The inception of cloud technology has revolutionized various industries. Accounting firms are no exception. Cloud accounting solutions offer many advantages over traditional on-premise solutions. You can work from anywhere, anytime, automate lengthy manual processes, improve accuracy, speed up financial closure processes, and more.
If you’re still using an on-premise solution to manage your financial information, read this post to get a detailed insight into the benefits of a cloud solution. It will help you make an informed decision for your business that can transform the way you do accounting.
What is Cloud Accounting?
Cloud accounting means keeping the records of income and expenses, assets, and liabilities online. When on the cloud, the information is encrypted. As such, only the users with valid login credentials can access the data.
Cloud accounting software is similar to on-premise software; however, it is hosted on remote servers, similar to the SaaS business model. Unlike the traditional on-premise solution, the cloud stores your data, processes it further and returns it. You can use devices like smartphones, tablets, iPad, laptops, etc., with the internet to access the cloud-based accounting application.
If you’re still debating whether or not to opt for cloud accounting software, have a glance at the below-mentioned cloud accounting benefits.
How’s Cloud a Perfect Solution for Accounting Firms?
1. All-Time Availability
One of the key benefits of cloud accounting solutionsis remote access. Businesses like accounting firms must be able to assist their clients all the time, including during non-business hours. Inability to cater to your client’s needs could result in reputation and financial loss. You can access your data from anywhere and anytime using a cloud-based accounting solution. Such features allow you to use your preferred device and maintain a work-life balance.
You can significantly reduce manual work using a cloud-based accounting application. For instance, cloud accounting software can automatically import all your bank account transactions, produce invoices, and schedule reports. Besides, it helps you calculate discounts and taxes and flag exceptions if an invoice doesn’t match a purchase order. Accounting firms dealing with international sales can also opt for specific cloud accounting software programs that help handle tax calculations for multiple countries.
3. Data Security
Keeping data secure is essential for any business, especially if it is an accounting firm. This is because an accounting firm stores sensitive financial information of its clients. If it falls into the wrong hands, your reputation could be at stake, resulting in financial loss. However, using a cloud-based accounting solution can enhance the security of data. Multiple levels of security, including advanced encryption and access control, ensure high data security for businesses. In addition, cloud providers automatically back up your data. As such, they eliminate the risk of losing critical financial records. If your laptop is stolen or there’s a natural disaster like fire, flood, or earthquake, your data is still secure as it is stored in the cloud.
4. Lower Overhead Expenses
Using an on-premise accounting solution requires you to invest in server setup and employ IT professionals to maintain the server’s upkeep. With cloud accounting in place, you can eliminate the cost of maintaining IT infrastructure. From software deployment to server maintenance, your cloud provider takes care of them all. If you encounter any issues with the cloud-based software, you can contact the service provider’s customer care department and get instant help. Such features of a cloud-based accounting application make it among the leading choices of many accounting firms.
The expansion of a business makes it challenging to manage finances with spreadsheets. With desktop-based accounting applications offering limited functionality, businesses often fail to attain the desired results, which hampers their growth. Comprehensive cloud accounting software can scale and meet your business needs if you have a new business with expansion plans. Initially, you can opt for essential accounting functions, and as your business grows, you can add features and users.
6. Real-Time Reporting and Data Virtualization
Businesses using spreadsheets or paper-based processes to manage accounting often find it challenging to get an accurate and up-to-date view of business performance. As such, you might fail to identify problems early enough to stop them from leading to more significant issues. However, you can mitigate this problem using cloud accounting solutions as it provides real-time access to centralized financial data. Cloud accounting solutions help you get an up-to-date view of your business’s current financial position. With cloud accounting software in place, you get access to customized dashboards and other built-in analytics mechanisms. Using it, you can transform complex data into charts that can be easily understood. When you visualize the data, you get new insights into the business and can quickly identify trends impacting your business. All these features of cloud accounting software come at a significantly lower price.
Another significant advantage of a cloud accounting solution is that you can customize it according to your business needs. Specific cloud accounting solutions help you customize processes and workflows to ensure that they match your business’s operations. You can tailor customized dashboards to give your employees a quick view of key process indicators and other business information. This is unlikely in the case of an on-premise accounting solution, due to which many accounting firms prefer using cloud-based accounting software.
8. Improved Efficiency
Getting real-time access to error-free information and automated accounting processes helps ensure more efficient accounting functions. This, in turn, boosts the efficiency of your entire business. Besides, your employees don’t need to invest much time entering and checking data manually. It helps them ensure accurate data, and since it is available throughout the organization, every authorized user can use it to make effective decisions to improve business performance.
Irrespective of the size of your accounting firm, using cloud accounting software can significantly boost efficiency and provide real-time visibility into financial performance. They offer significant advantages over traditional on-premise accounting solutions. If you plan to automate every accounting task while reducing manual effort and improving efficiency, a cloud-based accounting tool is ideal. It helps you access real-time information and collaborate from anywhere in the world. Last but not least, you can use comprehensive cloud accounting solutions to integrate them with various add-ons and adjust to the needs of your growing business.