The Rise of Cloud Based Accounting

Rise of Cloud-Based Accounting

Amidst the pandemic and business moving to online platforms, cloud-based accounting is on the rise. According to Businesswire, it is predicted to increase at a CAGR of 6% between 2020 to 2024, making remote work easier. Cloud-based accounting offers many benefits to business owners and accountants, allowing firms to access data anywhere and anytime.

1. Less administration: With cloud accounting software, business owners remove the need to contend with time-consuming software installation, backups and other administrative tasks, because you’re accessing the software over the internet. Businesses do not have to worry about preforming regular backups.

2. Software is always up-to-date: Because the software is in the cloud, you always have the most up-to-date version and never have to worry about upgrading software.

3. Automation: Cloud-based accounting platforms automate many accounting and banking tasks, reducing manual work.

4. Ease of compliance: Cloud accounting platforms help private and public companies with tax compliance by producing accurate financial statements, quarterly tax estimates and yearly tax returns. This helps business owners avoid under-reporting tax liability, which could prompt audits or fines, or over-reporting and paying too much.

5. Paper-free/eco-friendly: Traditional accounting often entails paperwork — lots of it. In today’s digitized world, it’s both inefficient and unnecessary to physically store archived paper records or manually distribute paper reports to investors, lenders and other parties.

6. Data security: You may have concerns about storing sensitive information in the cloud. But cloud accounting services enhance security for most businesses in several ways. First, cloud providers apply multiple levels of security, including advanced encryption and access control, to ensure that only authorized users can access your data. They also automatically back up your data so you don’t run the risk of losing vital financial records. If an employee loses a laptop or an office is damaged by fire or flooding, your data is still secure since it is stored online. Your IT team can then focus on securing endpoints and making sure employees have the proper access rights for their roles.

7. Scalability: One of the cloud’s most appealing features is scalability. Managing finances with spreadsheets quickly becomes unmanageable as a business expands, and desktop-based accounting systems typically offer limited functionality, which can hamper a growing business

8. Accuracy: Cloud-based accounting software improves accuracy by eliminating many of the error-prone manual steps that are required when using spreadsheets

9. Customization: Every business is different, which is why it makes sense to choose cloud accounting software that can be customized to your organization’s individual needs. Some cloud accounting solutions allow you to tailor processes and workflows to better match the way your company operates.

10. Accessibility/availability: Unlike old-school desktop accounting software, cloud-based systems free you from the confines of your office. With online accounting software, authorized users can log in from any location, 24/7, through a web browser or mobile app.

11. Real-time reporting and data visualization: When the business manages accounting using spreadsheets or paper-based processes, it’s difficult to get a quick, accurate, up-to-date of view of business performance.

12. Integration possibilities: Some providers of cloud accounting solutions offer broad suites of integrated business applications that share the same central database. As your company grows, you can add modules that handle almost every aspect of the business, from payroll to inventory management, marketing and ecommerce.

13. Collaboration: Because all financial data is stored online in a single database, team members can collaborate more easily. There’s no need to manage multiple versions of the same file or copy data onto thumb drives to share it with others. Employees can work together from anywhere, as long as they have internet access. This can accelerate the financial close process and simplify other tasks, such as forecasting.

14. Efficiency: Automated accounting processes, real-time access to accurate information and reduced administration contribute to a more efficient accounting function overall, which helps boost the efficiency of the entire business. Your staff will waste much less time manually entering and checking data, and increased accuracy and built-in controls mean they expend less effort tracking down issues, such as mismatched invoices.

whether you’re a growing business or a global corporation, moving to a cloud-based accounting software system can increase efficiency and provide real-time visibility into financial performance.

Sources:

15 Benefits of Cloud Accounting, David Luther, Digital Content Strategist, Sept. 3 2021