Are you a small business owner in Canada trying to understand how to manage your accounting to eliminate stress and stay compliant on CRA filing? You may want to consider cloud bookkeeping. In this beginner’s guide, you will find out what cloud bookkeeping is, how it works and an outline of how cloud bookkeeping can ultimately save you time, money and stress!

What Is Cloud Bookkeeping?

Cloud bookkeeping is a new way of managing your finances online with accounting software. Rather than managing your books using desktop versions of accounting software or on paper, cloud bookkeeping uses accounting software that stores copies of your financial records securely online that is on “the cloud”.

How Does Cloud Bookkeeping Work?

Cloud bookkeeping platforms include several bookkeeping software options including QuickBooks Online, Xero, Wave Accounting, FreshBooks, etc. With cloud bookkeeping you can take the following actions:

1. 1. Signup:  Choose a software that best fits your needs
   2. Setup Account: Add the basic details of your business
   3. Automate transactions: Link your bank and credit cards to automatically import and categorise your transactions
   4. Collaborate in real-time: Share access of your accounting file to your accountant or bookkeeper instead of emailing spreadsheets with conflicting versions
   5. Monitoring via Instant reports: Create a profit and loss reports, cashflow reports, GST/HST reports easily with just a click of a button

Benefits of Cloud Bookkeeping for Canadian Business Owners

Here are a few reasons why cloud bookkeeping is fast becoming the preferred method of bookkeeping for small businesses and business owners in Canada.

Less Time on Data Entry

Cloud accounting software will reduce your data entry by automating your bookkeeping. Less time manually entering numbers means more time strategizing more important needs of your business.

CRA Accessible Year-Round

Cloud accounting softwares has all kinds of features that will help you manage your GST/HST, payroll, and expenses while keeping you compliant with CRA.

Access Your Books Anytime, Anywhere

With cloud-based systems, you can access your financial records anytime, and from anywhere. Whether you are on your laptop or your mobile phone, you can check your invoices and cash flow whenever you want.

Collaboration with Accountant is Made Easy

Your accountant can just log in to see your books live as they happen! No more emailing or scanning receipts, invoices, and sending Excel spreadsheets. This not only increases accuracy, it will help reduce your overall accounting fees at year-end,

Cloud Bookkeeping Scales as you Scale

Cloud bookkeeping is as scalable as you are; once you get used to the software, you can add more clients, hire more staff or sell more products and services without having to swap or change systems.

Security 

Your data is encrypted, kept on secure third-party data servers and backed up daily decreasing the risk of missing or fraudulent transactions.

Top Cloud Bookkeeping Software in Canada

Are you unsure which cloud bookkeeping software is the best choice for you? The following are the top picks by Canadian businesses for Canadian businesses:

• • QuickBooks Online – A perfect option for small to medium companies with full Canadian tax compliance.
  • Xero – Very easy to use and makes space for service-based industries.
  • Wave Accounting – Offers free software which is perfect for freelancers and startups.
  • FreshBooks – Popular for intuitive invoicing and time-tracking.

All of these online bookkeeping tools support Canadian currency, tax codes, and at least some bilingual options, hence making it most appropriate for Canadian business owners.

Our Preferred Software: QuickBooks Online

Although one is not short of options when choosing the right bookkeeping software, we prefer working with QuickBooks Online and for good reason: It gives you convenience, power, and flexibility to provide you with what you need, from a freelancer to a scaling company. 

Here are some reasons we recommend QuickBooks Online:

• • Easy to Use: QuickBooks Online is built specifically for non-accountants so you can easily navigate, enter, and report on your financial data.

• • Bank Synchronization and Automation: It easily connects to almost all major banks and credit cards, importing your transactions automatically, sorting them into proper categories, and reconciling with ease.

• • Reporting Options: The quick look at any item shows numerous report types, all customizable and easy to read, so you can make better decisions.

• • Scalable for all levels: Whether you are starting out or scaling your business, QuickBooks Online has several tiers with options like time tracking, inventory, and advanced reporting to scale with you.

• • Third party integrations: For over 600 business apps, including Shopify, PayPal, Gusto, HubSpot etc., create the ecosystem you need, all while working in QuickBooks Online.

• • Accountant-friendly: Since QuickBooks Online is an extremely popular and widely used app in the accounting profession, you can almost guarantee that your accountant will already have a full and complete understanding of the software. This makes it much easier for you to work together.   

• • Mobile app: QuickBooks Online’s stellar mobile app allows you to send invoices, track mileage, take photos of receipts, and see important financial information anywhere you have internet access. 

Overall, no other cloud bookkeeping software compares to QuickBooks Online. You get professional-grade tools and the ability to access them at any time. Whether you are doing your own books and taxes, or working with an accountant, QuickBooks Online gives you the visibility and control you need in today’s modern world.

Conclusion

If you’re still using spreadsheets or paper receipts, it might be time to make the switch. Cloud bookkeeping gives you real-time insights, improves accuracy, and helps you stay on top of CRA requirements without the stress.

Whether you’re a freelancer, an incorporated small business, or a growing startup, cloud bookkeeping can give you peace of mind and more control over your financial future.

Do you need help or have any questions? Let us help you. Get in touch with us here or sign up to get more accounting and tax tips in our newsletter here.

The accounting and tax information provided in this post does not constitute advice and is meant to be for general information purposes only. The information is current as at the date of this post and does not reflect any changes in accounting and/or tax legislation thereafter. Moreover, the information has been prepared without considering your company or personal financial/tax circumstances and/or objectives.