Accounting is a field that changes on a regular basis—staying abreast of these changes can mean the difference between business success and failure. Following are two important changes in accounting in 2014 that every small business owner would do well to be aware of.

Rules and Standards are Changing
IAS, IFRS, and FASB are all introducing changes this year that are sure to affect a wide range of businesses. These changes include:

  • There are changes in how leases are accounted for.
  • Actuarial gains and losses are now being referred to as remeasurements and recognized immediately as being part of “other comprehensive income.”
  • An investor’s power over his or her investments will affect the amount of the return.
  • More detailed disclosures are not required in cases involving interests in subsidiaries, interest in joint arrangement and associates and interests in unconsolidated structured entities.

These are just a few of the many changes that the above-mentioned boards are introducing in an effort to make accounting more honest and free from mistakes. Some of these changes take effect immediately, while others do not take effect for some time. Even so, being aware of these changes will help a business log important information in an adequate manner.

Rise in Cloud-Based Accounting Software
Those who have switched over to a paperless, online document management system are now taking things a step further and using a Cloud-based accounting management system as well. While companies have been using accounting software programs for some time, there are some distinct advantages to switching over to an internet-based program. These include:

  • Traditional software goes out-of-date very quickly; however, Cloud-based software can be updated almost immediately.
  • Cloud accounting is not only fully secure but also impervious to loss or damage that could be caused by a natural disaster, robbery, or vandalism.
  • Cloud-based accounting makes it easy for a person to log in important information without having to be physically present at the office. Cloud-based software can be accessed from anywhere in the world, and most Cloud-based programs are also compatible with smart phones.
  • Working online allows two or more individuals to keep tabs on company account information simultaneously, even if these individuals do not work in the same office or even the same city. This ensures that all the information is current and up to date and also makes it possible for accountants to easily communicate with a company’s owner and/or management team.

Accounting is a tedious yet vital part of running any type of business. Keeping proper accounts ensures that your company stays in the red, helps you find ways of cutting back expenses, and enables you to take advantage of appropriate tax deductions. Those who are in charge of maintaining company accounts will want to pay close attention to important changes and improvements in the way that accounting is done. Doing so will enable a company to stay in step with the times and ensure that no mistakes are made in either company records or tax records.