Last updated on July 18th, 2022
You might have been hearing the word “cloud” a lot recently and in a lot of different contexts. “Cloud accounting” is now a buzzword too. Have you been curious about what it is, and does your business need it? You’ve come to the right place to figure this out.
Most businesses are rapidly moving towards cloud technology, and the accounting industry is leading this paradigm shift. Shifting to the cloud has huge benefits not only for CPA firms but also for small and medium business (SMB) owners. But let’s first clear up what exactly is “the cloud.”
To explain it simply, “the cloud” refers to servers and computing functions that are accessed through the internet. When something is said to be “in the cloud,” it is stored on the internet instead of your computer’s local hard drive. So when you use any application or storage service on the internet, you are, in fact, using cloud services. Now we can address the main question –
What is cloud accounting?
With cloud accounting, you access your accounting software via the internet instead of storing it on your computer’s hard drive. You do not have to install any software or application on your computer to run the program of your choice. From pen-and-paper ledgers, accounting software on the cloud is a significant step forward in the evolution of the accounting process.
While cloud computing has spread its influence over countless areas, accounting is one field that is ideally suited for unison with cloud technology. Cloud technology brings the required seamlessness to this highly data-driven and regulated work. Its advantages are proven by the rapid growth of the cloud accounting market in recent years.
How does Cloud Accounting help your business grow?
The challenges that businesses face with traditional accounting are several.
- Inability to access accounting data round the clock — irrespective of presence in the office — results in a lack of efficiency. Urgent tasks are often delayed.
- Conventional accounting software is expensive. The cost of keeping it up-to-date and backed up is an extra operating expense. For small businesses, these costs can be monumental.
- There is no escape from human error when large volumes of data need to be handled manually. Manual data processing takes up a large portion of time and opens room for mistakes.
- Financial data is highly confidential. Security is the paramount concern for all accountants. Unfortunately, most traditional accounting software are ill-equipped to handle new-age cybersecurity threats.
- Disruptions in business continuity can spell disaster and financial loss. Technical malfunctions or natural disasters can lead to downtime with long-term consequences.
These are challenges with which accountants and small business owners are intimately familiar. Cloud Accounting addresses all these issues, provides guaranteed solutions, and has several added advantages.
1. Increase efficiency by accessing data anytime, from any location:
Business owners often work on-the–go, from their mobile devices. Cloud accounting enables remote access to their financial data. They can see all the pertinent account information anytime, as long as they have an active internet connection.
CPAs can coordinate with their team from any location. This flexibility increases efficiency, as urgent tasks are no longer delayed.
2. Lower cost of ownership:
Unlike traditional accounting software, cloud accounting requires no software installation or maintenance. Updates are automatic and often a part of the package with no added charges. Data backups happen on the cloud as well. All these added features lower the operational costs involved in accounting. Most cloud accounting software are available at a predictable subscription price. Vendors like Ace Cloud Hosting customize their prices according to business requirements.
3. Automation of manual data processing:
Cloud accounting software automatically integrates all your transactions with other accounting data. This software matches the bank statements with invoices and ledgers. All these processes are traditionally handled via a painstaking and time-consuming method. It frees up your team’s time and reduces the probability of human error.
4. Increased real-time collaboration and updates:
All data is viewable and accessible to all authorized users. They can work on it simultaneously and get updates in real-time. It is perfect for coordination and collaboration in your team. User permissions can easily be managed to ensure only critical personnel access data.
5. Improved business continuity:
Accounting data is critical and expansive. Its loss can mean long-term financial consequences. Cloud accounting software stores your data on a remote server, with backups in several other locations. It offers an invaluable security blanket. Business disruptions due to technical errors or natural disasters do not pose a threat to your data security.
Is Cloud Accounting Secure?
Yes, it is. Cloud accounting is more secure than on-premises accounting. If your mobile device is ever stolen or lost, no one can access your critical data. Because the data isn’t stored in the device. It is stored on a remote server and accessed via the internet requiring an authorized login to the online account.
Most cloud providers use advanced antivirus to mitigate cyber threats, multi-factor authentication, and encryption to ensure that data security is never compromised. Sharing data is also much more secure, with unique passwords. There is no chance of unauthorized access to the data as long as the passwords are protected.
Lastly, cloud providers have the data backed up in multiple secure servers. So calamities such as fires or natural disasters do not reach your critical financial data. Information kept on-premises can be damaged beyond recovery.
Cloud Accounting – A Competitive Advantage
Staying up to date with emerging technologies is a necessity. The competitive advantage of this new technology has the potential to take your business to new heights. It is easily scalable, remotely accessible, low maintenance and lowers cost. It has all the features you need to make your business more efficient, productive and automated. Cloud accounting is the future of accounting, and we need to be a part of it.
Want to move your accounting practice to the cloud? Chat with our Solutions Consultants for no-obligation 10-day free trial today.
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