Cash Flow Management and Cloud-Based Accounting
Improved Cash Flow Management and Cost-Savings Enabled by Cloud-Based Systems
There’s no denying the harrowing economic effects of COVID-19 in South Africa. Regardless of sector or size, all business owners are focused on ensuring their organisations’ short, medium and long-term survival.
Thankfully, the same systems that enable remote working for the safety of individuals are helping companies’ cash flow too. We are talking about cloud-based systems, which, we believe, will be an integral part of business operations and future economic survival.
The Cost-Saving Benefits of the Cloud
Long before the coronavirus crisis, the cloud has been recognised for its cost-saving benefits.
Cloud-based systems are significantly cheaper than their on-premises counterparts from the onset as hardware is leased and not purchased outright. Installation and configuration require less labour and is, therefore, less expensive as well. After migration or setup, monthly expenses are lower too.
All cloud-based systems are billed monthly on a subscription basis. Most of these subscriptions are charged per-user so you are not paying more than you ought to for “up to” a specific amount. What’s more, is that software updates are automated, so employees are always working on the latest version for the same fixed monthly fee.
As the entire service (not only the licences) is hosted in the cloud, businesses save on operating and maintenance expenses. The monthly subscription fee includes the infrastructure operating expenses at a fraction of what a physical system would cost.
Finally—though not as tangible but virtually invaluable—the cloud helps to mitigate business risk substantially. The data centres that house cloud systems are far superior to that which businesses can viably maintain on their own. Sophisticated technology protects against physical damage and cybercriminal activity, safeguarding against downtime and data loss, respectively.
Cloud-Enabled Cash Flow Improvement
Naturally, the cost-savings offered by the cloud reduces spend (and, therefore lowers cash outflow) but there’s more to this than meets the eye.
Cloud applications are notoriously “paperless” resulting in even more savings and operational efficiency. Cloud services also help with automating numerous processes, which not only free up resources to perform revenue-generating tasks, but reduce (costly) human error. Greater efficiency improves output, which almost always equates to higher revenue—improving cash inflow.
With most operations running electronically, business owners (and accountants) gain greater visibility of where and how resources are used. This helps to pinpoint superfluous spend, duplications of effort and even identify fraud or theft!
Such data-driven insight also serves to improve decision making around where the organisation can further optimise, lowering expenses and increasing productivity.
From an accounting https://www.exceed.co.za/audit-accounting-2/audit-accounting-services/accounting/ and tax https://www.exceed.co.za/audit-accounting-2/audit-accounting-services/tax-advice-and-compliance-services/ perspective, without the physical infrastructure to maintain, the business reduces capital and salary expenses. All the cloud services can be allocated to operational expenditure.
Counteracting the Impact of COVID-19
While lockdown restrictions have hit businesses hard, a remote workforce does offer some respite. Companies that migrated entirely to the cloud have sold their commercial property or exited rental agreements, drastically reducing overhead expenses.
Beyond rental or bond repayments, the business also saves on levies, utilities and even simple expenses like sundries (that add up quickly) that can be replaced by a much lower telephony and Internet employee benefit (added to CTC, depending on your salary structure).
Empirical Evidence of the Cloud’s Cost-Saving and Cash Flow Improvement Abilities
We at Exceed can attest to the benefits and success of cloud-based systems both within our business and in servicing our clients through our tailored cloud accounting services https://www.exceed.co.za/audit-accounting-2/. Where our clients have adopted cloud-based systems, we have seen quantifiable cost savings and increased operational efficiencies in their businesses.
In our opinion, remote working and cloud services will be an integral part of businesses that not only survive but thrive in the post-COVID-19 economic reality.
Remote Accounting, Tax and Auditing Knows No bounds
The final, yet no less important benefit of cloud services is that they can be deployed rapidly. In fact, your business can enjoy our remote accounting, tax and auditing services almost instantly. This comes as a relief to companies that have audits due by 31 August https://www.exceed.co.za/audit-accounting-2/audit-accounting-services/auditing-and-assurance/ (in line with a financial year that runs 1 March-28 February).
We offer an “off-site” audit service https://www.exceed.co.za/audit-accounting-2/audit-accounting-services/auditing-and-assurance/ by way of cloud service, which has proven highly reliable, convenient and efficient. By using our integrated cloud and technological audit tools, we remain in close contact with our clients to ensure that the audit is conducted in accordance with the highest professional and technical standards demanded.
If you want to know more about our cloud-based systems, and how we can assist you and your business, contact us today https://www.exceed.co.za/contact-exceed/.