Accounting is an old system, considered a language in itself. It existed as far back as humans began trading goods, which could be traced to the Mesopotamian civilizations that existed some 7,000 years ago.
Fast forward to modern times, accounting has been professionalized. The job of an accountant no longer relies on manual recordings of debits and credits; now, there is accounting software that ensures data accuracy. That innovation is further elevated by cloud accounting.
Cloud accounting uses the internet to host and carry out tasks relevant to the profession, including data entry, storage, audit, and processing. This streamlining has rendered the accounting process faster and more reliable.
A truly revolutionary technology, there’s no wonder why cloud accounting has quickly gained loyal adherents. In fact, 92% of US accountants trust the value the technology adds to their business.
If you have yet to be convinced of cloud accounting’s growing clout in the accounting profession and the finance industry, keep reading.
5 Benefits of Cloud Accounting
There are many reasons why cloud accounting is gaining popularity since it helps modern businesses in many different ways. Below are a few benefits of cloud accounting.
- Remote access
Traditional accounting — accounting involving downloaded software in a licensed computer — limits data access to the computer only. In other words, accountants can’t access financial data unless they’re using a specific computer, making it an obstacle for remote teams.
Cloud accounting, meanwhile, allows remote access through validated login credentials. That means data is at your disposal anytime, anywhere.
- Zero installation or updates
Once you sign up with a cloud accounting service provider, the vendor becomes responsible for setting up your system. Their responsibility is to ensure the system stays in tip-top shape through scheduled updates.
Since an external team handles the tools you use, you won’t have to invest in hardware or IT infrastructure, reducing costs. Should the service fail to meet your expectations, you can cancel your subscription and try something new.
- Versatility
Cloud accounting does not discriminate against what device you access it through. There’s no need to update your operating system (OS). Whether the computers you use to run on Macintosh or Windows, they’ll be cloud-ready.
- Security
Cloud accounting vendors take security seriously. They have IT infrastructure to protect their clients’ data from damage or loss and run stringent systems to prevent cyberattacks. You won’t have to worry about your data getting breached.
- Automatic backups
Traditional accounting requires you to back up stored data manually. That pesky requirement becomes obsolete if you work with a cloud accounting service provider since they’ll back up data on your behalf. Moreover, data backup is done in multiple centers, so you can rest assured you won’t fall prey to irretrievably lost data.
If there’s one downside to cloud accounting, it has to be the technology’s reliance on the internet. You’ll be denied access if you are in a remote location without WiFi or if the power goes down.
5 Ways to Maximize Cloud Accounting
If you’re investing money in a cloud accounting subscription, you might as well maximize the service. Here’s how.
- Collaborate with others
Cloud accounting allows access to people given clearance by way of login credentials. The offshoot of this is the ease of collaboration. You can work with colleagues to analyze data at the same time. Even if you’re a freelance accountant, you can outsource some aspects of your job to a virtual assistant with whom you can collaborate online.
- Manage your documents better
Accounting involves the use of various documents. You’ll be handling all sorts of essential records, from invoices to accounting statements. These records come in e-format in cloud accounting.
Not only do you do away with paper, but you also get to do away with having to store documents in physical boxes: All you need is the cloud. Furthermore, any authorized person who needs to retrieve specific records can access the cloud anytime, wherever they are.
- Analyze data in real-time
Financial data analysis is not an easy job. It gets more complicated with a system that does not allow real-time data consolidation.
Consider two accountants from the same firm looking at two different datasets because one had the privilege of an updated file while the other got stuck with the outdated version. The result would be mismatched reports that will require redundant completion of tasks.
Cloud accounting gets rid of this challenge. Everyone with access to the cloud receives the same information, allowing companies to stay aligned much easier.
- Scale your storage
Traditional accounting that relies on computer storage requires an upgrade for when data accumulates, which typically means buying new hardware.
With cloud accounting, you can pay for expanded storage depending on actual needs and not on projected requirements. This can be a viable option to reduce business expenses.
- Improve your accountant-client relationship
The accountant’s job for a client becomes more transparent with cloud accounting. That’s because relevant data and their corresponding reports or analyses may be easily shared with clients if they want to see those documents; the clients can see the real-time progress of specific deliverables.
Meanwhile, the accountant can solicit real-time inputs from clients, improving communication among stakeholders. There’s less room for doubts and misunderstandings because both parties are always on the same page.
Wrapping Up
Technological innovations have made our lives much more manageable and our professions less complicated. Consider cloud accounting. If in the past you needed to record on ledgers manually, these days you can input and access data online and even work with collaborators in real-time.
There’s no excuse for failing to adopt this new technology, even if you consider yourself tech-averse. Innovative technologies have become far more accessible to the average professional; IT proficiency is not a prerequisite here. Rest assured that you will be guided if you collaborate with the right cloud accounting service provider.
Should you get behind cloud accounting, expect your organization to streamline accounting processes. You can devote spare time and resources to more critical components of business operations. Your savings will increase profit margins, allowing your business more room for growth and expansion.
About the Author
 | Luigi Dimayuga Luigi is a marketer and content writer for CloudCfo – the leading online accounting firm for startups & SMEs in the Philippines. In his spare time he enjoys reading books and exploring business ideas! |