Cloud accounting is growing in popularity in Australia as businesses of all sizes recognise the benefits it offers. According to a 2017 report by PC World, 61% of businesses in Australia and New Zealand operate a ‘cloud first’ mentality when sourcing software products such as accounting programs. While cloud accounting is recognised for offering cost savings and increased efficiency, it has another major benefit – making loan approvals easier.
Let’s take a look at why business owners are switching to cloud accounting, and how it can enable you to take advantage of the growing alternative finance market.
In a 2017 Canstar Blue Survey, 87% of respondents said cloud software accounting makes business operations easier, 81% described it as ‘critical’ to their business, and 62% said it contributes to business growth.
The benefits of the cloud include:
While business owners often require finance to get started, they sometimes need it to continue operating as well. It’s not uncommon to get caught short while waiting for debtors to pay up, for example – a debtor might pay on 60-day terms, or simply be a slow payer. Waiting for payments to come in can really mess with your cashflow, making it difficult to pay bills and wages or invest in growth. Some business owners in this situation might resort to credit card funds to cover the gap – not an ideal scenario!
The alternative finance market offers a competitive and more flexible way of securing financing – without having to visit a single bank manager. For example, peer-to-peer (P2P) invoice financing can provide a business with funding equal to the value of its unpaid invoices, at a much lower cost than that of a credit card or traditional unsecured or business lending. This type of financing is growing very quickly in Australia. Research by KPMG shows that the alternative finance market grew 53% in Australia in 2016-17. Accessing business finance through the cloud is easier to do if you are already doing your accounting online. The application process is sped up, as the information required for the loan is already available in the cloud – accurate and up-to-date. Due diligence is easier for lenders, which also helps make the approval process faster.
Signing up for cloud accounting can make running a business more efficient, reduce costs, and make it easier to access flexible funding just when it’s needed.
As a peer-to-peer invoice financing provider, we reward clients that use cloud accounting, as it makes our due diligence process easier. If you’d like to explore how invoice financing equals more flexibility and less cost, why not talk to us?