Technology has drastically challenged and changed every industry, disrupting bricks and mortar models and moving everything online. Within the accounting sector, financial technology (fintech) firms alongside cloud accounting technology are redefining the future of the financial industry.
Cloud accounting has very obvious advantages to your business operations, but it can sometimes be difficult to get the right information. Our comprehensive guide breaks down everything you need to know about the cloud, as well as the advantages it can give you.
What is cloud accounting?
The term ‘cloud’ refers to large-scale offsite computer servers that a business connects with over the internet. The cloud makes it possible for you to make data and software available online anywhere, anytime and from any device.
Cloud accounting platforms are modelled and priced in the same way other cloud based services are. Think Netflix, Spotify or Dropbox.
What are the key benefits of cloud accounting?
There are many great reasons to move your accounting to the cloud. We’ve written some of them out here:
It saves time!
One big benefit of the cloud is that you can use it to automate many manual processes. Think about all the repetitive tasks that you have to go through each month: producing reports, data entry, generating invoices or even converting currencies.
Now imagine if those processes no longer had to be done manually. Cloud accounting automatically collects and updates all your client information as soon as it happens, eliminating much of the time and effort involved in these types of tasks.
Cloud accounting is often the cheapest way to go. There are no huge IT infrastructure costs or maintenance fees. Instead you can either pay a monthly or annual subscription fee.
With traditional accounting software, when your firm grows in size you are charged extra costs. This might be for software licences, system management upgrades or increased maintenance costs. Sometimes you may even need to buy more hardware, like servers. With cloud solutions, there are no big spikes in cost when you expand a little.
Cloud accounting offers a more secure mode of storing your financial information in comparison to the traditional desktop based software. Traditional tools are tied to one device, which means that sensitive client information could be stolen or lost should any unforeseen cirumstances arise.
Using a cloud system your information is kept private, protected and accessible on demand. Client information is routinely backed up to a server (or multiple servers) at no extra cost and access is granted only when your login credentials are successfully verified by your cloud service provider.
With traditional, desktop-based systems you are tied down to working from the office because your user data and client account information is locked to that computer system.
Cloud-based accounting gives you flexibility to decide where and when you can work. Client data is securely encrypted and available as long as you have an internet enabled device – whether you are are in the office, working from your kitchen table or out at a customer meeting.
Finances in real-time
With cloud accounting you always have a completely up to date view of your clients’ financial information. As opposed to going through pages of out of date reports, you get to look at their finances in real-time. As their accountant you are able to provide more tailored reports based on their present financial situation. It’s easier to alert them to insights and positions you as a strategic partner when it comes to making informed decisions for future business planning.
Collaboration and sharing
Traditional accounting software only gives you a restricted and/or limited access to your accounts meaning that collaborating or sharing information with your colleagues or even clients is hard work! To share information it’s necessary to manually upload client data to an email or a USB.
The cloud based solutions streamline the traditional process of back and forth communication by making it easier to share consistent and up to date information with clients or colleagues.The multi-user feature of cloud accounting allows you to give different people access to financial records. You can grant remote access to anyone you deem fit, regardless of where they are in the world.
Cloud accounting demands less maintenance than a traditional system. The cloud solution provider consistently updates and improves the platform without you having to do anything. It is up to the service provider to ensure that their platform is highly reliable and in-line to changes in practices or legislation that may affect your business.
Cloud accounting software can seamlessly connect and integrate with apps – allowing software such as Fluidly to use your existing data to create real-time cashflow forecasts without any complex financial models.