The emergence of new technology is having its impact on every industry, and its effect can also be felt in the accounting industry.
Age-old methods of maintaining tax reports and accounting data do not fit well into the contemporary world of accounting businesses.
Plus, the expectations of clients from the accountants or CPA firms they have hired have increased manifolds. They want technologically advanced solutions for their accounting needs, while also getting rid of the restrictions of the traditional methods.
A majority of the accountants say that they are not future-ready. To beat the competition in the accounting industry, they need to pace up and run in line with the wave of digitalization.
To help them out, there is cloud technology with its unique advantages. This technology can also be considered a reason behind the successful evolution of the accounting industry.
A lot of accounting firms and CPAs are making the required transition to the cloud to profit from its benefits. Furthermore, it also helps them face several work-related challenges.
Let’s dig deeper to find out more about the prime challenges faced by accountants and how the cloud technology helps to tackle them –
1. Inability to Access Accounting Software and Data Remotely
A common, highly accepted fact of the modern world is that ‘time is money.’ Surprisingly, it fits best into the scene of the accounting industry.
CPAs and accounting firms do the hard work of managing their client’s accounting data. They are not limited to work just in the office.
Time is highly valuable for them now than ever before, and they have to invest their time wisely while working for their clients.
One common challenge that the accountants face is the inability to access accounting software or its data remotely.
In most of the cases, the accounting software like QuickBooks, Sage, etc. are hosted on the local office computers. To access them, CPAs need to be present in the office. Otherwise, they can’t work on urgent tasks that may come up in time other than the working hours.
Cloud technology helps the accountants deal with this challenge.
They can get their accounting software and data hosted on the cloud to be able to access it from anywhere and at any time of the day or night.
It means that all they need to work for their clients remotely is an Internet connection, a mobile device, and authorized access to the cloud environment where their software has been hosted.
By choosing a reliable cloud hosting provider, CPAs can get to work more for their clients as they are not bound to be in the office premises to do their work.
2. Complexities in Handling Client’s Accounting Data
As a part of their work life, CPAs have to deal with a significant amount of client’s accounting data. As per their accounting expertise, they need to work on it, filter out the required data, and use it to file taxes, manage reports, etc.
Then, they also need to involve their team of accountants, share that data, and work together.
It often happens that an accounting data file needs to be edited multiple times before being used finally. It is done as per client-specific requirements.
But it creates a lot of complications at the CPAs’ end.
They need to deal with multiple files of the same data, save them locally, and even share them to the fellow accountants. Ultimately, these files take up a good amount of storage space in several local computers and are of no use later in time.
Also, doing the redundant tasks of saving and sharing the same file takes a lot of time.
By getting the accounting data saved on the cloud, it becomes accessible to the authorized users for viewing or editing purposes.
Once edited by a user, the data gets updated on the cloud in real time so that all other users can see the updates in one file only. This way, they do not need to make multiple copies of the same file and save it in different local computers.
Plus, it also makes team collaboration easier as multiple users can work on the same data files saved on the cloud simultaneously.
3. Risk of Loss of Confidential Data
Most of the accounting data that CPAs work on is confidential. Their clients also want them to keep the data safe and secure.
Loss of client’s financial data can cause big blunder for the accountants and CPA firms. Just keeping it saved in the computers systems installed in the offices is not enough as there is a risk of cyber-attacks, unauthorized system access, hardware theft, among others.
In some cases, it is not even possible to recover the lost data ever.
Even the possibility of the occurrence of such a situation can cause damage to the reputation of accountants and CPA firms.
By migrating the accounting data to the cloud, the accountants can minimize the risk of losing valuable data to a well-off extent.
A trustworthy cloud service provider implements several security measures, including firewalls, data encryption, intrusion detection, and similar others. It all ensures that the accounting data stays safe and secure in all possible situations.
4. Downtime That Affects Business Continuity
In general, an accountant or a team of CPAs in an accounting firm work on local computer systems that have the required software installed in them.
Because of technical errors and system malfunction, downtime can occur during the work hours. No one can predict anything about how long it is going to continue.
The worst part about facing a downtime at work is that the team loses its efficiency and does not turn out to be maximally productive as in other times.
Ultimately, longer downtime can result in business discontinuity, which simply means loss of money in a number of ways.
One way to minimize downtime at work is to choose one of the renowned cloud hosting providers. They are known for the uptime guarantee they offer, which can be as high as 99.999%.
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Even in case of disruptive events like earthquakes, flood, etc., they are well-prepared to offer disaster recovery and business continuity plans to all their clients.
5. Higher Operational Expenses
This is particularly related to small accounting firms who have recently started their operations to cater to the clients.
From the very start, they need to invest in advanced IT infrastructure, including in-house servers, computer systems, software, etc. Alongside, they also need to hire a few IT professionals to take care of the installed infrastructure.
In some cases, it becomes a challenge for the CPA firms to pay for the not-so-budget-friendly operational expenses. Lack of required budget generally has its impact on the work done.
One of the main reasons that make cloud technology highly popular amongst CPA firms is its budget-friendliness.
Depending on their business needs, they can choose the cloud specifications and pay for it accordingly. Since the IT infrastructure is managed and maintained at the service provider’s end, there is no need to hire IT support professionals in-house in most of the cases.
As detailed above, cloud technology is highly advantageous for CPAs and accounting firms in several different ways.
Remote data accessibility, maximum uptime, and lower operational expenses are something every accountant wants to work with. Thus, making the right choice of a cloud hosting provider can play a vital role in growing your accounting business to the next level.
If you want to know more about how you can migrate your data to the cloud, call our experts now at 855-910-6927.
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