The cost of maintaining a paper-based accounting system has been steadily increasing for years. It’s difficult to keep up with the ever-changing tax laws, the changing way that businesses are operating and the constant growth that new companies experience. The ramifications of this have been felt across the board. With nearly every business feeling the effects of an increased operational cost, they’ve all begun looking for ways to drive down their operational costs and increase their profits. You might now be asking yourself “but what is cloud accounting? How could it benefit me?” Let’s explore the benefits that come with moving your accounting system over to the cloud.
Increased Accessibility and Flexibility
One of the biggest benefits of cloud accounting is the increased accessibility that it brings to businesses. As your requirements for accounting and reporting increase, you’ll find that you need more sophisticated tools to help you do your job. You may also find that the older tools you have in place just aren’t flexible enough to suit your needs. Cloud accounting can be a great way to increase accessibility and flexibility in your business. For example, as your business needs increase, you can simply move your accounting system to the cloud. With a simple website update, you can have a more modern and attractive accounting system that makes reporting easier and more accessible to your entire team. This type of flexibility is one of the major benefits of cloud accounting.
Highly Secure and Robust
Cloud accounting is robust and highly secure. This comes as a result of the wide range of security controls that are in place to ensure that your data is protected. With paper-based accounting, the sensitive nature of your data makes it susceptible to theft. If a client’s data is stolen, you may be left with a significant legal issue. There have been several high-profile data breaches over the years. With a robust cloud accounting system, your data is highly secure and robust. It’s protected from both internal and external threats. You can also rest easy knowing that your data is fully backed up. This means that if your system is ever hacked, you’ll have complete peace of mind knowing that you can rely on a backup to restore your data.
Low Total Cost of Ownership
Cloud accounting can provide significant cost savings. Many businesses start with a cloud-based accounting system but decide to switch to an on-premises system as their business grows. The cost of setting up an on-premises system can be significant. With a cloud-based system, you can start using it immediately. You can also set up a private cloud or an Amazon Web Services (AWS) account to host your accounting system. You can then use it as a backup or to test new features before committing to an expensive setup. Many businesses start with a cloud-based solution but switch to on-premises accounting when the time comes to expand the team.
Increase in Reporting Efficiency
Cloud accounting can also make your reporting more efficient. As your business grows, you’ll find that you need more sophisticated tools to help you do your job. This can create a bottleneck as you struggle to find ways to use the tools that you have. Cloud accounting can make reporting more efficient. This comes from several factors. First, the cloud-based accounting system can be accessed from any device. This means that you don’t have to worry about your employees having the right equipment to access their data. Cloud accounting can also make reporting more efficient by making it easier to access data from different systems. This can help you to fully understand the various sources of information and make sure that you have complete and accurate data.
Other Benefits of Cloud Accounting
Several other benefits come with moving your accounting system over to the cloud. Let’s take a look at a few of these.
- Scaling your system: As your business grows and the demand for your accounting system increases, you can scale your system with a simple API upgrade. This means that you don’t have to spend time and money on expanding your existing system.
- Reduced upgrade cycle: When you move your accounting system to the cloud, you can avoid the upgrade cycle that many businesses experience. This means that you don’t have to waste time and money on upgrading systems that are no longer being used.
- Better auditing: Cloud accounting can also make it easier to audit your books. This comes as a result of the way that the cloud is structured. It’s easy to go back and look at how a specific transaction took place. This can be helpful when it comes to auditing.
- Modern and attractive reporting: As your business grows, you may find that the aging software that you have in place just isn’t flexible enough to suit your needs.
Cloud accounting can make your reporting more modern and attractive. This can help to drive up the overall efficiency of your accounting system and make it easier to access data across your organization.
Which type of Accounting Should You Use?
Several different types of accounting exist. Each has its advantages, but each also has drawbacks.
- Traditional accounting: This is the type of accounting that you had before you started using the cloud. It relies heavily on paper documents and you need to keep these. It’s prone to human error and can be difficult to keep track of.
- Online accounting: This relies on a software system to collect and manage your data. Some different types of online accounting exist, including cloud-based accounting.
- Hybrid accounting: Hybrid accounting combines the best features of online accounting and traditional accounting. This means that you have the benefits of both types of accounting.
How to Start Using Cloud Accounting Immediately
There are several different ways that you can start using cloud accounting immediately. Select accounting software. The first step is to select a solution that you want to use. This will help you to decide whether cloud accounting is right for your business. Set up your system. Once you’ve chosen a solution, you can start setting up your system immediately. Investing in a tool is the most important step to invest in a solution that you want to use.
Conclusion
Cloud accounting can bring many benefits to your business. It can help you to make your reporting more efficient, it can help to scale your system and it can help you to reduce the upgrade cycle. It can also help you to set up your system and invest in a solution that you want to use. It’s important to note that you don’t have to commit to an expensive system right away. You can start with a cloud-based solution or a more affordable on-premises solution.
