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What Is Cloud Accounting And Is It Beneficial To My Business?

24 Mar by Coffey & Co

Businesses relied on paper ledgers and essential tools for their accounting needs in the past. Then technology came by and revolutionised the accounting industry. It forever changed how accountants do their jobs as accounting software made work easy. Technological advancements saw the rise of cloud-based accounting systems that offered flexibility, capital expenditure reduction, and the opportunity to maximise human resources.

Cloud accounting has gained widespread adoption. This is because of the many benefits it offers to businesses. But before we look at the benefits of cloud accounting to your business, let’s define what cloud accounting is.

What is Cloud Accounting?

Cloud accounting refers to using an accounting system accessible through the Internet. It encompasses performing several accounting functions using cloud-based accounting software. These include managing the general ledger, accounts payable, and accounts receivable, among other functions.

Cloud accounting uses the same concept as cloud computing, which means storing and accessing data and programs over the Internet instead of your computer’s hard drive. Cloud accounting is often delivered as a software-as-a-service (SaaS) platform. Unlike on-premise software solutions, cloud accounting software doesn’t require an accountant to be physically present at a certain location to perform their duties.

Benefits of Cloud Accounting to Your Business

Moving from on-premise accounting solutions to a cloud-based one can be a massive leap for your business. It is a worthy investment that you should undertake. Some of the benefits of cloud accounting include:

  • Automation: Cloud accounting software gives you the option of connecting your bank accounts to the system. This automates transaction posting, account reconciliations, vendor payments, and sending invoices to customers. Cloud accounting eliminates monotonous and time-consuming data entry tasks, freeing your accountants to engage in more productive work. 
  • Accessibility: Cloud accounting systems are also easily accessible. Your accountants and partners do not have to be physically present on your premises to complete tasks. They can even access data through their mobile devices. 
  • Data Security: Financial information is sensitive business data that should never get into the wrong hands. Putting such data on hard drives and on-premise servers that unauthorised personnel can easily access is a security threat. Cloud accounting enables you only to grant access to authorised personnel. It also eliminates the risk of losing data during disasters such as fires. 
  • Scalability: You need an accounting solution that quickly scales according to your business needs. With cloud accounting, you won’t need to worry about purchasing new hardware or making other adjustments to your server as the business grows. You also won’t have to worry about server migration if you decide to move to a new business location. You can predict and budget for cloud accounting costs.
  • Lower Overhead Costs: You will spend less on a cloud accounting system than a business that opts for on-premise accounting. You won’t have to worry about hardware costs, regular server maintenance, and a large IT staff to manage the system. 

Cloud accounting systems are also easier and faster to implement. Additionally, it improves collaboration between authorised users to share data and information in real-time.

Work Smarter With Reliable Cloud Accounting Services

The cloud is the future. If you are not already started on cloud accounting, this is the time to make the shift from your on-premise accounting solution. We can also help if you’re looking to upgrade to a better and more robust cloud accounting system.

Xero is one of the best cloud accounting systems in the market. It’s suitable for large enterprises and small and medium enterprises. It is easy to use, accessible, secure and offers numerous third-party business system integrations. Let us help you implement a system that will grow your business.

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