If your business still does its accounting with desktop software or spreadsheets, it might be time to switch to a cloud-based accounting system.
Cloud-based software has many advantages over on-premises solutions, such as letting users work from anywhere, at any time, automating time-consuming manual processes, improving accuracy and compliance, and speeding up financial close processes with less work.
Depending on the software, companies can get other benefits like more predictable software costs, less money spent on hardware, less IT overhead, better disaster recovery, more sophisticated threat, and security monitoring, higher levels of availability, better performance, and the ability to grow.
12 Things You Should Know About Cloud Accounting
Any cloud-based system has a number of benefits, such as making sure that authorized users can access up-to-date, accurate financial information from home or while traveling. Some systems also have more advanced features, such as the ability to automate accounting processes in a sophisticated way.
1. Less paperwork: With cloud accounting software, business owners don’t have to deal with time-consuming tasks like software installation, backups, and other paperwork. This is because the software is accessed over the Internet. To run your accounting software, you don’t need to buy or manage servers or other IT infrastructure. You don’t have to back up your important financial data regularly because your accounting provider does that for you automatically. When people spend less time on administration, they have more time to work on things that will help your business grow.
2. Updated Software: Since the software is in the cloud, you always have the most recent version. The accounting software is automatically updated by the cloud provider when tax rates or accounting rules change. New features are also added.
3. Automation: Accounting platforms in the cloud automate many accounting and banking tasks, reducing the amount of work that needs to be done by hand. For example, the software can automatically import bank and credit card transactions, make recurring invoices, schedule reports, pay subscriptions, and post transactions to the right ledger. It can automatically figure out discounts and taxes, and if invoices don’t match purchase orders, it can flag those cases. Some cloud accounting software is especially useful for making sales in other countries because it can automatically figure out the taxes for many different countries.
4. Ease of compliance: Cloud accounting platforms help both private and public companies meet tax requirements by making accurate financial statements, quarterly tax estimates, and yearly tax returns. This keeps business owners from underreporting their tax liability, which could lead to audits or fines, or overreporting and paying too much. Cloud platforms also help make sure that all tax rules are followed by automating both domestic and international tax calculations. Some of the best cloud accounting services even automate the way that revenue is recognized so that they can meet accounting standards.
5. Paper-free/eco-friendly: In traditional accounting, there is often a lot of paperwork to do. In today’s digital world, it’s both inefficient and unnecessary to store paper records in a physical archive or send paper reports to investors, lenders, and other parties by hand. Ask vendors to send invoices electronically so that they can be imported directly into the cloud accounting system. Scanning paper bills and receipts for processing can help clear up the office. Sending invoices to clients by email saves you money on printing and postage and speeds up the time it takes to get paid. By using less paper, you also have less of an effect on the environment: Every year, the average office employee throws away 350 pounds of paper, and 375 million printer cartridges are burned or put in landfills. Reducing the amount of energy used by servers and hardware has an even bigger effect.
6. Scalability: As a business grows, it becomes hard to keep track of finances with spreadsheets, and desktop accounting systems usually have limited features, which can slow a growing business down. Comprehensive cloud-based accounting software can grow and change to meet the needs of your business. You can start with basic accounting functions and add features and users as your business grows.
7. Accuracy: Cloud-based accounting software is more accurate than spreadsheets because it gets rid of many of the manual steps that can lead to mistakes. In addition to automatically putting transactions into categories and figuring out taxes, cloud software can match received invoices to payments and shipments. It can also automate reconciliation processes by matching internal transactions to bank records and flagging errors.
8. Customization: Because every business is different, it makes sense to choose cloud accounting software that can be changed to fit your company’s needs. Some cloud accounting solutions let you change the way processes and workflows work so that they work better for your business. You can make customized dashboards that show each user their most important metrics and other information at a glance. You can also add the company’s logo and terms that are unique to the company.
9. Accessibility: Unlike old-fashioned desktop accounting software, cloud-based systems don’t limit you to your office. With online accounting software, users are allowed to log in from anywhere, anytime, using a web browser or a mobile app. Because all data is stored in the same cloud-based system, it’s easier for employees who work from home or on the road to share electronic documents. To use true cloud software, you also don’t need to buy extra software like Citrix or VPN.
10. Real-time reporting and data visualization: When a business uses spreadsheets or paper-based accounting systems, it’s hard to get a quick, accurate, and up-to-date picture of how the business is doing. This problem can be solved by cloud accounting systems that give users real-time access to centralized financial data. Users don’t have to wait for historical reports that are weeks or months out of date. Instead, they can always see how the company’s finances are doing right now. Dashboards and other built-in analytics tools turn complicated data into charts and key performance indicators that are easy to understand. Visualizing data gives the team new ideas and makes it easy to spot business-impacting trends. It also costs a lot less with cloud software.
11. Collaboration: Since all of the financial information is stored online in a single database, it is easier for team members to work together. There’s no need to keep track of different versions of the same file or copy information onto thumb drives to give it to other people. As long as they have the internet, employees can work together from anywhere. This can speed up the time it takes to close the books and make other tasks, like forecasting, easier.
12. Efficiency: Automated accounting processes, real-time access to accurate information, and less paperwork all add up to a more efficient accounting function, which helps the business as a whole be more efficient. Your staff will spend a lot less time manually entering and checking data, and because the system is more accurate and has built-in controls, they will spend less time looking for problems like invoices that don’t match up. Because of automation and more accurate data, staff members don’t have to rush to combine data from different systems in order to meet deadlines. And because everyone in the company has access to accurate, up-to-date financial data, they can all use it to make decisions that improve business performance.
CONCLUSION
By utilizing cloud accounting, businesses can streamline their financial management processes, increase efficiency, and make more informed business decisions.
If you’re looking to take advantage of cloud accounting for your business, Xcel Accounting Services can help. Our team of experts can provide comprehensive cloud accounting solutions that meet the unique needs of your business.
Contact us today to learn more about our cloud accounting services and how we can help your business succeed.
