5 Tips CFO Should Know Before Adopting Cloud Accounting
- Living in a highly globalized and digitalized world, companies and firms are starting to digitalize their work in order to be more competitive and efficient in the fast-paced business world. One of the crucial features of a firm is to have a clear and transparent accounting record. However, conventional manual accounting systems have been criticized for their low working flexibility and high manual working error. Cloud accounting enables companies with an always up-to-date online solution from any device and anywhere.
Speaking of digitalizing financial management, companies and firms begin to shift their accounting businesses online by adopting cloud accounting services to stay ahead of their competitors. But what do we exactly mean as the ‘cloud’, and why is it important to businesses today?
Cloud accounting refers to the delivery of accounting services through software that is accommodated on remote servers – the ‘cloud’. The accounting software aims to increase the bookkeeping efficiency, integrate your financial administration, and provide real-time reporting of your key numbers. Unlike traditional, desktop-based accounting software, cloud accounting allows employees and business owners to access the same entries with a high accuracy level. Compared to conventional manual accounting systems, cloud accounting enables an always up-to-date online solution from any device and anywhere.
Benefits of Cloud Accounting
Secure financial data storage
Cloud accounting software provides highly secure storage of financial data than traditional, desktop-based software. Similar to online banking services, cloud service providers use encryption to rewrite account information into a series of codes when sending and storing data. Also, as online financial data is password-protected, accountants and companies have to access the same system and retrieve entries with their exclusive passcodes instead of physical flash drives to avoid information breaches.
Cloud providers often offer security measures such as an off-site automatic backup server, multiple segregated networks, and numerous segregated networks. As data are not kept on-site, it mitigates the risks of any natural or human-induced disasters.
Cloud-based accounting allows automatic synchronization of financial data. Keeping your books and bank reconciliation up to date brings complete real-time information and analysis over the corporation’s present financial situation. Instead of going over clutters of past financial reports to check for past mistakes, online accounting saves time. With access to instant reports and financial data, corporations could make informed decisions regarding the business’s financial future with organized numbers, insights, and key data.
Simplify tax compliance and payments
Cloud accounting generates reports and reminders to keep firms docile with the Inland Revenue Department in Hong Kong. For instance, it could show how much firms have paid overtime for a specific tax. Tax payment transactions would also be recorded and exported into relevant tax return templates for digital submission. Shifting accounting workbooks online thus assists in compiling relevant papers and information to file a successful disbursement.
Improve accounting accuracy
In manual entry accounting, there are always reports on the transposed number or erroneous calculations. With cloud accounting software, corporations could leave such concern behind. All relevant financial information like inventory on hand and supplies on hand can be concentrated on one cloud-based file, reducing possible human accounting errors.
Furthermore, online bank feeds are displayed and reconciled on the firm’s cloud accounting file. This ensures nothing is missed or added to avoid confusion and false accrual journals.
Cost-effective based on your company size and needs
To many small and medium-sized companies, it might be impossible to have in-house accounting executives or an accounting department due to the high labor and maintenance costs. By adopting a cloud-based accounting solution, the subscription-based operation that depends on the required number of users and services per company enables firms to control their costs while obtaining precise and accurate accounting records suited to their needs.
The world is changing every day, and new technologies are developed continuously to impact the future of small and medium-sized businesses. Cloud accounting software helps companies minimize their operating cost and maximize their profit in the long term. If you have not heard about cloud-accounting, it is undoubtedly time for you to look into what the fantastic online solutions can offer.
Written by Claudia Tam , Latin Department, CW CPA
Why Should Small and Medium-sized Businesses Adopt Xero?
Clear and systematic bookkeeping helps businesses keep a close check and track over the finances to ensure everything is in order. In the 21st century, cloud-based accounting services are gradually adopted with Xero as a fast up-comer.
Apart from offering a well-organized financial overview and report at the tip of your finger, the OCR function provided by Hubdoc also extracts and matches critical information by uploading it to Xero immediately. Minimal manual data entry means a reduction in manual working errors.
Xero not only saves time and improves efficiency but also enhances accounting accuracy. By keeping everything on the cloud, Xero also allows corporations to have real-time collaboration with their advisors and generate reports for their every need. It is time for companies to look at online accounting solutions to improve their productivity.
Last year, CW CPA became a Xero Bronze Partner in Asia. We now have certified Xero Advisors helping businesses manage finances on the cloud and businesses in Greater China.
Contact us to know more about our Xero Accounting Package today!
Bookkeeping provides a clear and logical way for businesses to keep a close check over their financial data to ensure everything is in order. Operations need to adorn with concise and up-to-date financial reviews to stay on track with their business. However, most small and medium-sized companies do not have an in-house accounting department due to the high maintenance cost, and this is where CW and Xero chip in.
CW has implemented the Xero accounting software in both our bookkeeping and auditing services. With Xero, we deliberately highlight the importance of cloud-based accounting solutions in the highly digitalized world. One of the most significant advantages of Xero is that it presents a well-organized financial overview and report at the tip of your finger. Xero‘s dashboard design allows owners to quickly see all the transactions, as well as all the creditors, debtors, and bank balances. This promotes fast and easy tracking of payments and minimizes bookkeeping errors. The OCR function provided by Hubdoc, which is a data capturing software, extracts, includes, and matches critical information from bills and receipts and upload to Xero right away with minimal manual data entry. This not only enables instant reconciliation with bank feeds but also reduces and eliminates manual working errors.
Accounting firms and businesses have employed Word and Excel workbooks to track expenses and incomings and generate audited financial statements. However, human data entry might be prone to errors. With Xero, all invoices, quotes, and payment services could be customized to your needs. Digitalization of the accounting process allows easy tracking as all documents are recorded and saved on the cloud system upon creation. By getting a clear overview of the accounts payable and cash flow, corporations would obtain quicker cash flows, minimize outstanding receivables, as well as perform instant payment settlements.
Another significant selling point of Xero is its multi-currency accounting function. With over 160 currencies available on the online system, Xero can convert international transactions instantaneously with just a click. Users could view rate change updates to see how the dynamic currency markets affect cash flows or profit. If you are working with foreign corporations, Xero will reduce your burden by generating reports in local or foreign currencies. It reduces the time needed to produce an accurate financial report in foreign currency and makes your work more efficient.
Finally, with an unlimited number of users per account, Xero makes it easier for enterprises to collaborate with our professional financial advisors. Business owners could simultaneously share and view financial and accounting reports, so they no longer have to wait for month-end to access the reports and KPI details. Besides, Xero would compare and calculate budgeted and actual amounts in real-time by using inputted formulas and generating accurate reports to demonstrate how well your business performs.
CW CPA and Xero have an active Channel Partnership, according to www.xero.com.
Download our latest XERO Accounting Package today!
By keeping everything online, corporations could have real-time collaboration with our experienced accounting advisors and customize the reports to suit your every need. Xero is the perfect choice for small and medium-sized companies by serving as an immensely flexible and all-in-one accounting solution.
Written by Claudia Tam , Latin Department, CW CPA
Are you considering an IT upgrade in Hong Kong? Is your company adopting the idea of remote working or service?
Under the Anti-Epidemic Fund, the Innovation and Technology Commission has launched the Distance Business (D-Biz) Programme (“the Programme”) to provide funding support through fast-track processing for enterprises to adopt IT solutions for developing distance business.
For each IT solution and the relevant training expenses for the employees, the funding ceiling is HK$100,000 (with funding for the relevant training expenses capped at 10% of the IT solution cost). Each enterprise may receive total funding of up to HK$300,000 to undertake a project to be completed within 6 months.
The Programme covers 12 categories of IT solutions for distance business:
- Online business
- Online order taking and delivery, and smart self-service systems
- Online customer services and engagement
- Digital customer experience enhancement
- Digital payment / mobile point of sale
- Online / cloud-based financial management systems
- Online / cloud-based human resources management systems
- Remote document management, cloud storage and remote access services
- Virtual meeting and conferencing tools
- Virtual team management and communications
- Cybersecurity solutions
- Other online / custom-built / cloud-based business support systems
The Programme provides an IT Service Providers Reference List (“Reference List”) to offer relevant market information for enterprises’ reference. Service Providers are welcome to apply and enroll to the Reference List. Enterprises interested in upgrading their IT infrastructure should apply for the IT funding by referring to the Reference List.
To increase your success rate, here are some tips we would like to share with you:
- Enterprises are required to undertake that the relevant project (with maximum 3 IT solutions) would be completed within six months;
- Expected project benefits (maximum 800 words) need to be explained;
- Every procurement in relation to the project would require two fee quotes from IT service providers;
- An external auditor should be engaged for any project amounting to HK$30,000 or above; 2 fee quotes are needed (maximum amount to be claimed: HK$3,000);
- Probity and Non-Collusive Quotation Certificate need to be signed by each vendor and auditor providing fee quotes; and
- Only ONLINE application is accepted (that might take around 2 hours because it would take time to upload documents of different sizes and formats and probably of busy traffic).
Whilst the Government has started accepting applications on 18 May 2020, your swift action is important given that the total amount of funding is limited at HK$500 million.
In application for the Distance Business (D-Biz) Programme, CW can provide the following services:
- For IT companies
With the application for enrolment to the IT Service Providers Reference List including
- Gathering the supporting documents, and
- Preparing and submitting the application.
2. For other businesses interested in adopting IT solutions
With the D-Biz funding application including
- Reviewing the supporting documents, and
- Project audit, if required.
Written by Toby Wong, China Consultancy Team, CW CPA
The Government of Hong Kong SAR has rolled out a HK$137.5 billion package of anti-epidemic fund measures, objectives of which include helping businesses stay afloat and relieving their financial burdens. While some of the measures were designed specifically for specific business sectors, some are widely applicable and do not restrict the industry types.
This article will showcase some of the funding schemes that may be of your interest.
1. Wage Subsidy
Under the Employment Support Scheme (the “Scheme”), the Government will provide a wage subsidy to eligible employers to retain the latter’s employees and pay up to 50% of employees’ salaries for six months in two tranches, capped at HK$9,000 per employee per month. The application process is separated into two rounds. In the 1st round, applications would be starting from 25 May 2020 and the subsidies for the first tranche for June, July and August would be handed out to employers within 3 to 4 weeks of an application. Employers are allowed to apply for subsidies based on wages recorded in one of the months between December 2019 and March 2020 at their own choice.
Below are two undertakings that employers receiving the first tranche of subsidy have to comply with:
- They have to spend the whole subsidy on the salary of their staff in June, July and August 2020;
- The number of people who receive pay in June, July and August 2020, cannot be less than the number of employees in March 2020 – no matter if they were paid or not paid at all in March.
If the undertakings are breached, the unspent balance of the subsidy will be clawed back or a penalty shall be paid according to the size of staff force and the extent of staff reduction.
Besides eligible employers, self-employed persons who have set up an MPF account on or before March 31, 2020 and with that account remaining opened as of the same date may apply for a one-off subsidy of $7,500.
2. Distance Business (D-Biz) Programme
The programme will provide funding support through fast-track processing for them to adopt IT solutions for developing distance business. For each IT solution and the relevant training expenses for staff, the funding ceiling is HK$100,000 (with funding for the relevant training expenses capped at 10% of the IT solution cost). Each company may receive total funding of up to HK$300,000 to perform a project to be completed within 6 months.
(i) For IT service providers
An IT Service Providers Reference List will be compiled to offer relevant market information for enterprise’ reference. The reference list is now open for application. Service providers, which provide solutions software or platform that support distance business operation, and/or provide services for the implementation of distance business solutions, are welcome to apply and enroll to such list.
(ii) For other businesses interested in adopting IT solutions
All private enterprises that commenced business in 2019 or before and have substantial business operations in the industry related to their proposed IT projects may consider applying. Applications are now open until late October 2020 and are assessed on a case-by-case basis. The assessment criteria include:
- Relevance of the proposed project to the applicant’s business
- Reasonableness of the budget
- Reasonableness of the implementation details
- Capability of Service Provider(s)
In addition to the above two schemes, the Government has also announced other measures covering specific types of industries such as legal, real estate, banking and finance, aviation, transport, sports, catering, tourism and construction, focusing on job creation, job advancement and provision of financial relief.
What CW can do for you
CW can assist our clients with the application of the above two schemes including
- gathering the supporting documents,
- preparing and submitting the application, and
- tracking the application status.
Written by Toby Wong, China Consultancy Team, CW CPA