Cloud accounting involves the use of an online system which is accessed remotely via the internet. Some of the key purposes of cloud accounting are the same as traditional or on-site desktop accounting systems; the software is used to carry out core accounting functions like accounts payable and receivable and invoices. However, cloud accounting software also often allows more complex tasks to be performed, for example the automatic production of smart reports.
The basis of a cloud accounting system is an online system, hosted remotely on the cloud and accessed via the internet. You’re able to use the system from anywhere in the world, as long as you have an internet connection. The software allows you to carry out basic accounting tasks like bookkeeping and managing accounts payable and receivable. More advanced systems also provide a wider range of accounting functions. The financial data is stored remotely in the cloud rather than on the hard drive of a particular computer.
Cloud and traditional accounting softwares are intended to serve the same essential purpose, but they operate in very different ways. Some of the key differences between cloud accounting and traditional desktop accounting are:
Traditional desktop accounting systems appear increasingly limited when compared to cloud accounting software. Some of the issues which can be solved by cloud accounting include:
When learning about cloud accounting, one of the doubts some people may have relate to the security of their data. Of course, financial information needs to be kept as securely as possible. However, cloud accounting is just as secure, and often is more secure, than other kinds of accounting systems. Providers of cloud accounting software make updates and improvements to their products regularly, and so your software package will most likely be subject to regular security updates which ensure you have up to date protection.
Some of the key benefits of cloud accounting software include:
There are a number of company types and structures which particularly benefit from cloud accounting, usually because they are more complex, and cloud accounting can simplify what would otherwise be tricky and over complicated processes. Some of these types of companies are:
The industries which benefit the most from using cloud accounting software systems are often those which have more complex financial situations, and those on the cutting edge of technology and industry. Cloud accounting allows companies operating in these fields to manage their finances with greater ease, accuracy and efficiency. Some of the industries which can benefit are:
Any company can use cloud accounting software for a multitude of purposes, but it’s especially useful for a number of particular occasions and needs. When there are changes to tax regulations such as the introduction of Making Tax Digital, cloud accounting systems can help you adapt to ensure you remain compliant. For multi-company groups and international businesses who are carrying out reporting, cloud accounting can automatically consolidate multiple subsidiaries and convert between currencies to produce smart reports for the whole organisation. When a business is expanding, cloud accounting allows the flexibility and adaptability it needs to add new functions to deal with increased capacity.