Cloud accounting refers to the use of an accounting system that is remotely hosted online. This revolutionary type of accounting is executed using software that is accessed through the internet rather than one that is hosted locally on a computer’s hard drive. In cloud accounting, financial data is sent into “the cloud,” where it’s processed and returned to the user. Cloud accounting is one of the best things that have happened to the accounting industry in recent years. So, how can small businesses benefit from cloud accounting?
1. Allows for seamless transactions The beauty of cloud accounting is that it eliminates the hassles associated with maintaining an offline accounting system. Users do not have to get rid of the old system in order to upgrade to the new accounting system. Cloud accounting is based on SaaS delivery model, which seamlessly integrates into business operations allowing for a smooth transition to the cloud. This allows small and medium-sized businesses to shift into a pre-configured system immediately rather than waiting for too long to have an in-house accounting system configured.
2. Multi-user collaboration Cloud accounting allows multiple users to access, edit and share the same data in real-time, from anywhere at anytime. This means that different users can work together on projects to save time, improve quality, increase productivity and allow for better monitoring. Most cloud accounting software offer customizable permissions for users for security purposes (as known as separation of duties).
3. Seamless integration Cloud accounting software can integrate with other cloud-based solutions and hundreds of applications like Shopify, Gusto, PayPal, Stripe, etc. This brings along endless possibilities and extends the functionality of cloud accounting. This not only helps to improve the efficiency of cloud accounting technology, but it also creates greater value for small and medium-sized businesses.
4. Access real-time information With cloud accounting, users can access financial data and information in real-time to allow for efficient and real-time reporting and quicker decision making. Users can access financial statements, outstanding invoices, account balances, and the current financial position 24/7. This is important especially for businesses that handle large amounts of data. Cloud accounting supports advanced data processing capabilities, meaning it’s easier for businesses that deal with large and complex data to perform quick analysis.
5. Better security and reliability Cloud accounting provides better security and reliability as compared to in-house servers. If you run your accounting software from in-house servers, there are higher chances of losing crucial data if you don’t maintain your system on a regular basis. The investment to secure an in-house server is significant. On the other hand, cloud accounting service providers such as Amazon Web Services, Microsoft Azure, and DigitalOcean maintain higher security standards.
6. Enjoy a scalable automation Cloud accounting automates transactional processes and eliminates time-consuming tedious work. This gives businesses a chance to improve operations. It also reduces human errors, eliminates redundant data entry, and saves time. By embracing cloud accounting, small and medium-based businesses can drastically improve their productivity and reduce operational costs.