If you want your business to work smarter and faster, cloud accounting software is a wise investment. Working in the cloud will give you a better overview of your finances, and improve collaboration with your team.
Someone rightly quoted – “Your Business is your Baby”. You need to take care of it similar to how you nurture your kid. As an entrepreneur you need focus, dedication, passion to achieve your dreams, and the understanding of latest tech developments and how they are shaping up the biz world.
Having said that, one domain/industry that saw a tremendous shift over the years is the accounting and bookkeeping space. Considerable improvements with the emergence of various cloud-based accounting software have completely revolutionized the way businesses perceive accounting.
But, despite the cultural shift, a good amount of business owners are still skeptical of the benefits of cloud-based accounting and still rely on traditional computing.
So, in this blog post, we will take you through various benefits of cloud accounting software, but before listing down the merits, let us first understand other nuances of cloud accounting.
To find out more, keep scrolling!
What is Cloud Accounting Software?
In layman’s terms, the cloud is a generic term that defines data that resides on different servers all of which are connected via the internet giving you access to the same data from any internet-enabled device.
Similarly, cloud accounting refers to the storage of data on remote servers further allowing the users to interact with the financial data, perform online transactions, and save it back within the software instantly in real-time.
One of the significant benefits of cloud-based accounting software is that you can access the data from anywhere, any device, without physical location posing a hindrance. You simply need your login credentials to get access to the online software or Sign Up in case you’re registering as a new user. You don’t have to worry about hardware maintenance, installation, licensing, or running an outdated version as the online accounting software is always up-to-date and accessible.
Most businesses are switching over to online cloud accounting software since they make business operations and financial information management easier. If you haven’t yet switched over to accounting software on cloud, then you might want to look at the accounting software features –
Speed – All your normal daily operations can be completed at lightning speed. The automation can bring in a welcome change in your functioning and help your employees get more work done and process more data. No more wasting time posting or chasing invoices. With the accounting cloud based software, you can generate automatic invoices. It can also help you to keep track of all your debtors and provide timely reminders to make payments. The software can also help avoid any unnecessary duplications as well as other human errors. Since they are regularly updated automatically, you can expect fast and accurate financial operations without any intervention.
Security – One of the common concerns for CFOs and other financial personnel can be the security of software. Vulnerable software can not only result in loss of data but also lead to leak of confidential information. Using backup systems doesn’t help much since they end up creating duplicate versions of files, plus storage costs can be quite cumbersome. With cloud accounting software, the data can be backed up and stored on an offline server. This can immune businesses to losses from virus, theft, or accidents and still help you retain your data. Moreover you can choose who gets access to what section thereby resulting in a peace of mind
Centralised access – Cloud-based accounting helps in centralised access to all data as well as offers collaborative opportunities. This reduces clutter since different departments and employees can work on a single file without creating multiple versions of it. It also makes user access and login permissions easy so that everyone can access the file without difficulties. It’s also possible to access the data from anywhere and on any device.
Scalability – One of the best advantages of cloud-based accounting software is that they can be customised to meet the needs of small as well as large businesses. Because of this scalability, you can easily expand the functions of the software to meet the needs of your growing business. It can be adapted to include all the necessary integrations and features you may need along the way. Expecting a huge load of transactions next month? Simply upgrade your plan for that period and switch back easily once done.
Updated data – One of the benefits of cloud accounting software that must be highlighted are automatically updated data that can reflect in the business balance sheets in real time. There are also several regularly updated reports that can give you an overview of your finances. It also helps you make better financial decisions.
Accuracy – Since most of the functions are automated, human errors are reduced to a great extent. This increases the efficiency and accuracy of your business operations. For example, working repeatedly on the same invoices can create human errors sometimes which automated accounting can omit.
Efficiency – Online cloud accounting software can also help you streamline your finance processes and boost the overall efficiency of your employees. It can also help increase productivity and help employees make the best use of their time and schedules.
Integrations – Cloud accounting software can also be integrated with other apps and tools such as CRMs and payroll software. This can help you expand your operations and cover all aspects with just one software.
Savings – Saving money is a crucial aspect of accounting software features and benefits. Firms that rely on cloud-based software for their accounting tasks don’t have to invest in new infrastructure and servers to store data. Besides, they also don’t need much IT staff to maintain or update their accounting system. For on-premise accounting systems, it’s exactly opposite. As the business grows, firms have to spend more on software licenses, maintenance costs, buying new infrastructure and assigning more staff to manage the infrastructure.
Issues with Offline Traditional Accounting Software
- Neither the software nor the data is up-to-date.
- The software works only on one computer and data frisks from one place to another, like on a USB drive. This is not reliable or secure.
- User access is only for one person. Other important persons cannot access details of customers or finances.
- It is complicated and costly to maintain back-ups of information.
- It is time-consuming, difficult and expensive to upgrade software.
- Customer support is slow and expensive.
Financial Data Loss: How can cloud-based accounting software prevent it?
There are many reasons that could compromise your financial data. Here are some of them.
Computers are vulnerable to attacks: New viruses are created every day, and computers are vulnerable to it. Sometimes, removing these viruses can be so difficult that you will have to wipe out your entire hard disk to get rid of them.
Having weak or no access control: If you don’t have strong access control to your financial data, anyone can gain control of the data or may even accidentally delete it. Moreover, you wouldn’t be able to trace if someone stole or copied confidential data from your system. But with a cloud-based accounting system, you don’t have to worry about that as nothing is stored locally on your system. You can use your credentials to get access to your data from using any computer.
Not backing up your data: Needless to say, backing up data regularly is the most important part of protecting your data. Moreover, you also need to protect and organise the backed-up data so that you can restore them when it’s needed.
Unanticipated incidents: Businesses lose huge sums of money due to unfortunate events like natural disasters or power outages on a massive scale. In such times, you may not get a chance to protect your system or the data saved in it. Thus, your financial data is better protected when in the cloud.
What is cloud accounting software’s role in securing your data?
One of the major benefits of accounting software based on the cloud is to offer high-level security for your financial information. Although the traditional accounting software can do a good job in offering security to some extent, the methods that cloud-based accounting software use are more secure and ensure there’s no data breach whatsoever. Cloud accounting software also ensures that no traces of financial data are left when different computers are used to access the application. All the data that is stored in the cloud is secured and encrypted.
Another important benefit of implementing accounting software based on the cloud is that sharing data becomes easier and less distressing. Unlike traditional methods where data transfer is done through flash drives, with a cloud accounting software, you can just allow access rights to the data with unique passwords. This will ensure that the data is viewed only by those who have been granted access to it and is protected against being stolen or lost.
Accounting software Features and Benefits
You can make use of cloud-based accounting platform from any device using an internet connection. Online accounting enables business owners linked to their accountants and financial data. The software can integrate with a complete system of add-ons. It is easy to use, cost-effective, and scalable.
In case of cloud based accounting, there is no need to install and run applications over a desktop computer. In its place, you only have to pay a monthly subscription for the online software.
Here are some benefits of accounting software:
1) Unified and Simplified
Because accounting information is stored in the cloud, it can be accessed or updated from anywhere. Team members can collaborate with each other, even when based on various physical locations.
This is especially useful when a business owner wants to check the financial health of his business while their accountant wants to generate an invoice or reconcile a bank statement, all at the same time.
You will have only a single data file. In traditional accounting software, there was a need for multiple data files but in case of cloud based accounting, there is a centralised database.
Cloud-based software is growing in popularity because it’s accessed through the internet, and you don’t have to be bound to your office desk. When you use cloud-based accounting software, you will be able to check on your company’s financial data either from home or office, through your tablet or smartphone. This is one of the main benefits of accounting software that are cloud-based.
2) Secure and easy sharing
Cloud software enables the sharing of data with all stakeholders from your accountant to your bank manager. No more do you need to send separate e-mails or exchange USB sticks to transmit data in an easy and safe manner.
3) Automatic back-up
Never will you have to create back-ups for files containing crucial data. This was a need in the past when very often backed-up data was prone to get lost due to poor management.
4) Works both offline and online
One can enjoy the advantages of centralized data in an online mode. Better still, you can even work with data in offline mode as your data will sync automatically the next time you link to the internet. This is a great bonus when and if you are faced with internet outage.
5) GST compliance made easy
If you manage a small business, then you would want to make the filing process of your GST process as easy as possible. To do this, you have to consider making use of GST-enabled accounting software, as it will automatically apply the appropriate GST to your invoices and allow you to extract important financial documents, quickly, so that you’re always ready to file your returns.
Your cloud accounting software can also be used as a reminder so that you can remember to file your tax returns on time. You have to set up the time and annual dates for your returns.
6) Automation will help you save time
Most cloud-based accounting software will connect your business bank accounts and sync them with your portable devices, and this will help you monitor and track your sales, inventory, and costs. All you have to do is ensure that most of your data is up to date, consistently; this way, you are assured that you’re viewing real-time data.
7) Easy collaboration
You can make use of web-based accounting software if you don’t like compiling financial reports for your accountant. This is because all your financial information is hosted on the cloud, with the help of the accounting software, and it can be accessed from any location that has a good internet connection. You can also set up easy access for your accountants; this will allow them to log into the software as required. You can control employee access, as well; this means that the company can grant employee access to information regarding payroll without providing them access to your official bank accounts.
8) Cloud-based accounting software improves accuracy
Once you have your financial information in one place, and you have consistently entered the necessary data in the system, then you will reduce any risk of accounting errors that will cost you a lot of money. Cloud-based accounting software is usually easy to use, and it lets you enter the income and expenses as needed; it will also allow you to put your transactions into various categories. This will help you track and review your expenses and ensure that your financial information is right. Instead of an Excel sheet, you can make use of accounting software, this way, you won’t need to know various formulas, shortcuts, or accounting practices. You will have to enter the correct expense and income information, consistently, and you will receive accurate reports.
9) Doesn’t need installation
Cloud-based software is programmed online, which means that you don’t have to purchase or install a program directly into your computer. In the past, accounting programs have to be installed on all systems within the accounting department. Now, you can access cloud-based software by simply logging in with the required information, into the address bar, and logging into the account.
Since you aren’t using any software that’s installed in the office server, you won’t really need a dedicated IT team to update the software.
10) Tech support is available
One of the many advantages of an accounting information system is the amount of technical support available to the clients. You will be provided with various ways to contact the tech support department of the cloud software company, and this will include chat, phone, and forum support. If you hate the idea of bookkeeping and dwelling into paperwork raises your stress levels, then you should look at switching to a cloud accounting software because it will make your job much easier.
The right tool can supercharge the conventional benefits of business accounting. With cloud-based accounting software, your finances will be continually up-to-date, your data will always reflect the current real-time information, and
Does your business use a cloud-based accounting solution? Let us know in the comments below.