Cloud accounting simply refers to transactions performed over the internet. A cloud is a platform that makes software and data accessible online anywhere, anytime and from any device. Unlike traditional accounting software where application runs on local computing devices like a PC, could accounting run on multiple connected servers. It does not require any installation and can be accessed by an authorized person from any internet enabled device such as semaphore, laptop or a tablet.
It is important to mention that cloud accounting follow the same policies as traditional accounting. The only difference between the two are the tools used. So, are you thinking of switching from traditional accounting to cloud accounting but you are wondering if you are making the right decision? If yes then you have clicked the right page. In this post, we are going to discuss the benefits of cloud accounting.
1. Top notch security
Cloud accounting is one of the most secured platforms to store information. Unlike traditional system where your intimation can get lost when some steals your computer and delete data, information stored on could can never get lost or corrupted. With could accounting, you are guaranteed that your data will stay safe form hackers and other non-authorized people. You also don’t have to worry about natural disaster like fire outbreak, earthquake or floods damaging your PC thus destroying crucial accounting information as it is the case with traditional accounting. Also, no one can access your information unless you have authorized them to do so. If you want to ensure that the security and privacy of your data is waterproof, then you should switch to cloud accounting. They constantly update the servers to guarantee your data security and privacy.
Going paperless not only makes accounting tasks less cumbersome but it also makes the accounting process more efficient, secure and effective. Traditional accounting that mainly rely on paperwork face the challenge of storage logistics and file retrieval amidst the overload. Storing physical accounting files is also costly in terms of man hours and space. Cloud accounting is paperless meaning that you don’t have worry about storing logistics or something getting their hands on your data. With cloud accounting you significantly minimize the risk of manual errors and fraud that are associated with paperwork. You can retrieve data in split seconds, allowing you to constantly keep track of your finances.
3. Real time updates
Updates in cloud accounting are made in real time. This not only helps to enhance the security of your data but it also ensure that you get real time information about your current financial situation of your business. With real time update to your financial data, you will be able to make more informed decision about the current and future financial situation of your business.
4. Customization of accounting information
Another benefit of cloud accounting is that it allows you to customize your accounting information to suit the needs of your business. This is practically impossible in traditional accounting, with cloud accounting, you can integrate add-ons to customize your business accounting systems. For instance, you can integrate add-ons that allows you to access your sales, invoices, customer engagement among many others under one platform.
5. No installation required
Because cloud based accounting is hosted online, you don’t need to purchase or install any application on your computer. Traditional accounting requires you to purchase and install certain programs on all computer in your accounting department in order to access accounting data. However, that is not the case with cloud accounting. All that is needed when you switch to cloud accounting access to internet and authorization. You don’t need to install any application on your computer to access financial data.
6. You can access financial data anywhere
Cloud accounting allows you to access information from anywhere. All that you need to have is a device to access the internet such as your smartphone, tablet or laptop. This is important because it means that you can monitor your business financial data from your office, home, hotel room and any other place in real time even via your smartphone.
7. It allows you to comply with GST
One of the biggest challenges that most small businesses face is filling their GTS. GTS compliance is a score given by the government to bushiness so that other business can see how complaint they are when it comes to filing of taxes. GST compliance score is calculated based on things such as taxes paid, timely filing of monthly and annual returns and much more. Cloud accounting is GST enabled meaning that it automatically applies GST to all your invoices thus allowing you to file your tax with ease. You can customize your cloud accounting system to remind you when you need to file your GST returns either monthly, quarterly or annually.
8. It makes collaboration easy
Do you want to enhance collaboration in your account department? If yes, then you need to switch to cloud accounting. Because all your financial information is hosted in the cloud means that it can be accessed from anywhere, anytime upon authorization. This means that your accountants don’t have to be in the same office to access information. You can set up access for your accountants to allow them to access your financial data wherever they are. Additionally, you can so control the amount of people who can access your business financial data. For instance, if you want the accountant to process your payroll, you can give him/her temporally access to your payroll without granting them access to other financial data such as your bank account. Additionally, you can also block people from access financial information in real time if you suspect they are up for no good.
9. They organize your finances
Another huge benefit of could accounting it that they help to keep your finances in order. Cloud accounting not only help you to retrieve data with ease but it also allow every department in your business to easily find invoices and update their expenses. This is not usually the case with traditional accounting where you have to do plenty of follow-ups. Proper organization not only makes prevents frauds but it also fosters transparency and accountability.
10. It fosters good relationship
Maintaining good relationship with your employees, vendors, distributors and other stakeholders is important for the success of your business. Cloud computing can help you maintain good relationship with all stakeholders by allowing you to locate invoices, identify payments that are due, late payment and much more. Proper tracking of all your expense and paying them on time will help ensure that you fulfill your financial obligations on time so that you don’t get into conflicts with majors stakeholders. Cloud accounting also allows you to work closely with your accountant to ensure that all your financial data are up to date.
11. They support all popular platforms
Do you prefer using Mac or windows PC? Or chrome, Firefox or internet explorer? With cloud accounting, you don’t have to worry which platform to use as it is usually the case with traditional accounting. This is because it supports all the platforms mentioned above and much more.
12. They are cost effective
One of the biggest benefits of cloud accounting is that it help to reduce your operational cost. Cloud accounting are not purchased but rented. This means that you don’t need to invest in infrastructure as it is usually the case with tradition accounting application. The fact that it is rented means that you don’t have to worry about installation and software maintenance. All that you need to do is pay the required subscription fee and the company dealing with the server will handle the rest. This is important because it allows you to focus on other important things. The fact that you don’t have to invest on servers or software means that your operation cost will drastically reduce. Infrastructure is one of the largest cost associate with managing and storing accounting data. Choosing cloud accounting also means that you don’t need to hire IT experts to maintain the infrastructure allows you to save a lot of money.
13. Large bandwidth
Bandwidth is the amount of data carried from one point to another in a given period of time. Bandwidth is not affected with cloud accounting, meaning that you will run your accounting functions smoothly and quickly. This is important especially for business that sends large amount of financial data.
Cloud accounting will give your business the flexibility it needs to thrive. Unlike traditional accounting that forces you to focus on building infrastructure, maintain servers and supervise your IT expert all the time to ensure that the local sever runs smoothly, cloud accounting eliminates all these hustle thus allowing you to focus on other important things. The freedom and flexibility that cloud accounting provides can make a great impact to the overall efficiency of your business. A survey conducted by Information Week found out that flexibility was one of the key reason why many businesses moved from traditional accounting to cloud based accounting.
15. It provides insights
As we move further into digital age, the demand for more accurate data has become more and more important. As they say information is power. The more accounting data you have, the more efficient you will run your business. With your accounting information stored in the in the cloud, you can easily put in place tracking mechanisms and build customized report to analyze all data provided. This way, you will be able to know which areas of your business are doing well as well as those that are not performing well. You can use the insight that you get from cloud accounting to build action plan and increase efficiencies to meet your business goals.
16. Disaster recovery
One important factor that determines the success of a business is how it is able to handle disaster. Unfortunately, no matter how much you are in control, it is very difficult to prevent disasters from occurring. There are some disasters that are completely out of your control. Natural disasters can affect your local server thus hampering the running of your business. However, if you switch to cloud accounting, then you don’t have to worry about loss of revenue, productivity and brands reputation that are usually associated with disaster. Cloud accounting is not in any way affected by disasters because information is stored on the internet. If your computer is destroyed, you can access your account via your smartphone.
If you have been wondering whether switching to cloud accounting is a wise idea, then today you have the answer. Switching to cloud accounting is one of the best things that you can do for your business. It will not only bring your operations cost down but it will also enhance efficiency and transparency. You will be able to access your business accounting data anytime, anywhere in real time. We recommend switching to cloud accounting if you want to boost productivity and revenue.