What is cloud accounting? Well, simply put, it is accounting software that is hosted over remote servers and can be accessed through the Internet or another network. You probably already use cloud technology for your phone, computer and tablet for everyday accessibility and sharing.
Cloud accounting software is similar to traditional software, except that the data can now be access anywhere, at any time and on any device. It is technology that benefits customers, small businesses and accountants.
Here are five ways that cloud accounting helps everyone:
Everything today is done on the go, so why isn’t accounting? With cloud accounting, it can be. Traditional accounting software is tied down to a single or a few physical computers. To access data using that software one had to go to the data – now the data can come with you instead. Expenses can be inputted on the go, which benefits everyone. For businesses, it means that financial data is updated as soon as something happens, which in turn makes it easier for accountants to provide their clients with the best and most accurate service possible. As for customers, cloud accounting benefits them as they can receive invoices, bills and receipts directly and immediately from businesses.
Cloud accounting also means that sharing information is easier than ever. No longer is transferring data onto a flash drive and physically carrying it to the next person necessary. Now it is as easy as signing in. This means that every person who needs access to the data can – whether that is multiple people at the business, investors or even your accountant. Businesses can share information with their accountant across the country or even with another store, branch or office around the globe. Cloud accounting also allows businesses to control what information invited users have access to.
2. Real Time
With traditional accounting, inputting data can take an exorbitant amount of time. Accounting becomes an unwelcome chore that sucks all the fun and energy out of running a business. No longer are you or your accountant required to dig through a shoebox full of receipts, manually recording each one. Now businesses have the ability to update their accounting in real time. This means that accountants can now provide insight and advice based on real time information as well.
Another drag of old accounting software was the lengthy and expensive updates. With cloud accounting updates happen automatically and quickly, with no cost. There’s no lull as you wait for the new software to be installed or the new equipment to be delivered. Now updates happen as quickly as any other application, and are usually done in the background without affecting the user experience and without requiring any intervention from the user at all.
Waiting to input financial data or doing it manually often results in human error. We are only human – we forget, our minds stray, and after a couple of hours the numbers start to blur. Human error can often have detrimental and costly consequences though. It also makes it difficult for your accountant to do their job correctly. With cloud accounting that is no longer an issue. Because data is entered immediately and the updates are real time, the chances of accidentally typing a 3 instead of an 8, or missing the critical extra 0, or comma, is significantly reduced.
Security is usually a top concern when it comes to switching over or starting to use cloud accounting. The good news is that this software is just as safe, if not more so, than traditional accounting software. Sharing the data via the cloud is safer than manually transporting the data through a physical flash drive that could potentially be stolen or lost. With cloud accounting, everything is protected with verified and encrypted passwords making it extremely hard for the data to be hacked or stolen.
The lack of storage on a physical computer or drive also adds to the increased security of cloud accounting. Unlike data on a physical computer it cannot be stolen, damaged or lost. This also means that there is no trace data left on any device that can be accessed by unauthorized personnel. There is also the added benefit that most cloud services have back up servers meaning your data is always accessible and always safe.
When it comes to money and cost benefits, cloud accounting definitely provides added benefits to businesses. Traditional accounting software requires costly updates and businesses often can become tied down to purchasing equipment and contracts that bind them long term. With cloud accounting, money is easier to keep track of and easier to save. It can be used on any machine and updates are free. There are also no extra fees for storing backups as this all happens remotely in the cloud by default. Not to mention, with less time spent on keeping the books in order, there is more time for businesses to focus on their operations and growth.
It is best to think of traditional accounting software as the landline of telephones – stationary, outdated, and difficult to share information safely on. Cloud accounting, by comparison, is the smartphone version of bookkeeping software – mobile, diverse and ever growing in terms of possibilities. There are countless benefits when it comes to switching or adopting cloud technology. Whether you are a business, customer or an accountant. It is the way of the future – so do not get stuck in the past.