Cloud Accounting describes the use of accounting software hosted in the cloud. Unlike traditional programs that you can install on a computer, you access cloud-based programs remotely via the internet. The company that owns the software carries out the functions of these programs, meaning users don’t have to maintain the program themselves.
We live in an increasingly cloud-based world. So much so, we now distinguish businesses that are ‘cloud-native’ (initially developed for remote access) from those that have undergone ‘cloud migration’ (transitioned the mainframe to ‘the cloud’).
Bookkeeping services first became available on the cloud around 1998, with the founding of American computing company NetSuite. Back then, only large businesses could afford cloud accounting. Today, with the service being more accessible and affordable, it’s become the top choice for many companies both big and small.
Businesses choose cloud accounting for many reasons. As mentioned earlier, the fact that its functions are remote means that companies don’t have to maintain it themselves. Not only does this save trouble if problems arise, but also it reduces the need for in-house IT support. Ultimately, it saves money.
So what are the other benefits of cloud bookkeeping?
It Reduces Paper Waste — and Cost
With the environment under more strain than ever, companies are keen to reduce the amount of physical waste they produce. Gone are the days of filing cabinets—today’s businesses can store their accounts securely in remote, digital locations
This remote storage saves enormous amounts of paper, which is better for the planet and business. After all, stacks of paper aren’t just annoying to house—they also pose a significant fire risk. Plus, the storage required for physical records often entails leasing more extensive facilities or off-site storage solutions, both of which add to the overhead.
Cloud accounting cuts back on paper usage, which reduces your costs, and your environmental impact.
It’s More Secure Than Your Hard Drive
When you use a self-installed accounting program, your details are in the memory on your device’s hard drive. You might imagine that this is more secure than the cloud—but that is not necessarily the case.
Yes, access to the cloud happens via the internet, which may seem susceptible to hacking, malware, and the like. However, it’s also one of the most secure places for sensitive information.
Companies that own the software implement robust security protocols and run scans continuously, which is probably more than you can say for your hard drive.
Enhanced security comes with improved accessibility. You can access cloud accounting services from any device, at any time, as long as you have a valid password and login.
It Fosters Remote Collaboration
As remote working becomes the new norm, cloud-based software ensures all employees can access the same programs, regardless of where they are. Most cloud bookkeeping applications are under the purview of a managing admin, such as the CFO, who can then control who else has access. Users can then gain access via a simple link, as opposed to an email file or USB stick. It enables improved security, active collaboration, and real-time data updates.
Cloud accounting is the smart choice for any business keen to reduce waste, foster collaboration, and enhance security.
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