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Cloud accounting: How it could benefit your practice

The run-up to a new financial year is a good time for practices to review their accounting processes and consider a cloud-based approach, says Laurence Slavin.

Cloud accounting means practices can access their accounts from anywhere (Picture: iStock)
Cloud accounting means practices can access their accounts from anywhere (Picture: iStock)

Clouds have drifted into the world of accounting, bringing huge benefits for GP practices and federations.

Cloud-based accounting differs from standard GP accounting in the following three ways.

Access from anywhere

Firstly, the programme is held in the cloud – not on a PC or laptop.

This means that any individual with the right authority can access the programme from wherever they have internet access, at home, surgery, holiday, on their laptop, tablet or smartphone.

It also means that bookkeeping does not need to be done at the surgery or even locally.

Link to bank accounts

Secondly, some cloud-based accounting programs link directly to the practice bank accounts, so each morning, all the transactions from the previous day fall into the bank account in the programme. This means that bank reconciliation becomes simple – all the transactions are included, all the user has to do is to give each item an expense or income code.

Practice accountants can be more involved

Thirdly, since many of these cloud-based programmes are full accounting programs rather than spreadsheet based programs, the remote access allows practice accountants to become more involved setting up budgets and quarterly reports.

This means that the practice or federation has better information and earlier, so that any problems in claiming or overspending can be picked up quickly and resolved without waiting for the annual accountants’ meeting.

Additionally for federations, if accountants can work remotely on the accounting this helps the directors meet their corporate responsibilities. They can obtain regular comprehensive reports covering the profitability of the federation, the profitability of individual contracts and the overall solvency of the federation.

What to consider when moving to cloud accounting

There are some key issues to address to ensure a successful move to cloud accounting.

Practices should ensure that all of the users who can access the programme have the right level of access. The people involved with the bookkeeping and the practice accountants will need rights to access all parts of the programme while other users, such as most of the GP partners and federation directors, should have read-only access.

It is critically important to set up the right chart of accounts – the list of account headings and sub-headings you want to use – if you want to track the profitability of a particular activity. Your accountant will be able to help you with this and may well be able to import their own chart of accounts remotely.

The budgets should be set up at an early date and constantly reviewed.

The programme will have a number of reports that can be made available to users with access, and the usefulness of the reports will depend on how they are set up and what they show. The programme will allow some flexibility in the design on the report and your accountant will be able to help with this

If you are changing your accounting program to a cloud-based option it would be sensible to run your existing programme in parallel for a period of around three months until you are happy that you can move ahead with the cloud-based programme.

The world of accounting is changing, and it is worth practices looking at the options in the run-up to March to consider starting the new financial year with a cloud-based programme.

  • Laurence Slavin is a director of Ramsay Brown Cloud Accounting Limited and a partner at Ramsay Brown and Partners, which specialises in the finances of GPs and their related business. For more information on how cloud accounting can help you contact Emma Pottinger at emma@ramsaybrown.co.uk

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