7 Benefits of Cloud Accounting

The use of the cloud is becoming more prevalent, with many of us using it daily, for example, Netflix, Dropbox and Google Drive. The cloud is programs, applications, services, and storage that is accessed through the internet, rather than running on a desktop computer hard drive. Cloud services can be accessed from web browsers or mobile desktop applications.  It has wide-ranging applications and provides immense benefits to those who utilise it. A popular use of the cloud is cloud accounting.

What Is Cloud Accounting?

Cloud accounting is where the accounting processes and financial data are accessed through the internet. Traditionally, accounting systems were desktop-based, meaning software was installed on the desktop computer and run from a computer’s hard drive or through their onsite servers.  This had many drawbacks such as limited access to data, required the business to purchase expensive equipment, perform system maintenance and the tedious task of backing up data.  Cloud accounting provides the same functionality as a traditional desktop-based system, but it runs from the cloud, offering a business many additional benefits.   There are many cloud accounting software available, and some popular ones include Xero, MYOB, Sage, QuickBooks, and Oracle.

Benefits of Cloud Accounting

Reduce Costs

Avoid the upfront cost of purchasing expensive computing infrastructure, equipment maintenance and engaging computing professionals. Save money by leveraging off economies of scale and only pay for the services you need through a cloud service provider.  They will provide and manage all the computing infrastructure. You will typically pay for the services you need on a monthly subscription, thus lowering your operating costs. This provides flexibility for your business to scale while avoiding unnecessary expenses.

Save Time

The software is updated and installed, and data is backed up automatically with cloud-based accounting, so you don’t have to do it.  Cloud accounting supports integration with third-party providers, so data flows into the business accounts automatically. This allows for the automation of routine tasks, saving you time by reducing the need for data entry.

Access Your Financials From Anywhere

You have on-demand access to your accounts quickly and easily from anywhere with an internet connection.  Your business has the flexibility to work across multiple locations or provide working from home arrangements, and multiple users can access the financial data simultaneously.  

Work Smarter

Financial processes are streamlined with automation and multi-user access.  Cloud accounting software automates some functionalities within invoicing, payroll, expenses, debtors, and real-time bank feeds. This reduces the likelihood of errors, improves efficiency and data accuracy saving you valuable time. Access to real-time numbers facilitates up-to-date reporting, providing visibility of the accounts, balance sheets and an accurate snapshot of the business health, giving you a clear picture of your business as a whole.  Collaboration with your accountant, colleagues, and key stakeholders is made simple. They can stay connected to your accounts with multi-user access capabilities and permissions that can be tailored to control access.   You can easily share financial documents and reports and provide input simultaneously, avoiding the need to use cumbersome USB sticks and back and forth emails.

Greater Insights

Cloud-based accounting facilitates timely, detailed, and accurate data, which enhances reporting and financial information quality.  This aids faster and improved decision making and frees up your time to focus on higher-value tasks and other business opportunities to achieve growth.

Outsource

Another benefit of cloud-based accounting is the ability to outsource the accounting and payroll functions while focusing on the core functions of your business. Outsourcing to qualified accountants and bookkeepers will remove the pressure of back-office processes and complex regulatory compliance while still having the financial information at your fingertips.

Data Security

The cloud provides advanced security features which guarantee that the accounting data is stored and managed securely. All data is automatically backed up and securely stored, so if your computer crashes or is lost, your data is safe and instantly available in the cloud.  

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