Update: This article was last updated on 6th July 2020 to reflect the accuracy and up-to-date information on the page.
Startups are slowly becoming an essential aspect of the nation’s economy. However, 75 percent of startups tend to fail during their early years.
The reasons for this could be manifold. Hence, every startup needs to make its move wisely. Especially due to the competitive nature of the market, startup companies should constantly be looking for ways to get an edge over others.
However, to achieve the same, startups need a solution to cut down costs and streamline their business.
The startups using the on-premise setup for their business find themselves in an endless loop of hardware maintenance and replacement. They have to deploy an IT team to look after their issues, increasing the operational costs. The limitations of on-premise setup degrade the performance and make it hard for startups to sustain growth.
In order to manage a business, startup owners understand that their financial information should be safe and readily available as requests can pop up anytime. This can be achieved with the help of cloud computing.
Cloud helps in running a firm in an organized manner and makes tasks simpler, unlike manual accounting. Instead of creating responses with quick number crunching on paper, cloud accounting lets users have instant access to the accounting data in various formats.
This infographic has ways early-stage startups can manage their finance and accounting while keeping their processes on track with cloud accounting:
Let’s explore in detail.
Table of Contents
1) Remote Access
The best part about cloud accounting is that it lets you access the accounting process remotely through the internet (unlike the on-premise setup, where you have to go to the office to access the data).
This is best for freelance accountants, remote employees, or employees who are on a business trip. They can access the accounting data and applications from portable devices such as smartphones, tablets, and laptops.
2) World-Class Security
Cloud brings the top-class security features that guarantee that unauthorized users do not compromise the highly critical financial data. To ensure the same, cloud service providers deploy security safeguards like data encryption and multi-factor authentication.
In addition, the Business Continuity and Disaster Recovery process adds an extra layer of security for your financial data by identifying threats and backing up your data constantly on redundant servers located in separate locations.
3) Time and Cost Saving
Moving the accounting process from on-premise to the cloud leads to considerable time and cost savings for startups. As opting for cloud services, the startups no longer have to purchase high-end hardware for their offices, which can reduce the capital expenses.
Moreover, as the cloud service providers take care of all the issues related to the hardware and infrastructure, the startups do not need to deploy an IT team in their office premises. This eliminates the IT-related hassles saving them time and operational costs.
4) Automatic Updates and Software Upgrades
Cloud accounting facilitates automatic updates to your accounting files and software so that you do not have to spend extra resources. You can utilize the same for other critical tasks leading to improved time as well as resource management.
All the updates are accomplished in the background so that you can continue with your tasks without interruption.
5) Multi-User Collaboration
Another aspect of cloud-hosted accounting software is that multiple users can share and view files on the same cloud platform. All they have to do is log in the cloud and get access to the accounting data. They can simultaneously add data and make changes in the file.
Collaboration is possible without cloud computing solutions, but it is never that easy, effective, and secure.
6) Better Business Decisions
It is imperative for every startup to make the right business decisions to achieve great heights. With cloud accounting, you can make better business decisions as it enables advanced analytics of the financial data.
Moreover, since the data can be accessed in real-time, you can keep track of the data and make business decisions on the spot, regardless of location.
Want to know more about the benefits of hosting your accounting process on the cloud? Connect with our Solutions Consultant.
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Lawrence5 years ago
Rightly said, cash shortage is a major concern in new startups, and cloud-based accounting can save big.
E-filing and e-payments have encouraged paperless accounting, hence saving the environment too.
Gayle5 years ago
Today’s startups are also open to new technological changes such as “Automation”. This has drastically impacted the accounting and made it more beneficial for startups. There will be a time soon when startups will remove the need for hiring accountants and will move to complete automation environment for their accounting needs.
Camille5 years ago
Totally agreeing with you Gayle! Cloud has rise-up the performance level of startups and with AI, accounting operations are more result-driven.
Mike5 years ago
Thanks for penning down the benefits of cloud accounting for startups. With real-time access, a startup can be more involved in their business and helps in better management decisions promoting more profits and cutting down the cost.