Extending Cloud-Based Accounting with Add-Ons
Imagine what accounting websites would look like if their developers tried to include absolutely every feature that a small business might want. If that were even possible, such a financial solution would be unusable.
Instead, today’s state-of-the-art cloud-based accounting applications are designed to meet the needs of a wide range of businesses. That is, they support the financial activities that are most commonly used in the bookkeeping process. They follow a set of rules that has been in place for centuries, but each has a different way of implementing these guidelines.
All of them are built around a core group of accounts that are used in transactions like invoices and purchase orders. There are specialized forms where details about customers and suppliers, employees and inventory items can be stored. All of the information that’s entered about a company’s income and expenses can be displayed in a number of ways, including pre-built but customizable financial reports.
Why would a small business need more than that? Because in order to appeal to the broadest audience, web-based accounting solutions have to support basic bookkeeping functions without being too deep and complex in any one area.
In other words, accounting applications didn’t evolve the way Microsoft Word did, for example. Word’s feature set is far too complex for the average user; he or she might use 10 percent of its functions and ignore the rest.
You can spend hundreds of dollars for desktop accounting software. But that’s not where the growth is. The most innovative changes are occurring on the internet. Cloud-based applications are sold on a month-to-month subscription basis, so there’s no major outlay of money at the start.
Right in the Middle
Top-of-the-line cloud-based accounting applications are overkill for some small businesses. You don’t need a full-featured bookkeeping solution to create invoices and track basic income and expenses. So there are websites designed for those more limited functions.
On the other hand, some companies might use a good percentage of the bookkeeping tools found in state-of-the-art web-based applications, but they have needs in one or more specific areas that can’t be met. They could invest a great deal of money monthly in what’s called a “midrange” solution. And some might need that.
But small businesses may also be able to keep managing their finances in their same familiar work environment—and avoid the somewhat prohibitive cost of a midrange accounting site by incorporating “add-ons.”
The best cloud-based small business solutions are associated with dozens—even hundreds—of these. Add-ons are online services that can add flexibility and functionality to your accounting application in one specific area. Many of them can be used on their own, but they can also be integrated with—connected to—a full-blown accounting website.
Basically, you’re still using the same site you were using for your accounts receivable and payable, your product-and service-tracking, your banking and payroll and reports. But when you start working with a feature that you’ve integrated with an add-on, whether it provides more sophisticated functionality in eCommerce or CRM or point of sale, time-tracking, bills and expenses or payments or any of the many type of activities supported, you’ll have access to those expanded operations.
Anything you change at your home base or on your add-on will be reflected in the other, so your data always remains accurate and current.
It’s an interesting, volatile time in the evolution of computer-based financial management. So don’t be surprised if you’re confused when you start looking around at your options. In fact, this is one instance when a Google search isn’t necessarily wise. Better to consult with an advisor who knows the pros and cons of what’s available.
Financial professionals don’t just work with numbers anymore. The best of them are also experts in the technology that’s available to small businesses today. They can learn about your company’s structure and needs, and make recommendations about what solutions might be good fits for you.
Further, they can help with implementation and continue to support you as you learn a new way to manage money. Consider their input and advice, as well as the insight you’ll get from your cloud-based accounting application, and you’ll likely be making smarter business decisions.