Businesses across the world are migrating from physical servers to the cloud for its convenience, cost-effectiveness, security, and a whole bouquet of other advantages. For the most part, these benefits are also present in cloud accounting software. In fact, cloud accounting software has the potential to make businesses more successful by the tools that it puts into the hands of users.
Cloud accounting software scores over on-premise software on several points:
Safe and secure data
On-premise data can be lost in accidents or natural disasters and is comparatively seen as more susceptible to hacking and spyware. Not to mention that it is fairly easy to hijack a colleague’s laptop once you are a trusted entity in the system. Cloud accounting software ensures data is safe because being intangible and online it cannot be physically destroyed. Security is achieved by a firewall – and sometimes double firewall – protection.
There is also no requirement for maintaining backups and multiple copies as the data is stored for a fairly long period on the cloud, although this might vary between software providers. For example, Dext stores your data for 7 years.
Most cloud accounting software comes with the option to launch a client dashboard. It is very easy to send an invite to your client to start using their dashboard. You can even co-brand the dashboard so that the client sees your brand as soon as they log in.
Invoices can be standardised and automated, which gives your brand the same look and feel as large brands that boast standardisation in little things like invoicing. Moreover, a lot of cloud accounting software options will give you updates for when a client accesses your invoice (like a read receipt) and when they pay off dues. Very importantly, cloud accounting software notifies you when payment becomes overdue.
Cloud accounting software, or at least some of them, lets you scan receipts using your smartphone camera. The data is then run through optical character recognition software which extracts the words and numbers from the text to make an entry that integrates into the overall books and can also be sent forward as an expense claim.
This process can also be replicated for data in emails, online, or bank statements.
Data also flows directly from your bank account to your books of accounts, saving your accountant’s time. Payroll takes up plenty of your accountant’s time and perhaps some of the business owner’s time as well. Cloud accounting software uses automation to calculate employee salary minus any deductions, plus any reimbursements and it also gives you readymade payslips.
Avant-Garde smart reporting tools allow you to prepare and file your tax returns on time, with much less hassle. Also, suppliers are already sorted according to tax and this too goes a long way in making your tax work fast less time-consuming not to mention, less tedious.
Eliminates human error
Duplicate entries, mistaken deletions, and data entry errors can wreak havoc with your books of accounts. However, the optical character recognition tech that we talked about earlier, completely automates the data entry process, and as a result, there are fewer errors. If the system “misunderstands” any text or figures in a bill or receipt or invoice, the user has the option to edit the entry. Also, the original image or document is saved along with the entry should anyone want to double-check.
In sync with the remote working trend
Even before the pandemic came along and ushered in the “new normal” of mostly online meetings and remote workplaces, people were already embracing remote working and remote assignments. Platforms like Upwork and Fiverr existed and thrived on remote working partnerships and gigs long before lockdowns made remote working mandatory. Doesn’t it make sense that a few responsible stakeholders such as the company boss, the accountant, and the top management are able to collaborate on the company’s books remotely? Cloud accounting software makes this possible – in fact, this is probably one of the most compelling reasons for businesses to invest in it during this time.
Live, on-the-go reporting, books, and insights
Today’s fast-paced business environment is likely to run over businesses that are slow to react. However, how can you react quickly when you’re relying on last month’s financial data. Things change rapidly in today’s business landscape. You cannot work out of yesterday’s figures; you need to access your company’s financial data as of now. Since cloud accounting software places data online, you can enjoy access to completely up-to-date books of accounts (updated with transactions from your bank account) anytime and anywhere via your smartphone.
You also receive regular and easy-to-understand insights from all the data running through the software.
All of this contributes to your ability to make sound, informed decisions.
A universe of benefits awaits businesses of all sizes when they switch to cloud accounting. Remember that you don’t need to shell out as much as a large corporation would – the best cloud accounting software options are scalable, to begin with.