Post pandemic, traditional accounting methods aren’t proven to be effective. Both accountants and business owners have been looking for better alternatives lately. One alternative, as well as an emerging trend right now, is cloud accounting software.
It has been a great option for accountants and business owners to look at. In this digital age, the finance field is growing at a faster pace adopting new technologies. Accountants working with new technology such as cloud accounting can make their work easier and more efficient too.
However, some professionals think accounting software will take their job away. That’s nothing but a big myth. Both accountants and the software can work hand in hand to provide a seamless and effective service to their clients.
This article will talk about how cloud accounting can come in handy for the accountants out there.
○ What is Cloud accounting?
○ How does cloud accounting work?
○ Benefits of cloud accounting
○ Wrapping it up
What is Cloud accounting?
To understand cloud accounting, we must first understand cloud computing.
What is cloud computing in simple words?
Cloud computing is accessing and storing data and programs over the internet. This means your data and software are not saved local hard drive but on servers accessed via the internet. Accessing Gmail, Hotmail, or yahoo mail is the best example of cloud computing.
For a long time, business books were maintained manually on large physical paper registers – called ledgers. With technological advancement, it moved to excel and a bigger business to Oracle and SAP-based programs. Firstly, these programs were saved and installed on a local hard drive, and secondly, these were expensive and not accessible to small businesses.
But, now the times have changed. With technological advancement and SAAS business models. Entire bookkeeping can be done online from anywhere at any time in a cost-effective manner.
This is called cloud accounting. The best part about this is that you don’t have to worry about losing your accounts because of fire or storm. Everything is stored in the cloud and can be accessed with the right credentials and an internet connection. This is a safe and secured method for bookkeeping.
With cloud accounting in place, start-ups don’t have to break their bank anymore. Everything is done on the server and stored online; there is no need to invest in hardware. The software comes at an affordable price, making it a cost-effective option too.
Cloud accounting brings many benefits to the table, which has made it a go-to option for start-ups lately.
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How does cloud accounting work?
It is quite simple. You have to choose a reliable cloud accounting software and subscribe to it. After subscribing, upload all of your books and you are done.
Now, you can either use a web browser or its app to access your books. Most businesses connect the software to their bank accounts so that it becomes easy to track the cash inflow and outflow.
Benefits of cloud accounting
1. Saves your time
Ever heard the idiom “a stitch in time saves nine?” In this competitive world, time is of the essence. Most of the cloud-based accounting software provides you with the automation of various tasks. It reduces the amount of time that you have to spend on them.
When mundane tasks are out of your to-do list, it becomes easy for you to focus on the important works. Right from auto debiting of any payments to sending the recurring invoices, many things are automated with accounting on the go.
2. Better security
Security is the primary concern for accountants and business owners, without a doubt. When you are handling multiple clients, the most important thing you have to do is ensure that their data is safe and secured. There are chances of some system malfunction, or worse, the data could get stolen too.
When you switch to the cloud, these things are not going to matter anymore. Cloud offers great security for the data, and you can manage multiple clients simultaneously without worrying about any mess up.
The best thing about a cloud software is that you authorise someone to access the data and limit the authorisation. Lately, there has been two-factor authentication (TFA), providing an extra layer of security for your data.
3. Access from anywhere at anytime
You know, with cloud accounting, you can travel anywhere you want and work remotely at any time without worrying about managing your accounts.
Be it directors, accountants or bookkeepers; all can access the accounting software from internet browsers. Most have a mobile app too.
4. Cost-effective option
Cloud accounting is one of the cheapest and secure options that are available right now. Once you choose the software you want to go with, you have to buy its subscription package. This software offers different types of packages depending upon the size of your business.
Picking the one that matches your business requirement will help pay for the services you are using only. You will get a whole lot of features at one price with the software.
5. Collaborate easily
Cloud accountants can easily collaborate and work online from anywhere. The software makes it easy for everyone to access the ledger. Don’t worry; this is safe, and one can access your account with valid credentials only. You will be the one who controls complete authorisation.
Bookkeepers, accountants, payroll operators, accounts team, owners, investors and lenders. All can view your books online.
You can collaborate and work with your team using cloud-based accounting software. Apart from easy collaboration, this also helps in strengthening client relationships.
6. Metrics from real-time
Cloud accounting will provide you with real-time cash flow metrics, tax statements, earnings, etc. It improves transparency and also makes it easy for you to file all the details.
7. Huge flexibility
As said earlier, you can opt for the kind of package that will suit your business without any hassle. Now, what happens if your clients increase? You can upgrade to the new plan and enjoy the features that it brings along.
The flexibility that the software offers will help improve your resources to cater to your client in a better way.
No matter how many clients you get, there is no need to worry about hardware replacement, and this is another great cost-saving benefit from cloud accounting software.
8. Regular data backups
Data is very crucial, and losing it can crash the world for an accountant. This is why cloud software has ensured to backup the information regularly. You can focus on the important tasks and improve your productivity while the data will be automatically backed up to the cloud servers.
Even in critical times like earthquakes or during cyber-attacks, your data will remain safe on the server. The best thing about these backups is that the data is stored in different geographical locations for security purposes.
9. Automatic upgrades
The software updates itself with the latest version, providing additional security and the new features it offers. The automatic updates ensure that you always use an up to date software version.
10. Reduce human errors
Human beings are prone to make errors here and there, but these small errors can become costly for accountants. Cloud-based accounting software is prone to such errors. The system will check for any mistakes automatically and correct them by itself. It also eliminates any duplicate entries immediately.
11. Environment friendly
When you move to cloud accounting software, you will be eliminating the use of various hardware devices because of its ease of use. Along with it, the usage of pens, paper will also reduce as everything can be done digitally.
The carbon footprint will be less as the power consumption decreases, which will contribute a lot to the environment. There is always a chance to opt for a green data centre to store your data in cloud servers that deploy environment-friendly practices.
Check our blog on : 20 Key climate change terms important for business.
12. No installation or maintenance
Cloud software is completely hosted online and doesn’t need any infrastructure setup. This eliminates the need for installation and IT department as well. Usually, the traditional accounting systems are set up on the computer and need someone to take care of it whenever required.
Cloud software doesn’t require installation or maintenance, type the address in the search bar, and access the ledgers.
Wrap up
The world of possibilities cloud accounting opens up are helping accountants globally.
Both accountants and businesses owners can view the data in real-time and work remotely 24×7. All users have the flexibility and, at the same time, control over all of the things. So switching to cloud accounting will indeed increase their productivity and also the profits.
