Last updated on July 18th, 2022
Since the dawn of organized business, keeping records of transactions and generating reports of profit and loss has been an integral part of every business practice. Due to its importance, accounting has always gone hand in hand with the latest technology.
From paper bookkeeping to electronic spreadsheets, accounting has witnessed it all. Now cloud computing is the next frontier in modern accounting.
In simple terms, cloud computing means that your end-point device is connected via the Internet to a high-capacity state of the art computing infrastructure where all your work and information get saved in real-time.
Using accounting software hosted on the cloud means that you can log in from any device connected to the Internet and work on your financial accounts. This new model means more flexibility, reliability, and higher revenue. As reported in this Xero survey, “Companies that use 100 percent cloud-based accounting saw a 15 percent year-over-year revenue growth.”
If you are still using accounting software on your local systems, then it is time to host your software on the cloud because of the following advantages it offers –
Why Cloud Accounting Is Better Than Desktop Accounting
1. Work from Anywhere
The most significant advantage of hosting your accounting software on the cloud is that you can access your financial data from anywhere at any time. You can log in to your account from desktop, laptop, or a smartphone and get access to your important accounting files.
Using desktop accounting software, you are confined to your office space to use your accounting software.
Nowadays, when working from home is a prevailing trend in the corporate culture, your employees will be able to access the accounting software, whether they are working from home or the client site.
Also, if your business requires traveling a lot to various client locations, then moving your accounting software to the cloud will be crucial for you, as only a working internet connection is needed to login to the software.
2. Minimize Costs
Running your accounting software on the local systems involves significant capital and operational expenses. Firstly, the cost of purchasing the expensive servers or local systems required for installing the accounting software is quite substantial.
Secondly, costs like cooling, power requirements, and considerable office space to host the hardware adds to the capital expenses. Once you have set up the infrastructure, there are operational costs like maintenance and upgrade that regularly take a huge chunk out of your pocket.
However, if you decide to host your accounting software on the cloud, both capital and operational costs are minimized. The software is hosted on the cloud environment of the provider, and you need only the end-point portable devices like smartphones and tablets to access it.
Moreover, the cloud provider also takes care of the hardware upgrade and maintenance, along with all the IT issues that hamper the accounting process. Hence, there is no need for an on-premise dedicated IT team.
3. Easy Install and Update Process
Desktop accounting software requires capable computers with an extensive list of hardware requirements. The installation process can also turn out to be tiresome depending on different computer architectures your business uses. Moreover, the desktop software updates are seldom and during which you will not be able to use the software.
The requirements needed to access your hosted accounting software is just your web browser or RDP shortcut, that’s it. You can open a new tab on your browser and start using the software. There is no need to have a top-notch computer system; just any desktop, laptop, or mobile device with a modest specification will work fine.
The software updates get completed on the backend server-side, and most of the time, you will not even notice the update until a new functionality appears on your screen.
4. Automatic and Regular Backups
You can never predict when a mishap would occur that could sweep your entire financial accounts clean and leave you in disbelief. Most of the time, we get occupied with our work that it slips out of mind to take the backup of the critical accounting data, and we remember about it only when a disaster occurs.
Even if you have a dedicated IT team that handles the data backup, do they store the data on a different hard drive at your office or a secure offsite location? Having data backed up at a secure offsite location is crucial as when a natural disaster occurs at your office location, then it will destroy both your desktop and your data backup drives.
The word ‘Cloud’ has become a synonym of ‘data security’ as it exercises an almost infallible security regime. The prominent cloud providers offer data backup on multiple locations so that your data is secure even in the case of a disaster.
The backup process of your accounting data hosted on the cloud is automatic, frequent, and very reliable. It is not that they are foolproof, but at least they are far better than the Do-It-Yourself approach of backing up data when using desktop accounting software.
5. Better Help and Support
If you use any desktop software, you might have often got stranded when an error occurs, and your work may halt until the next release of the software. Even if there is support available, it is quite possible that your issue might not get resolved because the IT team will not be able to access your machine and find the root cause.
It often occurs that your issue cannot get fixed because you didn’t update your software, or you did not take a backup, or there is a problem with your hardware.
The competent cloud hosting providers are known for their support services and issue resolution time. For most of the cloud accounting software, support is just a click away through chat, phone, or email. Also, as the software is least dependent on your machine, there are minimum hardware issues.
If your business is located globally, then it is quite difficult for your employees at different branches to work in collaboration when they are using desktop accounting software. You would need to install high capacity servers to connect all the remote desktop computers; otherwise, the financial reports from one desktop will first be exported and then transferred via mail or USB drives.
These methods are not only cumbersome but pose a severe security threat to your financial data, as viruses and other malicious scripts might creep into your network.
Hosting accounting software on the cloud makes it easy for your employees to collaborate and work simultaneously as each one can log in and work on the same files simultaneously. The updates done on a record by one user gets reflected on all other users in real-time.
In a Nutshell
Hosting accounting software on the cloud of a service provider lets you focus entirely on the accounting work keeping all other worries at bay. You will not be bothered again by software updates, installation issues, data losses, etc.
Advantages like anywhere access, collaboration between employees, and real-time updating of information will give your business a sure shot boost in productivity and efficiency it truly deserves.
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