Accounting through Cloud Computing

Cloud accounting software is similar to traditional, on-premises, or self-install accounting software, only the accounting software is hosted on remote servers, similar to the SaaS (Software as a Service) business model. Data is sent into “The cloud,” where it is processed and returned to the user.

All application functions are performed off-site, not on the user’s desktop. In cloud computing, users access software applications remotely through the Internet or other network via a cloud application service provider.

Using cloud accounting software frees the business from having to install and maintain software on individual desktop computers.

Cloud accounting software

Cloud accounting (or online accounting) has all the same functionality as desktop accounting, but moves the whole process to the cloud and expands upon it. There’s no desktop application you log in to an always-up-to-date online solution and all data is safely stored on a cloud server. Most cloud platforms will also have an open API, which basically means third party software can connect with your system to provide even further value to you as a business owner.

Cloud accounting solutions also allow employees in other departments, remote or branch offices to access the same data and the same version of the software.

Benefits of Cloud Accounting

Secure sharing of data

When you’re working with your accountant, bank or other advisers, you can easily grant access to your accounts with cloud accounting software. There’s no need for USB memory sticks or sending emails back and forth. Your advisers have safe and secure access to all your financial information, in real time. This is quicker, safer and gives your advisers the information needed to support and advise you, going forward.

Seamless backups and updates

Time consuming daily backups are a drain on your staff’s time and patience! On the cloud platform, manual backups are a thing of the past. The software does it for you in real-time.

Not only does this mean that your risk of data-loss is minimised, but it also means that you can rest assured that everyone’s working from the same file version. File updates made by Sarah in her Sydney home office are instantly applied, saved, and accessible to all stakeholders across the world.

Always working with the latest software version

When you log in to your accounting platform in the cloud, you’re always using the latest version of the software. There’s no need for time-consuming and costly updates you just sign in and start working. Plus, you don’t have to be responsible for applying security fixes your software provider will handle that for you automatically.

Live bank feeds

Many cloud accounting platforms offer live feeds to your bank accounts, giving you the ability to link your banking directly with your accounting. Instead of manually keying-in each bank statement line, or uploading a .CSV file that you’ve downloaded from your internet banking portal, a live feed pulls your bank data straight through into your accounts. These speeds up bank reconciliation and gives you a more accurate view of your bank balance.

Access your accounts anywhere

Cloud accounting gives you access to your key business numbers 24/7, from any location where you can access the internet, removing the need to work from one central office-based computer. Log in via a web browser from your laptop, or use your provider’s mobile app to access your accounts from your phone or tablet.

Access to the app ecosystem

Open APIs mean you can add a range of third-party apps and tools to expand your core business system. There are cash flow forecasting apps, online invoicing apps, industry-specific project management tools and a host of other practical solutions to choose from. These tools enable you to further save time, reduce resourcing costs, identify problems further in advance, and generally ease the pain of unnecessary admin that’s weighing you down.

Access to real-time information

By keeping your bookkeeping and bank reconciliation up to date, you can achieve real-time reporting. Instead of looking at historical reports that are days, weeks, or even months out of date, you have an instant overview of the company’s current financial position. This real-time overview is vital when looking at your cash position, planning future spending and when making big financial and strategic decisions as a management team.

Limitations/Disadvantages:

Data security. This is extremely important so you need to be confident that your provider adheres to high standards. In addition, you need strong discipline around things like controlling access so that when staff leave, for example, their logins to your system are removed.

Internet/Broadband speed. Cloud-based accounting requires a good Internet connection otherwise slow speeds could impact efficiency and/or you could be affected by outages.

GDPR. Again, this is very important especially if the solution provider that you choose could involve having to transfer data out of the EU.

Vendor lock in. Some clients worry about this in case they may need to switch to an alternative solution provider in future.

Brexit. We don’t yet know what future arrangements will be in place around data and digital services.

Lack of customisation. This is usually more of a concern for large organisations with legacy systems.