Table of Contents:
A)The future is in the cloud
B) Cloud accounting: an alternative to tally accounting solutions
C) What makes a great accounting software?
D) Difference between conventional accounting and cloud accounting
E) The drawbacks of Tally
F) Tally vs cloud: Advantages of cloud accounting software
The future is in the cloud
From SOA and interactive time sharing, we have reached a time when everything is on the cloud. This amazing technology has become a force to reckon with today, in the corporate and private sector alike. The primary reason behind this is that cloud computing is way more efficient than any other business operation model. It accrues varied benefits and can be tailored according to organizational capacity. For example, in a small start-up, cloud can help in the creation of a tech infrastructure which may otherwise come expensive. For a big company, cloud can help in the provision of secure access to data irrespective of where the employees are. Every industry — from food to gaming and music – has been impacted positively with the arrival of cloud computing. Even our mobiles use this technology to store updates as per needs and requirements. This only means that you can carry your data in your pockets and get much more than just access to it. Even a sector as data heavy as tally accounting is benefited with cloud. Let us see how.
Types of cloud platforms
Cloud computing is classified based on location or the service offered. Based on location, the categories include Public, Private, Hybrid, and Community Cloud. In terms of the service, they are categorized as IaaS (Infrastructure-as-a-Service), PaaS (Platform-as-a-Service), SaaS (Software-as-a-Service), and or, Storage, Database, Information, Process, Application, Integration, Security, Management, Testing-as-a-service. Let us understand these in detail.
– In this type, the entire computing infrastructure is located on the premises of a cloud computing company offering the service.
This enables hosting all the computing infrastructure yourself and is not shared. It has the highest security and control level.
This means using both private and public clouds, depending on the purpose. While you can host the most important applications on your own servers, the secondary applications can be stored elsewhere.
This is shared between organizations that have a common goal or fit into the same scheme of things.
The services are of four types and are also known as the cloud computing stack. This is because they build on top of one another.
The most basic category of cloud computing services. It allows for renting IT infrastructure (servers or VMs) from a cloud provider on a pay-as-you-go basis.
Platform as a service (PaaS)
This is the supply of an on-demand environment for developing, testing, delivering and managing software applications. It can help in quick creation of web or mobile apps, leaving aside the worry of setting up or managing the underlying infrastructure.
Software as a service (SaaS)
This method is used to deliver software applications over the Internet, however, according to demand and on a subscription basis. It helps the users in hosting and managing the software application and underlying infrastructure. Apart from this, it helps in handling any maintenance issues such as software upgrades and security patching.
FaaS (functions as a service)
In this, developers are completely insulated from everything in the stack below their code. By reducing the hassles of virtual servers, containers, etc., they can upload narrowly functional blocks of code, and set them to be triggered by a certain event. Even a sector as data heavy as tally accounting is benefited with cloud. Let us see how.
Cloud Accounting: An Alternative to Tally Accounting Solutions
Cloud accounting is akin to traditional, on-premises, or self-install accounting software. The difference is that the accounting software is hosted on remote servers. This is similar to the SaaS (Software as a Service) business model. The data in the cloud is processed and then sent back to the user. The application functions happen off-site rather than on the user’s desktop. The software applications can be accessed remotely through the Internet or other network via a cloud application service provider. Cloud accounting software removes the hassles of installing and maintaining software on individual desktops. Apart from this, it helps employees in other departments or even branches to access the data and the same version of the software. While earlier, tally accounting solutions were in use, they have not only become redundant but also an archaic and outdated user interface. With cloud computing, on the other hand, it is now possible to get access to fluid and quick user experience. This not only helps in faster calculations but also improves productivity manifold. Business would no longer be hassled with permanent and expensive equipment and consequently save big. Cloud accounting also requires lesser maintenance. The backups and updates occur automatically without the need to download anything new.
What makes a great accounting software?
The moment someone mentions accounting, one forms a picture that is tedious and confusing. However, unlike earlier days, where companies managed humongous amounts of paperwork, ledgers, and spreadsheets, times have changed now. The arrival of accounting software has simplified a whole lot of things. By linking directly to your business or bank accounts, accounting software helps in the automation of tasks considered tedious before and also tracks them regularly. There are different types of accounting software – from basic invoice creation and expense tracking to detailed aspects such as tax preparation, financial reporting, and even management of inventory. Depending on your business needs, you can choose a software keeping in mind certain other criteria as well. It is important for the best accounting apps to offer some basic functions. This includes basic accounting and bookkeeping such as creation of invoice, tracking expenses, recording banking transactions, and generation of financial reports. The advantage is that they help in providing accurate and in-depth, not to mention easy-to-use, dashboards. Their intuitive user interface helps in the efficient completion of tasks. There are also certain accounting software which have some add-on functionalities including native customer relationship management (CRM) and eCommerce management.
Difference between conventional accounting and cloud accounting
Though both help in accounting, it is important to know some differences that exist between conventional and cloud accounting. The latter is flexible and ensures that businesses are able to access data from anywhere and at any time. All that is needed is an Internet connection, and one can break free from the worry of on-premises computers. Unlike traditional accounting software, cloud accounting automatically updates financial information and reports in real time. Not only are the account balances more accurate but the likelihood of errors that may creep in from manual entry is also reduced manifold. Cloud accounting software can also handle multi-currency and multi-company transactions better. When a business opts for on-premises solutions, with their growth, they would also incur costs on software license and maintenance. This is apart from licenses and fees for database, systems management and other software. The other expenses would be around new hardware such as servers. However, cloud accounting solutions omit all these expenses and are cost-effective in nature. Cloud solutions also require far lesser maintenance and ensure that everything including backups and updates are automated.
The drawbacks of using Tally
- Let us now look at what are the disadvantages of using tally.
- There may be a need for double entry for certain functions.
- The GUI interface may not be attractive, and the entire process can end up being very time consuming.
- The other drawbacks include inefficient customer support and the fact that tally is not an entire package for ERP solution but rather a product.
- The biggest disadvantage is that one may not be able to see two ledgers at the same time.
With the use of software, it becomes easy to perform work related tasks. While businesses spent time and resources into managing accounts, the availability of accounting software has made it easier to store large amounts of data. While a tally accounting software is beneficial in this regard, it also has certain disadvantages. For instance, it is not user friendly since it is important to have accounting knowledge to be able to use Tally accounting software.
One also does not see any graphical improvement in Tally’s older version. Despite launching newer versions recently, the GUI interface still resembles an old DOS-based accounting software. The other drawbacks are as follows.
- It is not possible to amend Journal Voucher once created.
- One cannot do batch-wise invoicing in Tally accounting software.
- It is not possible to maintain the re-order level of inventory stock in Tally ERP software.
- One of the most complex tasks in Tally ERP Software is last price inquiries
- It is also difficult to address pricing issues such as supplying different customers at multiple price lists.
- When compared to other alternative accounting software, costwise Tally is expensive.
- There is limited customization and the lack of a web-based option makes things difficult. In case, the user forgets the password, it can become difficult and time consuming to retrieve the lost data.
- Tally ERP software is not a modular application and not real time. It can only be used to record detailed accounting debits and credits.
Tally vs cloud: Advantages of cloud accounting software
While Tally is India’s most popular accounting software product, there are many advantages to using cloud accounting software over it. The basic difference lies in the ease of transacting and viewing, and this is where cloud accounting software scores heavily.
Anytime, anywhere access
Cloud solutions can be accessed from any device and any place. There are no hassles of operating systems, machines and even the updates are automatic in nature. One update addresses all the clients. Tally, on the other hand, is not web based and real time. There is also a need for periodic ‘synchronization’.
While Tally has a simple security system, there is a need for authorized access in a cloud accounting solution system. Once a user gets access, they cannot access all aspects of the software. For instance, inputting and editing of vouchers can only be done by a data entry operator. Similarly, certain personal ledgers may not be visible to users with lower access privileges.
Cloud accounting solutions have automatic back-up functions installed which happen at regular intervals. This ensures that even the disaster management plan is more robust and there is no loss of relevant data.
With cloud accounting solutions, users can gain access in real time and data can be synchronized across multiple sites. One can get a consolidated view of the company or its branches with a single click. However, Tally does not offer any real time synchronization and lacks these features.
Cloud accounting solutions provide a complete audit trail and it is possible to know who edited what and when. However, with Tally, this kind of access to real time updates is not possible.
When compared to Tally, Sales Analytics are better in cloud accounting software. There are multiple graphs and pivot tables provided to users which help in better visual understanding of a company’s sales profile.
Advanced handling of foreign currency
Cloud accounting solutions help in advanced understanding and handling of foreign currency. Tally does not have any such concept – neither of reporting currency nor ledger currency. However, with cloud accounting software, it is possible to see the accounts in any currency based on automatic conversion.
Balance sheets and other templates
There are user-defined templates in a cloud accounting software, and this is for both balance sheets, invoices and P&L statements. This is one of the biggest plus points and accrues advantages for auditors. This is because they are saved the bother of doing excel manipulations for preparing the final reports. Tally, however, does not have these features.
Perhaps the best feature of a cloud accounting software is that it is mobile friendly. Once the user’s mobile is registered, it becomes possible to view various reports and also drill down till the voucher level. Vendors and clients can review statements of accounts, access invoices, and perform other tasks as well. The best aspect is the self-serve option which offers flexibility like no other and keeps all stakeholders on the same page.
It is possible to integrate cloud accounting software with other third-party software seamlessly. However, given that Tally has its own proprietary database and a restricted xml export feature, this is not possible.
Friendly and interactive UI
As mentioned, earlier, Tally is not user friendly. There will be a need to remember keys. Cloud accounting on the other hand is extremely interactive and color coded. Although available, there is also no need for shortcut keys and even the navigation options are much better. One can view spreadsheets simultaneously and users can jump from one view to another very easily.
Cloud accounting software enables in processing multiple transactions easily. However, Tally does not usually enable going beyond 50,000 transactions.
Prints and reports
With cloud accounting software, users can get multiple formats for ledger print including tabular excel formats . The reports are also formatted in a better manner with an extensive reporting modules and advanced filtering functions when compared to Tally.
Push Reporting / Web Services
Cloud accounting software can be programmed to email reports at intervals set by the user. It allows for different reports to be sent to multiple users. One can also generate reports alternatively – on a weekly or monthly basis. These can be stored on the user’s common drive. There is controlled access and reports are made available as per demand.
With cloud accounting software, it is possible to track every change that is made to voucher / ledger opening balances. It also allows auditors to lock vouchers/mark vouchers that need clarification. In case there are changes made after audit, reports can be generated listing these changes out.
While Tally is used even to this day by accountants across India, cloud accounting software allows for many features that may not be present in it. Cloud accounting software is highly suitable for both small and medium sized businesses and eliminates the need for dedicated accounting professionals. It is also a great choice for businesses where the entrepreneurs themselves want to manage accounting information and need easy access to them anywhere, anytime.
Tally on the other hand is a dated accounting software, which is made as per old Indian regulations and business practices. While it can handle the accounting information of any small to large sized businesses in India, it would also need to partner with the right talent in the business. Tally is the staple of Indian accounting ecosystem but with the arrival of cloud accounting solutions and software, things are changing.