What do we mean by ‘online’ bookkeeping?
Online bookkeeping utilises ‘the cloud’. In layman’s terms the cloud is simply a way that data and software is stored online. By using online bookkeeping software you’ll have access to your bookkeeping software and business’s financial data through the cloud wherever there is an internet connection.
Unlike legacy or desktop-based software, online bookkeeping software doesn’t require lengthy install times on individual devices or require regular (and sometimes costly) updates every few months or years. Instead it allows you to work on any device with an internet connection, and automatically updates without you needing to do a thing (this means you’re always up to date with the latest tax rates and government legislation). Additionally, online bookkeeping software allows you to automate a lot of your financial processes like taking payments and sending invoices, making it a much better option than using spreadsheets to manage your business finances.
These are just a few of the great benefits that come with online bookkeeping software. Ultimately, with internet coverage increasing, and data costs coming down, people are seeing a vast benefit of using the cloud when it comes to their online bookkeeping. Online bookkeeping software gives you the freedom to manage your business finances and cashflow anywhere, at anytime instead of being stuck to a desk or office.
Is online bookkeeping secure?
We get asked about the security of our software a lot– and rightly so. When dealing with the financial data of your business it’s something you should take very seriously and be informed about. We take the security of your data very seriously at KashFlow!
There is a common misconception that data stored on your PC, Mac or home laptop is more secure than data that is store online or ‘in the cloud’.
There are three main areas where data can potentially be access when using any online or cloud-based service; while the data is in transit, while the data is in storage and, access to data within the physical data-storage unit.
Let’s drill down into each of these and compare them with storing your businesses’ financial data on your PC, Mac or home laptop.
Security of data in transit
By this we mean the instance when data is being transferred between your computer and the physical ‘cloud’ servers.
There is nothing to be done if a proficient and determined computer-whiz wanted to intercept any kind of data being sent across the internet. This is true of any kind of data including emails, online shopping transfers or streaming video content. What is possible is to encrypt this data so that it is effectively useless to anybody other than the two pre-determined endpoints.
KashFlow uses the same kind of encryption techniques used by all major internet banking facilities and online e-commerce transactions. This means that your data is encrypted to the highest-level while ‘travelling’ between you and your ‘cloud’ server making it super secure.
Security of data in storage
While your data is sat in the ‘cloud’ server how safe is it from others gaining access?
The ‘cloud’ servers that store your data are state-of-the-art, meaning they’re highly secure and protected by advanced firewalls. Always active and constantly monitored, these firewalls and precautions are active non-stop meaning your data is always kept safe to the highest levels with a lot of money being invested in keeping these methods up-to-date and efficient.
Compare this to the security of your home’s internet… can you say the same?
Physical security of data
What about people having access to the physical data server, can they remove it or tap into my data that way?
It’s unlikely. We use world-leaders in data hosting, meaning that the best physical security is provided. With a state of the art high security data centre built especially to house data that uses the latest technology straight out of a spy-movie; key cards, biometric scanning, round the clock surveillance and security, you can bet your data is protected.
Furthermore, all employees who work around the location where your data is stored undergo thorough and multiple background security checks and they cannot enter the data storage area without clearance and an escort.
If you’re keeping your data on your home PC, laptop or Mac, how well is it physically protected? Most people keep their laptops on their desk or somewhere easily accessible. If your home or office were burgled your laptop might be the first thing to go… and all your business’s financial data as well. By using online accountancy software still have complete control of business’s accounts, and ensure it was kept out of the sight of any prying eyes.
Why now is the time to consider using online bookkeeping software
There’s a whole host of additional reasons, benefits and features that make using an online bookkeeping software a great choice for your business. You can get a better overview by visiting our website here. It’s never been so important to consider using online bookkeeping software to start getting prepared for HMRC’s new digital tax system named Making Tax Digital. It’ll require you to use online accounting software by law to submit quarterly updates to their online portal or put you at risk of incurring penalties.
What is Making Tax Digital?
The UK government are introducing a new digital tax system in April 2019. Named ‘Making Tax Digital’ or MTD for short, this new digital tax system will be more efficient, streamlined, make it easier for you to get your tax right, and provide you with regular, real-time updates regarding your company’s finances.
Every small business owner and individual taxpayer will have access to a unique digital account provided by the HMRC. They will be required to update this with their expenditure, income and VAT quarterly. You will be required by law to use an online accounting software that communicates with HMRC, so you can send these regular updates and keep the HMRC up to date in near real-time.
This means that any offline or desktop-based accounting software that cannot communicate with HMRC will render your business non-MTD compliant and put your business at risk of fines.
MTD is set to impact a huge amount of small businesses, sole-traders and registered charities across the UK, starting April 2019. However, HMRC have staggered the staging date to make the transition easier for smaller businesses. You can learn more about MTD and when it will affect your business on our dedicated MTD Resource hub here: https://www.kashflow.com/making-tax-digital/