7 Cloud Accounting Hacks Every SMB Needs to Know

1. Optimize Cash Flow with Smart Invoicing

One of the biggest challenges that business owners face is cash flow management. Smart invoicing can fix this problem.

You can eliminate this problem by setting up automatic invoice reminders, which reduce late payments by keeping your clients informed about due dates.

One of the best ways to do this is to use an online payment platform like Melio to pay your business bills. This makes it easy to find all your expenses and discover when it’s time to make an income statement. 

Accounting software like Xero and Quickbooks Online are robust tools that allow accountants to set up invoice reminders, allowing businesses to have a healthy cash flow profile.

On top of that, these tools will allow you to accept payments with options like credit cards, ACH transfers, and PayPal. Providing multiple payment options will encourage faster settlements and provide flexibility to your clients.

As most virtual CFO services suggest, you can also deploy dynamic pricing strategies (and offer early payment discounts) to incentivize prompt payments to improve the cash flow for your business.

Beyond these simple hacks, you can also utilize a few ways to improve your accounts receivable.

• Tools like Zoho Books and NetSuite automate the payment reconciliation for your business. This reduces the risk of errors and automatically records these payments for you in your books. 
• SMBs can also set up recurring invoices for long-term clients, thus eliminating the need to manually send invoices monthly. 

These automation tools will optimize your operations and allow you to focus on customer acquisition and retention rather than dedicating your attention to unpaid invoices.

2. Securing Your Precious Financial Data

Your finances are directly correlated to your business’s integrity. One of the best ways to protect this data is by introducing multi-factor authentication and role-based access controls, even if you’re working with an outsourced accounting and bookkeeping service.

Tools like QuickBooks Online Advanced provide role-based permissions. This only allows the authorized personnel to have access to different levels of your financial information.

Another good strategy is to build encrypted backups of your company data. Not only is this a robust strategy against cyber threats, but it also keeps your data accessible only to a selected group of individuals in your organization.

Tools like Acronis Cyber Protect and Veeam offer cloud-based encrypted backups, ensuring that businesses can recover their data in case of a cyberattack or hardware failure.

You can also educate your employees on cybersecurity practices and the dangers of downloading files from unknown sources to prevent data breaches. Use security monitoring tools like Splunk and Microsoft Defender for Business to identify vulnerabilities.

3. Take Advantage of Mobile Accounting

Mobile accounting is more of a convenience that business owners can hugely benefit from.

If you’re on the go and still want access to your financial information, mobile accounting is how you can do that.

Most accounting tools have dedicated apps that you can use to access your data and communicate with your clients, upload receipts instantly, or track your finances.

Mobile-friendly cloud accounting software and apps allows users to approve transactions, generate reports, and monitor financial performance from anywhere, ensuring flexibility in financial decision-making.

4. Use Financial Dashboards for Real-Time Insights

Real-time data is more reliable in decision-making than PDF reports. 

Smart business accounting means that you’re frequently approaching your accounting dashboard to analyze your data and see how it’s performing money-wise. Customized dashboards can be used to track key performance indicators such as revenue, profit margins, and expenses. 

Almost all cloud accounting software, including Xero, QuickBooks Online, and NetSuite, offer built-in dashboard customization. SMBs can use this data to monitor the financial performance of their company and make more informed decisions.

If you want a more detailed approach, you can even leverage AI to get a detailed forecast of events like seasonal fluctuations, manage working capital effectively, and optimize pricing models. Financial dashboards that integrate with CRM systems like Salesforce provide insights into customer purchasing behaviors, helping businesses tailor financial strategies to maximize profitability.

5. Automate Repetitive Tasks

Most of the repetitive tasks in your business could be automated – either manually or using AI. These tasks include invoicing, payroll processing, and expense management. 

Xero and Sage Intacct offer automated payroll features that ensure salaries are processed accurately and on time, reducing compliance risks.

Moreover, cloud accounting solutions like QuickBooks Online allow businesses to connect their bank accounts directly. This allows the reconciliation of incoming and outgoing transactions. 

You can also integrate the payment gateways with accounting platforms to facilitate seamless transactions and improve cash flow management.

For example, integrating Stripe or PayPal with Xero or QuickBooks Online enables automatic syncing of payments, reducing manual entry errors. AI-powered chatbots like Botkeeper can also assist with financial queries, providing real-time insights into outstanding invoices, profit margins, and expenditure trends.

6. Use Integrations for Maximum Efficiency

ERP integrations can metamorphically transform your business.

One of the best ways to get the maximum potential from your cloud based accounting software is by connecting it with CRM, inventory management, and payroll systems to ensure data synchronization. 

Platforms like Zapier facilitate seamless integrations between tools, reducing manual data entry.

For instance, integrating QuickBooks with Shopify streamlines e-commerce accounting, automatically syncing sales, taxes, and inventory updates. 

Even Xero’s integration with PayPal ensures that transaction records are automatically updated, eliminating the need for manual reconciliation. Businesses using NetSuite can integrate it with Salesforce to align financial and sales data, improving overall business efficiency.

7. Optimize Tax Deductions & Compliance

Another critical area where cloud accounting can be optimized is tax compliance.

Automated tax calculations and filings should be implemented to reduce manual errors and ensure timely compliance. 

Cloud-based tax software like Avalara and TaxJar integrates with accounting platforms, automating sales tax calculations and filing.

Tools like QuickBooks Online and Xero offer built-in tax compliance features that sync with tax regulations in multiple jurisdictions. 

Businesses can also leverage platforms like Melio’s marketplace. The community is designed to help small businesses save money, network with other business owners, and gain exposure. You can also benefit from products and services at discounted rates from businesses within Melio’s network.

Maintaining organized digital records simplifies audits and regulatory reporting, ensuring that SMBs remain compliant without unnecessary stress.