The era of SaaS started long ago. It’s hard to find a service industry that is not moving to the cloud from old-fashioned desktop solutions. Accounting is no exception. To be honest, cloud accounting benefits are rather obvious and similar to the benefits of any cloud solution in any industry.
Well, since you are reading this, you must have been searching for the article to show your boss to persuade them to finally switch to the cloud solution. We’ve got you covered. We even structured this article to separately show the benefits vs. desktop software and spreadsheets.
Cloud Accounting Benefits vs. Desktop Software Solutions
Cloud accounting software makes it easy for business owners to get rid of the tedious task of installing software and backing up data. You can access the software via the internet. Cloud accounting software doesn’t require you to purchase or manage servers or any other IT infrastructure. Your accounting provider will automatically back up your financial data, and you don’t need to do any backups. Staff can spend less time managing the business and more time doing productive tasks to grow it.
Software is always up-to-date: it is stored in the cloud, so you always have the latest version. Cloud providers automatically update the accounting software to reflect changes in tax rates, accounting rules, and add new features. The cloud provider will automatically update your software, so you don’t need to worry about it.
Cloud-based accounting software is more flexible than traditional desktop software. Online accounting software allows authorized users to log in from anywhere, anytime, via a web browser or mobile app. They can review reports, manage accounts, approve payments and send invoices from anywhere without needing to be back at work. The accounting team is always connected to the latest financial information and real-time analytics. It’s easy to share electronic documents between staff members working from home or abroad because all data is stored in one cloud-based system.
Cloud-based means that your records and accounts are automatically saved and protected with military encryption. Your data is not stored on any physical server at the office or on your laptop’s hard drive. All of your accounting information is protected at the source and stored in the cloud. Your confidential information can only be accessed by you and a few members of your team or advisers.
Cloud accounting can help you achieve your dream of a paperless office. Traditional accounting can slow down your business by having to deal with paperwork, data entry, and financial administration. It is necessary to print everything and deal with it in hard copy. This can be slow, inefficient, and harmful to the environment.
An online accounting system can help you reduce the amount of paperwork that you need to keep track of. Clients can email their invoices directly, eliminating the need to print and postage and expediting the payment process. You can scan receipts and bills to be saved with any associated transactions in your accounting program.
Your documents can be digitized and stored in a cloud, so you don’t need to store them physically. This saves space and storage costs.
Cloud accounting systems are flexible and can scale to meet growing business needs. No need to plan for a painful transition to a more sophisticated solution as your business grows and your demands change. You can adapt the system to meet your specific business needs by integrating it with other software and add-ons.
Cloud accounting is ideal for entrepreneurs, startups, and small businesses. Cloud accounting does not require any upfront investment in hardware, software, or dedicated staff. It takes only a few steps to set up your accounts and upload your financial information. You can also learn how to use the software online with tutorials and videos.
A cloud service will cost you a monthly fee but that can be at least 10 times cheaper than its desktop analog. However, considering that it allows you to use less electricity and do not hire IT workers, as well as not requiring the investment of resources to set up and maintain servers at your office, the cloud is quickly becoming the most affordable option. You won’t be charged for any annual maintenance or upgrades.
Cloud Accounting Benefits vs. Spreadsheets
It can be difficult for business managers to quickly and accurately assess business performance if they use spreadsheets or paper-based processes. Leaders may fail to spot problems early enough to avoid them becoming bigger. This can be solved by real-time cloud accounting systems. Instead of waiting for outdated reports that may be weeks or months old, inconsistent as no one places them all together every minute to make sure it matches with one another, cloud accounting systems provide users with a current view of the company’s financial situation. Dashboards and other analytics tools convert complex data into easily-understood charts and key performance indicators. Visualizing data enables the team to quickly gain insight and identify trends that could impact the business. And last but not least, double-entry in the cloud accounting system ensures the completeness of your information and that the dots are linked.
Automated banking and reconciliation
This is where cloud accounting really shines. Automate bank transactions by linking your bank accounts and your accounting software. This saves time on the manual upload of bank statements and reduces the chance of errors. Moreover, it provides the owner or other users with real-time bank balance. The reconciliation process is simply a great benefit of such automation as it helps you or your accountant to reconcile bank entries within a very short period of time, I even would say within a second if you follow the flow. To be honest, there is also a chance you have your bank transactions already posted in the system the moment you connect your bank account. Curious? We know the name of the system that does that for you.
The efficiency of your accounting functions is improved by automation, real-time access, and lower administration. This helps to boost the overall efficiency of your business. Staff will spend less time entering and verifying data. Additionally, they will be able to track down problems more efficiently thanks to built-in controls and greater accuracy. Staff members won’t need to rush to combine data from different systems to meet deadlines. Because accurate and up-to-date financial information is available across the organization, everyone can access it to make business decisions that will improve their performance.
Cloud accounting software is a well-structured and reliable database. It is built in a way that allows you to use worldwide accepted business processes and automate almost all functions. This reduces human error and increases efficiency.
Bank feeds give you the assurance that all transactions through your bank account are displayed and entered in cloud accounting books. This ensures that there is no missing information or any additions that have not actually occurred unless you removed the system entry manually and failed to reconcile the bank balance.
Single source of truth
Cloud accounting systems store all financial data in one database so that everyone within the organization can work from the exact same information. No more wasted time trying to find the correct version of a spreadsheet. Consistency across all financial reports is assured by a single authoritative, central data set.