloud accounting tools in the past – you can read those articles here and here.
The bottom line is that cloud accounting can help you save time AND money. Dwolla survey respondents reported that with the money and time saved, they would:
- Reinvest in sales and marketing software (27%)
- Spend more time with their families (22%)
- Invest in employee’s professional growth (20%)
So what about you?
If you’re currently using checks – what would YOU do with the time and money you could save by using cloud accounting?
And if you are currently using a cloud accounting tool – which one do you use and why?
Let us know by commenting below.