WHAT IS CLOUD ACCOUNTING?
Traditionally, accounting was executed using software hosted locally on a desktop computer’s hard drive. Cloud accounting, on the other hand, is accounting that is executed using software that is hosted remotely on the cloud – online.
WHAT ARE THE BENEFITS OF CLOUD ACCOUNTING?
- The ability to automate many manual accounting and bookkeeping processes. These automation capabilities enable accountants/bookkeepers and their clients to save time and increase efficiency, allowing them to spend more time on business growth.
- The ability for data to be accessed regardless of location or device. This facilitates remote services and “anytime” communication, which will help to build stronger relationships between an accountant/bookkeeper and their clients.
- The ability for data to be updated in real-time. Being able to access financial data and information quickly (i.e., in real-time) will empower businesses to make informed decisions sooner rather than later.
- The ability to easily scale to meet growing business needs. Let’s say your business currently makes 0-100 transactions per month but experiences rapid growth that causes this number to jump to 10,000+ transactions per month. Your cloud accounting software should be able to easily support this growth.
- The ability to facilitate a paperless environment. This will eliminate the need to physically store and manage paper documents, which is not only beneficial from a cost and office space perspective, but also for the environment.
- The ability to provide automatic updates. This will help to further improve the functionality of the application and better enforce security.
- The ability to reduce costs. Cloud-based software does not incur the costs associated with traditional software (including maintenance, upgrades, system administration, etc.).
- The ability to integrate with other cloud solutions. These integration capabilities will improve the efficiency and increase the power of your cloud accounting technology stack.
IS THE CLOUD SECURE?
Given the sensitivity of the data associated with cloud accounting applications (e.g., banking and financial data), security is a top concern in the cloud accounting space.
When compared to traditional desktop accounting software, which could be compromised if a company computer is stolen, lost, or damaged, cloud accounting software has many security advantages. Each cloud accounting solution should have its own security policy outlining how it protects sensitive data. Most solutions use state-of-the-art measures such as multi-factor authentication and encryption, ensuring sensitive data will remain secure.
WHAT WILL HAPPEN IF I DON’T ADOPT CLOUD-BASED TECHNOLOGIES?
The cloud is the future. Even if your on-premise accounting solution seems to function “just fine”, or if you’re diligent about managing your traditional processes, the world of accounting is inevitably changing, and it’s important for your business to keep up.
WHAT KIND OF SOFTWARE DO I NEED FOR CLOUD ACCOUNTING AND HOW MUCH DOES IT COST?
Quickbooks Online and Xero fall into the category of cloud accounting software.
However, a key benefit of cloud accounting applications is that you can build upon your accounting software stack to better suit your business needs and improve the efficiency of your workflows. For instance, Hubdoc is an application that automatically fetches financial documents and extracts key data. When integrated with any of the platforms mentioned above, the value of both Hubdoc and your general ledger software increases.
Cloud accounting software is most often available for purchase as a SaaS (Software as a Service) subscription model. The pricing of your cloud accounting software stack will vary based on the applications you need to meet your unique business needs.