In the span of a few years, cloud technology has made a significant impact across all sectors. It has brought increased efficiency, innovation and productivity to numerous industries especially finance. Many cloud accounting software has emerged that simplify the accounting of a business.
Unlike the on-premise accounting system, a cloud based accounting solution is hosted on remote servers enabling you to access it through the internet. The business and financial data can be sent to the cloud, where it will be processed and returned when required.
Cloud accounting enables businesses to get real-time visibility into internal operations and automate financial processes. The cloud based financial bookkeeping frees the business from installing and maintaining the software on an individual computer. Also, it allows the businessmen and employees to access the same data and the same version of the software from the branch office or remote.
Cloud-based Vs Traditional accounting:
There are some key differences between cloud accounting and traditional accounting methods. Cloud accounting is more flexible and allows anyone who has access to the cloud account to get real-time data from any device and location.
Whereas, in traditional accounting, you need a specific computer to run the software hosted locally. Since these are handled manually, it takes time, and the users should use the same computer to access the software that is installed to handle the accounting.
The change begins with cloud accounting:
It has been rightly said that “time is money in a business world”, and it does well with the accountants who act as the company’s backbone. With cloud accounting, many things have been simplified, and it helps in knowing the important information easily, which empowers the accountants to increase the efficiency.
- It is a solution that will help the companies to:
- Run more efficiently
- Make better financial decisions
- Understand the finance better
- Make things better for the company
What are the benefits of opting for cloud accounting to your company?
The cloud accounting software encompasses many solutions which are specially designed to serve a number of accounting or bookkeeping functions. For instance, Xero is cloud based accounting software, whereas Expensify is a cloud-based solution that helps manage employee expenses.
Here are some of the benefits which your business can get with cloud accounting:
- Ability to automate manual accounting and bookkeeping processes – These automation capabilities will enable accountants to save time and increase efficiency. This will allow the clients to spend time on the business growth.
- Ability of data to be accessed regardless of the device or location – This facilitates the remote services of communication at any time. It will build a strong relationship for the accountants with clients. Since the data can be accessed at any time and anywhere, it will be more beneficial, especially during remote working.
- Ability of the data to be updated in real-time – Cloud based accounting offers the ability to access the financial data and information in real-time quickly. This will help in making informed decisions sooner.
- Ability to easily scale up to meet the growing business needs – The manual accounting will be easier when you make 0-100 transactions per month, but it will get more complicated when this number jumps to more than 10,000 transactions per month. Cloud accounting will easily support this growth.
- Ability to facilitate the paperless environment – It will eliminate the need for the physical store and manage the paper documents. This will be beneficial in both cost and space-saving for the business environment.
- Ability to provide automatic updates – This will further improve the functionality of the applications and better enforce the security.
- Ability to reduce the costs – Cloud accounting will not incur the costs associated with the traditional software, including the upgrades, maintenance, system administration and many more.
- Ability to integrate with the other cloud solutions – These offer integration capabilities that will improve efficiency and increase the power of the cloud accounting technology stack.
- Ability to simplify tax compliance – Cloud accounting helps you show them things like how much tax you owe or how much you have paid overtime on a specific tax.
- Ability to centralize the important tasks – Several aspects like managing inventory, payroll, invoices and even other details can be tied up with the cloud accounting software.
Is cloud based accounting secure?
With the sensitivity of the data associated with the cloud computing applications, security is the top concern in the cloud accounting space. Compared to traditional accounting with software that could be compromised if the company’s computer is stolen, damaged or lost, the cloud accounting software has many security advantages.
Each cloud accounting solution has its own security policy outlining how it will protect sensitive data. Most solutions offer measures such as multi-factor authentication and encryption, ensuring the security of sensitive data.
What kind of cloud accounting software does your company need?
Quickbooks Online and Xero are the popular cloud accounting software. The key benefit of cloud accounting applications is that you can build the accounting software stack to suit the business needs better and improve the efficiency of the workflows.
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The cloud accounting software is often available for purchase as a Software as a Service (SaaS) subscription model. The pricing of the cloud accounting software stack usually varies based on the applications used to meet the unique business needs. If you are running a business, then find it difficult to handle the accounting, then outsource cloud based bookkeeping services for your growing business and maintain a competitive edge.
What will happen if you don’t use cloud based technologies?
The cloud is the future of the business world. Even if your on-premise accounting solution functions just fine, this cloud accounting will simplify the tasks. Know that the world of accounting is inevitably changing, and it’s important for every business to keep up with it.
The risk associated with traditional accounting isn’t the question about its capability but its about whether it will help the business grow and maintain the competitive edge. The change can be difficult at first glance, but its potential business benefits will outweigh the costs and be worth consideration.
Future of cloud computing:
Nothing stays the same forever, and every day a new technology are being developed and introduced in the market. This will create a huge impact on the future of businesses. There is no doubt, that the cloud accounting will develop in the future and change the regular method of accounting.
With the right cloud accounting, you will not only be able to track the recent financial data but track the data of the entire industry across decades of recorded data if used regularly. It will also help you check the financial health of the company.
Desktop accounting applications might be on the way out, so transitioning to cloud accounting is the smartest choice in today’s world. It will reduce the expenses of accounting and bookkeeping. Also, it won’t just make the financial management more efficient but also save time so that you can start focusing on core business goals to get long-term success.
Millions of businesses use cloud accounting; hence it’s time for you to switch to cloud accounting to help your business thrive in this competitive world.