Cloud-based accounting software is undoubtedly a step change in how businesses account for their financial transactions, track progress, performance and cash flow, and share that same data with their accountants and advisers.
In a business environment where companies increasingly rely on cloud accounting solutions to support hybrid and remote work structures or colleagues working in varied locations, it is essential to consider the impacts of cloud accounting on management oversight to extract full value from the functionalities available.
Here we’ll explain the many advantages of cloud-based accounting software, how it slots into the reporting framework of businesses today, and why it may be a fundamental requirement for success in the future.
Cloud-Based Accounting Solutions Explained
Cloud-based software resolves many challenges linked with manual data entry and desktop-based processes. This fast-evolving technology makes it significantly easier for professional accountants to communicate with their clients, retrieve real-time and instant-access information, and provide insights to ensure businesses harness opportunities and identify risks.
As an overview, cloud technology uses remote servers to run software applications and store data – rather than a hard drive or external storage device connected to a PC.
A remote server then works as an accessible point of reference, where colleagues, bookkeepers and accountants can access the same version of reports and bank reconciliations from any location using password-protected logins to maintain data security.
One added benefit, especially for small business owners and self-employed professionals, is that there is no need to invest in new hardware, employ additional IT staff or change bank accounts. Secure servers work autonomously and with high degrees of protection, with a straightforward monthly subscription that covers automated updates and software upgrades.
Integrating with online banking ensures that cash flow reconciliations are almost instantaneous, with various interoperability options to sync cloud-based accounting software with other apps, such as a salesforce platform used by colleagues in the field.
How Has Cloud Accounting Software Improved Accounting Services?
Conventionally, financial data was submitted manually from a business to their accountant or bookkeeper – advancing to digital financial reporting and email communications in recent years.
The introduction of online accounting software has quickly affected that stream of information, where accountants can access live bank fees and financial information, helping them save time across the board in providing advisory support and analytics.
Whereas traditional accounting software was desktop-based and relied on a bookkeeper to make manual calculations when dealing with double-entry bookkeeping and transactions involving multiple currencies, today’s cloud accounting software can handle these basic tasks automatically.
From a business perspective, the key themes are added functionality and advanced efficiencies to ensure all the data important to the organisation is stored, organised and logged appropriately – with no exposure to human error.
Cloud accounting providers have the versatility to improve performance and data visibility for organisations of every size, from small businesses to large enterprises, and ensure that financial information can be accessed from anywhere with an internet connection.
Should the business be impacted by a fire or natural disaster, all business-critical records would remain safely stored in the cloud, mitigating the impacts of losses and enhancing business continuity planning.
What Are the Primary Business Benefits of Cloud Accounting Software?
Any business that decides to use cloud accounting software can eliminate time-consuming processes, transition their general ledger to an integrated system and improve how financial information is shared, analysed and used to make informed decisions.
The impacts from the viewpoint of an accountancy professional are dramatic, ensuring every minor element of bookkeeping, such as performing a bank reconciliation automatically without any need to wait until month-end to receive bank statements, is expedited, more accurate and feeds into meaningful financial data.
Let’s look at some of the many benefits of cloud accounting software and why it is a pivotal development in helping businesses make prompt judgements about how to react to trends, economics and threats while harnessing the expertise of their accounting providers by removing the previously limited access to financial reporting information.
On-Demand Financial Management
Cloud accounting software supersedes the conventional lags in providing real-time reporting – accountants can use online software to gain secure access to accounts for small business and enterprise clients and use cloud accounting software to extract important metrics.
Previously, accountants may have relied on internal colleagues to respond to accounting needs by preparing a report and circulating it to relevant recipients. Now, cloud solutions mean anybody with approved access can appraise bank data or reports on business processes to provide feedback to senior management.
Improved Business Data Security
Security is an essential aspect of cloud computing, particularly as legislation and regulations around data protection become more prevalent. Cloud providers offer the assurance that any natural disaster or cybersecurity issue will be circumvented by secure servers, ensuring information around accounts receivable and payable, balance sheets and recorded performance remain safely stored in your accounting software.
Reputable cloud software providers deploy various techniques, from zero-trust architecture to multi-authentication connection requirements, to safeguard information from unapproved access, removing data loss vulnerabilities.
Simplified Information Sharing With Accountants
Accounting software is designed for use by both small business owners, in-house accountants and external financial advisers, all of whom access cloud accounting software to assess performance and figures, prepare reports and recommendations, and access the latest metrics to inform their tasks, such as submitting tax declarations and inventory valuations.
Cloud-based accounting software provides the tools necessary to assist with management accounting, payroll processing, budgetary forecasts and data analytics any time and from any location, making real-time reporting viable.
Instead of reacting once a crisis emerges and identifies a significant issue or variance, this level of oversight ensures that accomplished accountants are on hand every step of the way, using your online accounting software to complete tasks but also deep dive your figures to provide the benefit of their expertise – when it matters most.
For more information about the benefits of a cloud accounting system for your business or to request our recommendations about the best online accounting software for your organisation, please contact the James Todd & Co team.