What is Cloud Accounting?
Cloud accounting is a buzz phrase that is routinely used in the accounting world. Essentially, it refers to accounting software that lives on the internet (opposed to your computer). As the accounting system is hosted online, business/accounting staff can access the information remotely, anytime.
This article will explore the differences between traditional accounting software and cloud accounting software. I will stress that traditional accounting software has been the status quo since the onset of computers and is very effective in managing a company’s accounting transactions.
With the onset of technology and the internet, cloud accounting software has become a strong alternative to traditional accounting software. It has many benefits that ultimately can increase efficiencies within your business operations.
There are many wonderful benefits of introducing cloud accounting to your business, including the following:
· Upgrades to software is handled automatically by the cloud software developer, so you do not need to worry about constantly updating your software.
· The accounting system can be accessed remotely through your username and password. As a business owner, this is beneficial as you can see real time financial data no matter where you are located. For staff, this remote access is beneficial as they can work remotely.
· Your accountant has real time access to your financial information as well, which can help them provide you with real time, relevant advise when needed.
· Third party cloud software (or apps) can easily integrate with your cloud accounting software. This third party software helps automate and streamline many of the manual processes that are common within a traditional accounting system. For example, instead of entering receipts/invoices manually as typically done in a manual accounting system, with a cloud based system, a staff member can simply download an app and scan these receipts/invoices. The app can then read the text and values on the receipts/invoices. This data can then easily feed into your cloud accounting system. This will greatly reduce the time spent on manually entering each receipt.
· There are hundreds of apps out there. However, your business can choose the ones that are relevant to them. Common apps include those relating to payroll, business analytics, e-commerce, inventory, data extraction of invoices/receipts, and many others.
· Many small business owners who are on the cloud like using either either Xero or Quickbooks Online as their main cloud accounting system. These systems can handle the requirements of most small businesses.
If you have any questions or would like to see a demo, feel free to reach out.