If you’re running a small business, you may have heard some buzz regarding cloud accounting. You’re probably wondering what is cloud accounting, and why do I need it. According to Xero.com with cloud accounting, your accounting software is available on the Internet as opposed to being stored locally on your computer. Cloud accounting software is similar to online banking. Whenever, you look at your bank statements or transfer money online, you’re interacting with the cloud. Traditional accounting software is inefficient because the data is only stored in one place and is not accessible from multiple devices. It’s also expensive to back this data up. Cloud Accounting offers several benefits over traditional accounting software. Here are five reasons why you need to adopt cloud accounting for your small business.
- Exchange Documents Freely: Cloud based accounting systems allow you to easily exchange documents among your colleagues. According to KashFlow instead of sending documents by email, you just upload your accounting files. Then, your “clients are automatically alerted that their documents are ready.” Moreover, this minimizes the need for tasks associated with double entry bookkeeping like filing VAT returns. It also frees up time usually spent gaining approvals as clients can electronically approve documents.
- Security: Cloud based accounting system offer unparalleled security. You don’t want anyone else to have access to sensitive company information like balance sheets or ledgers. With a traditional accounting system, your security is only as secure as your physical office. This data is vulnerable to attacks by spam, phishing, viruses and malware. Since all the data is physically stored on a computer, you could lose it if the computer is damaged in a fire or flood. With a cloud based system, as long as you have a secure password protecting your data, you won’t have to worry about it being compromised.
- Access Your Documents from any Location: You’ll no longer need to travel with your laptop just in case you need to access an accounting document. With cloud based accounting software, you’ll be able to access your documents from any location. You’ll also be able to log into your cloud based software from any Internet enabled device like a smart phone or tablet.
- Independence: When you use a desktop system to manage your accounts, you are completely dependent on your operating system. For example, consider how dependent QuickBooks Desktop is on Internet Explorer and the problems it has with PDF drivers in Windows 8. According to Accountex Report, cloud based accounting systems don’t have any of these problems. You can simply access them through an Internet enabled device of your choice and go to work regardless of the hardware you’re using.
- Automatic Upgrades: You won’t have to worry about installing or upgrading your software. According to the Talented Ladies Club, all changes and improvements automatically take place online. The upgrades are included in your monthly fee. This will save you money in the long run as you won’t need to buy and install new software every time a new version comes out.
- Your Data is Backed Up: A cloud based accounting service ensures that your data is backed up. According to Jonathan VowlesCharted Accountants, the “backup and disaster recovery offered by a software-as-a-service supplier greatly exceeds the level which a company can provide if the application is housed on-site.” Your cloud based accounting service should backup all your data for you, and it should be included in your normal subscription price.
Cloud based accounting services are more secure and convenient than traditional desktop based accounting programs. Since your documents are stored on the cloud, you’ll be able to access them anywhere. If you’d like to learn more about the benefits of cloud accounting, contact us.