How the Cloud Has Revolutionized Accounting

Traditional accounting software – and the financial data it stores – has long been hosted on a single user’s computer. Many years ago this was considered innovative. Ledgers had only existed on paper until the PC came along. The idea that financial data could suddenly be cleanly organized and accessed electronically was revolutionary. The accounting process was made much more efficient with the power of the desktop computer behind it.

Technology has come a long way since then. The Web gave way to “the cloud,” making the way we use our computers even more efficient.

Despite the fact that the cloud is becoming the standard for accessing applications and storing data, many people are still stumped when asked to explain exactly what it is. Simply put, the cloud is the term for remote servers that store data. It’s the anti-desktop. Instead of keeping thousands of music tracks or GB’s worth of software on your hard drive, you can now store them remotely while still enjoying the same level of accessibility.

Accounting software has undergone another major shift with the widespread adoption of the cloud. Online accounting software incorporates the upside of traditional desktop accounting software with the many benefits of the cloud. The following list outlines how the advantages of the cloud create a more efficient accounting process.

Accessibility

Accountants have multiple clients, and working on the personal computers of each one or manually uploading data onto their own desktop creates all kinds of inefficiencies. The big plus of cloud accounting is that it makes financial data available anytime, anywhere, from any device with an internet connection. Online accounting software makes it easy for accountants to access their client’s ledgers from any computer, whenever it is convenient.

Collaboration

Accessibility creates greater collaboration. Multiple stakeholders are able to access books located online, allowing for the workload to be shared. Small business owners and bookkeepers can take care of the basic responsibilities like bank reconciliation and the payment of bills. Accountants, on the other hand, can handle the more complex tasks, such as in-depth reporting and long-term forecasting and planning. Cloud accounting software relieves accountants of busywork, giving them the ability to offer more valuable services to their clients.

Real-time

Another advantage of online accounting software is that it provides real-time insights into a small business’s financial situation. With desktop accounting software, accountants have to wait for the opportunity to access their client’s financial data. This often leads to retrospective advice. Being able to view current data and respond to it immediately lets accountants proactively address the needs and problems of their clients.

Efficient Setup

Getting off the ground with cloud accounting software is simple compared to desktop systems. There are no expensive upfront costs or major investments of time associated with purchasing and installing out-of-the box software. In most cases you just pay your first month subscription fee and begin. Furthermore, cloud users do not have to worry about a new version of the software being released down the road, causing their current solution to become instantly out-of-date. Online providers update their software in the cloud and make it immediately available to all their customers.

Data Backup

With desktop software, a hard drive crash, a water spill, or a power surge can mean the total lose of years worth of information. With the cloud, data is stored remotely, eliminating the risk of financial information being lost forever due to unforeseen circumstances. Most online software providers do automatic regular data backups – often multiple times throughout the day – usually on servers in multiple locations.

Security

The protection of private information is often a concern of people wary of the cloud. However, the reality is that online accounting software is often more secure than its desktop counterpart. When working off the desktop, you will likely be required to email data to your accountant or transfer it using an external storage device. Unfortunately, these delivery methods are less secure than the cloud. Most online accounting providers use multiple layers of firewalls and encrypt data transferred to and from the cloud, ensuring that everything possible is done to protect user data.

The cloud has changed for the better many conventional workflows. Accounting in particular has experienced great benefits from software that increases efficiency, provides more accessibility, and protects the valuable data of the user. Overall, cloud-based accounting software streamlines the accounting process, delivering a lower total cost of ownership than its desktop counterpart.