And why you will be glad you adopted it.
Cloud accounting software is similar to traditional, desktop-based solutions, with the difference being that it is hosted on remote servers. Data is sent into the “cloud” where it is processed and stored. The benefits to the end-user include access to real-time data from anywhere with an Internet connection, and from any device – laptops, smartphones, and tablets. Employees have greater visibility within an organization and can collaborate more effectively. And for business owners, peace of mind comes from knowing that routine maintenance and updates to the software are managed by the SaaS (Software as a Service) provider.
Cloud accounting solutions are often subscription-based, and customers can upgrade their monthly or annual plans to meet the growing needs of a business. This pricing model is similar to popular consumer SaaS providers such as Netflix, Google Apps, and Dropbox. Not requiring a long-term commitment is another strong reason to consider cloud solutions. There are no contracts to lock you in with a specific vendor or cloud accounting technology.
According to Intuit’s e-book “The Appification of Small Business”, it is estimated that 78 percent of small businesses will rely on cloud technology by 2020. This makes sense when you consider that under the SaaS business model, providers are incentivized to innovate and provide great customer service–all at a competitive price.
The Benefits of Cloud Accounting
For new businesses, starting fresh with a cloud solution is easy as signing up. Established businesses, however, will need to plan ahead for migration to ensure that critical data is kept intact and everything continues running smoothly. Fortunately, major cloud accounting providers such as QuickBooks Online allow seamless transition from older, traditional desktop-based solutions. Many business owners who migrated to cloud accounting technology have reported cost savings and greater efficiencies in day-to-day operations.
Here are the top benefits to consider when researching cloud accounting solutions:
1. Safe storage of financial data
Cloud accounting technology can provide a more secure method of storing financial information than desktop-based software. Data is routinely backed up to servers in multiple locations by the SaaS provider, and there are no physical hard drives or computers containing sensitive data that can be stolen. Since financial information isn’t kept on-premise, the risks of fires and natural disasters are also mitigated.
2. Sync data automatically
Cloud accounting software does the heavy lifting so you can spend your time on other important business tasks. Automatically sync your bank accounts so you don’t have to manually import transactions or verify expenses. If 84 percent of businesses using cloud software are cutting their application costs — it’s a good indicator that with the adoption of online accounting, you can too.
3. Pay as you grow
Small businesses often experience growing pains, which makes choosing software with future growth in mind a priority for many. Cloud accounting software allows businesses to purchase what they need and increase their spending as they grow. This includes adding more storage space, users, and more advanced features.
4. Multi-user access
Once you reach a point where your business is looking to outsource specific tasks, using cloud accounting can help scale in a cost-effective and controlled manner. The multi-user feature of cloud accounting means you can give different people access to your financial records and bookkeeping process, which they can access remotely. This streamlines workflow and allows you to ask your advisor or accountant questions directly, all based on the most up-to-date versions of documents. The multi-user feature makes for quick communication, team collaboration and less back and forth.
5. Data accuracy
Cloud accounting programs promote accuracy by streamlining the data-importing process and eliminating double-entry mistakes or other human errors that might occur. TechRepublic praises Saas-based accounting systems citing the “built-in controls that automate the identification of duplicate entries, and prevent other errors.”
6. Prevent unauthorized access
The same way you don’t want strangers accessing your pictures or your Google documents, unauthorized users in your accounting software is even more disheartening and even dangerous. Login credentials for your cloud accounting software enable only designated people to view and access your financial information. Data is completely private and protected.
7. Minimal downtime
As with any online or desktop software, periodic security upgrades and software updates are essential to keep programs running smoothly. Cloud accounting software is no different. You will experience some — though minimal — downtime for such updates, but will be alerted ahead of time.