With the introduction of computers, accounting systems got a major upgrade as they moved from paper to screens. And cloud accounting is the next step in their evolution. With cloud accounting, companies can store their accounting information on a remote server and access it anytime. This makes the entire process a lot easier and offers increased mobile capabilities. This article explains cloud accounting in detail, along with its benefits and functioning.
What is cloud accounting?
An accounting software allows a company to do its basic accounting activities, like keeping track of its finances or generating payroll, on an office computer. However, a drawback is that this software only exists on the office server. So, the employee managing the accounts can only access this software from their office computer. What cloud accounting does is that it stores the accounting data on a remote server, instead of a local server. This means that if an employee has the right credentials, they can log-in from anywhere. This can ease up the remote working process, since regardless of where one is located, the accounting software and data can be accessed and used.
The benefits of cloud accounting
A cloud-based accounting system can have the following advantages for a company.
Provides easy access
When employees use a cloud accounting system, they benefit from easy access as long as they have the right credentials. They can use the accounting software and get started on their work immediately at any time even if they are away from office. Due to this, remote working systems become more efficient, reducing the need for longer hours at the office each time one needs to access the accounts. Plus, cloud accounting does not even require employees to download an app or a software, as it can be easily accessed by a web browser.
Ensures up-to-date information
A cloud-based accounting system eliminates the stress that arises from spending hours to find specific data entries or transactions. It can provide up-to-date information regarding the company’s accounts with a few simple steps. Some of these softwares even allow making automated payments to vendors and making invoices for customers on specified dates. All these features are vital when the management team is trying to plan future expenditures or make financial decisions that will affect the whole company.
Ensures accuracy
With a cloud-based accounting system, a company can be assured that its tasks will be completed with accuracy, almost every time. The automated systems reduce the risk of calculation and accounting errors. They can also provide an accurate report on the company’s expenses and transactions whenever needed.
Provides data security
Cloud-based accounting systems ensure that a company’s data remains secure. They may even offer more security than traditional accounting software. Since traditional accounting systems usually rely on a local server or a hard drive, the data they contain can be easily stolen or lost. The cloud-based system ensures that such an event never occurs. Since it only grants access to individuals with valid credentials, it reduces the risk of any data breach. Plus, with the information being stored on a cloud, it is not possible for data to get lost.
The software stays updated
Since traditional accounting software do not rely on an internet connection, a company would need to put in time, effort, and sometimes money, to keep them updated. Cloud-based accounting systems, on the other hand, do not require such effort. With these software being present over the internet, they almost always provide their users with the most up-to-date systems.
No installation required
Since cloud-based accounting systems can be accessed via a browser, they do not require installation for new computers. Whether a company has brought in new devices or has hired new personnel, all they will need to give them access to the accounting system is valid credentials. There will be no need to manually install any software, which can cause a lot of delay in the tasks.
Allows easy collaboration
If a company wishes to make some changes in accounting to further streamline their work, they can do so easily with cloud-based systems. These systems have open APIs, meaning a company can easily add third-party apps like online invoicing apps to the accounting system for their convenience. This not only saves the company’s time but also saves their money, as they do not need to purchase separate software for different accounting tasks.
Allows scalability
Most cloud-based accounting systems do not have limits on their server space. Companies can benefit from this aspect, as when they acquire new clients or expand their business, they will not need to buy new hardware to store more accounting data. Cloud-based accounting systems will allow them to grow easily by simply storing more data in their cloud server.
Access to tech support
If ever a company runs into a technical problem with a cloud-based accounting software, they can easily get in touch with tech support. And, with the system being present online, the tech support can solve their issues remotely, without having to be present in the office.
