What is Cloud Accounting and Why is it Growing so Fast?

Posted 08 September by Barb Easter in Accounting, Entrepreneur, Small Business

Is it time for you to jump into the new world of cloud computing and leave your old technology behind?

The idea of cloud accounting has revolutionized the way accounting works. To understand the benefits, you first need to know what cloud computing is all about.

“The cloud” is essentially a remote computer (server) that stores your data. The remote system also contains the software that lets you access, update and interact with your data.

This is what cloud computing is all about. You’re connected to one of the server networks, and you can use software and manage your data all online. Cloud accounting is a similar concept where you manage all of your accounting tasks but that software is run through remote servers. Xero and Quickbooks Online (QBO) are the most notable examples in the world of cloud accounting.

The Benefits of Cloud Accounting

1. Flexibility

The first thing to consider about cloud accounting is the flexibility it has to offer. Without much of a hassle, you can have all of the accounting work done through software that you can access from virtually any computer or even a mobile device. That means that you aren’t dependent on your personal computer when you need to access your data.

You’re also not at risk of losing all of your data if you lose your computer, forget to back up or simply don’t have your computer on hand when you need it.

2. Improved Cash Flow

When setting up a business, the capital to be invested makes all the difference. With all the recurrent costs, you won’t want your accounting software to cost you much. This is where cloud computing can come in handy. With little or no upfront cost and a modest monthly payment, you can better manage your startup and ongoing costs.

3. No Updates Required

Another huge benefit of cloud tools is that they are continually being updated and improved with little to no action required from you. That means no more big costs and time-consuming updates. Once you’ve signed up for the services, then you can sit back, enjoy and cherish the benefits of cloud accounting.

4. Security and Auto-backups

Another aspect associated with accounting networks is the financial data. It has to be secure, but at the same time, should be easily accessible as well. The conventional ways of doing business tend to focus on one and ignore the other. The leading cloud accounting tools all promote their industry leading security and regularly backup your data.

The aspect of security cannot be stressed enough. Working with financial data is a strenuous process because it involves data security across various levels. With cloud computing, you can be sure about the security of the accounting information you pour into the system. Since a remote software does not involve personal computers, so such a system is inevitably more secure.

With the back-up in place, you don’t have to worry about the financial data being lost, as cloud computing software ensures security and financial data relevance.

Convenient, efficient and up-to-date tools provides you with all the time and space you need to ponder over business issues, have your thinking cap on, and let your business acumen do the rest for you.

5. Easy Collaboration

Gone are the days when the accountants were the only ones around having a knowledge of how the financials of a firm works. With cloud computing, you’re able to sneak into the world of cloud computing and let the accountant know about the exact requirements you may have regarding a particular project.

If you’re working yourself as an accountant, then cloud computing helps you collaborate in a more secure, safe and serene environment with other stakeholders involved. With the aid of a remote network, you can collaborate with the team members efficiently and instantly and ‘version control’ issues are a thing of the past.

6. Accuracy

Accounting software isn’t always gaffe-free, but with cloud computing, the likelihood of an error in accounting estimate is highly unlikely. This is because of the well-structured remote software that is put to use after rigorous and thorough testing.

This makes these remote softwares accurate- making ‘cloud computing’ a must-have for accounting and management firms. Also, an instant overview is another feature you wouldn’t want to miss out on.

You don’t have to wait for all of the accounting data to be compiled before you can go ahead and check the numbers for consistency etc. Cloud computing does all of that on the go, i.e. all of the financial data and accounting information is overviewed during the processing phase. Also, if you’re to do it manually, then you can also do that using remote servers.

7. Power

Since a cloud accounting software is designed to help you out with accounting estimates etc., it isn’t just about getting the numbers in. If you’re unsure about an accounting standard, or you’re skeptical about the application of a particular principle, then cloud accounting can serve as an expert as well.

For instance, if you’re unsure about depreciation methods and the one to be applied in a given scenario, then remote software can provide you with all the necessary information you require to get the gist of the entire process, including getting the workings done as needed.

8. Connecting to Other Critical Tools

Accounting software can often be the cornerstone for a much larger, integrated system that helps you run your particular business efficiently and proactively.

The leading accounting tools all feature partner applications that you can pick from, connect and use as a single system. For instance, you can connect to software that will create advanced reports, connect to sales pipeline tools, inventory systems and forecast your cash flow, all with the latest data you entered into your accounting system.
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Dryrun helps small businesses forecast their cash flow, predict their sales pipeline and compare ‘what if’ scenarios to stress test the decisions that will impact their finances. It also connects to leading cloud accounting and sales tools. Learn more.

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