A Beginner’s Guide to Cloud Accounting Success: Everything to Know
Living in the world of modern technology, you’ve heard a lot about different cloud services. As an accountant or bookkeeper, cloud accounting has become a reliable tool for companies to use.
But what exactly is cloud accounting? And, even if you’re up to speed on the definition, what kind of software should you be using?
Keep reading to learn everything you need to know about cloud accounting success to stay informed!
What is Cloud Accounting?
Most digital accounting uses software hosted on a computer hard drive, like QuickBooks. But cloud accounting uses software that’s hosted online on the cloud.
Basically, cloud computing means storing data over the internet. This means you don’t need to use your computer’s hard drive. Cloud accounting software is similar to transitional self-install software. But the data is stored and returned to the user through the internet.
But, there are a few differences between cloud accounting and traditional accounting. Since accounting data can be accessed wherever there’s an internet connection, cloud accounting is more flexible. This also allows businesses to share information person to person without needing to send files.
Also, cloud accounting software is able to update financial information automatically. This means reporting is in real-time, unlike traditional accounting software. Important information like account balances are up to date and have fewer errors than manual entry.
Is Cloud Accounting Secure?
Cloud accounting solutions are encrypted and password protected. This makes them a secure system for storing important information.
When sharing information on the cloud, both parties need to have access rights to the same system. They’ll also need password information.
Also, major cloud accounting solutions are backed up with servers in more than one location. This means if one network fails, you should still be able to access the software, and your data.
With traditional digital accounting, a laptop or computer could be compromised and either stolen or lost. When you share information from traditional accounting, it’s usually done through flash drives, which could also be lost or stolen.
There are risks to both methods. But with cloud accounting, major companies have taken a lot of methods to ensure sensitive data is protected.
What Are the Benefits to Using Cloud Accounting?
The benefits of cloud accounting software will vary depending on which brand you use. Some solutions might serve more bookkeeping and accounting functions than others, so the one you choose will depend on your needs.
In general, there are many benefits to cloud accounting applications. One benefit is the ability to automate processes. Almost everything is manual with traditional accounting. So the ability to automate these functions creates a lot of efficiency. This can help grow your client base and keep clients happy as you’re delivering fast results.
Also, it’s a huge benefit to be able to access data from anywhere you have secured WiFi. This can help accountants to visit clients at their businesses or homes, and build lasting relationships. It also allows bookkeepers to have the option of working remotely.
Updating information in real-time has also greatly helped accounting companies. Accessing financial information quickly allows businesses to make important decisions faster.
Most traditional accounting software is already digital. But traditional accounting is shared by printing information or using a hard drive or flash drive. Going paperless with cloud accounting removes the need to physically manage documents or flash drives.
What Kind of Software Should You Use?
Again, the solution you choose will depend on your business’s needs. One of the benefits of cloud accounting software is that you can integrate with other cloud-based solutions.
This type of integration will improve your efficiency. You’ll be able to have data from other applications you’re already using, like SalesForce. The ability to incorporate private companies with many applications will increase your business offerings.
Quickbooks Online and Xero have popular cloud account software. Also, Hubdoc is a cloud accounting application that pulls financial data automatically.
Another option is NetSuite Financial. This software has financial accounting, reporting, analytics and payment management. All these features can be accessed through a web browser and on a mobile device.
Also, Sage Intacct provides applications that are suited for small and medium-sized businesses. They also include real-time financial insights.
A lot of these solutions will have APIs that you can use to integrate with the other business applications you use. There are many solutions on the market, so further research is likely required to make your decision.
Is Cloud Accounting Expensive?
Cloud accounting software is often available as a subscription from a SaaS company. The pricing model could depend on what else this company is offering you to help you meet your business goals.
As mentioned earlier, cloud accounting gives you the option to go paperless as a company. So this will save you money and space when you aren’t manually sorting through paper documents. There’s also less server infrastructure that’s needed to store the data.
A lot of accounting companies with traditional digital software need an IT staff to maintain the software. They’ll need someone in-house who can update computers and ensure no information is lost. But, cloud accounting eliminates this need. Plus, depending on the software you choose, you’ll likely have a support team who can help you.
Cloud Accounting Success is Important for Your Business
Being able to provide clients with up to date financial information is invaluable. Cloud accounting success helps your business to function quickly and store information online. This means your company is more efficient and can work from anywhere.
Follow the guide above to determine your company’s cloud accounting needs and which solution is right for you.
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