What is Cloud Accounting?

Cloud accounting is much like traditional self-accounting tools without the requirement to do your own on-site functions. If you’re assessing all of your software options for your business, it’s crucial that you understand the difference between hiring an accountant and using self-accounting software first. After you’ve assessed the pros and cons of this and you’re comfortable with entering your own financial data into the program, you can then educate yourself on each of the programs and the features they offer their users. Here’s a breakdown of what a cloud-based program offers you.

Resource: Top 10 Online Accounting Degree Programs

How Does Cloud-Based Accounting Work?

When you picture a traditional on-site accounting software program, you visualize yourself practically handling your own books and drafting your own financial reports. The infrastructure of a cloud-based accounting solution is very similar to this, with one major difference. All of the data entry functions are performed on-site via the software system. The key difference is that once the data is entered into the cloud, the application functions are performed in the cloud and then returned to the user.

Less Maintenance Than Traditional Programs

It’s very common for a cloud accounting software provider to offer the same subscription-based option to its customers. You would pay for either the monthly subscription or for usage, much like you would if you had a traditional program. One major difference would be that your off-site premises solution wouldn’t require nearly as much maintenance.

You don’t have to purchase expensive equipment because all of the data is stored virtually in the cloud. Another great feature is that all of your data that’s stored there will be completely backed up by your provider so that you don’t need network-based hard drives or an IT expert to service the network. Since the system updates automatically, you don’t have to take on a new solution that in reality acts as a problem that requires constant attention.

Accessing Accounting Information Anywhere

One of the biggest advantages of cloud solution programs is that they are the most flexible option around. If you have offices all over the city, country or globe, the information can be accessed from any other device that can be connected to the Internet as long as you have the account password. This means that you don’t have to decide where you want to install the program and how many licenses you want to buy just so that you have seamless access to accounting information.

Since the software is updated in real-time, the whole team, regardless of their location, can see financial information and reporting immediately. This also includes account balances in multiple difference currencies with less opportunity for errors and less manual data entry. It’s an efficient quality that you won’t enjoy with other traditional solutions programs or when you outsource your accounting functions.

Small businesses are relying on cloud-based accounting programs more than ever. It’s estimated that about 78 percent will be implementing these advanced programs by 2020. It’s hard to deny all of the benefits that cloud technology has to offer in computing. One specific application is how it relates to accounting functions and applications. If you’re looking for a way to improve efficiency while still lowering your expenses, you should consider what cloud accounting can do for your small business.