More and more small businesses are turning to cloud technology for their accounting systems. But before we get into what is cloud accounting, we should start off with what is the cloud? “The cloud” assists with you being able to access data and software anywhere and anytime. It is the central hub where your data is stored. For example, our internet banking data is accessible to us anytime, anywhere via the cloud.
This brings us to what is cloud accounting. In basic terms, your business books are kept on an online accounting system. Cloud accounting ‘software’ gives you access to all your documents and data from anywhere, making this very valuable for teams that work virtually. Many businesses are turning to cloud accounting for collaboration, a secure place for data storage and the flexibility of no longer being tied to a desk. Cloud-based accounting is done online and the software is not installed on your desktop nor do you have to manually maintain your books and ledgers. How cloud accounting works is that it is hosted on a secure remote server instead of the premises of your office or business. All records of income, expenses, liabilities and assets are sent to the remote server. It is processed through this server and then sent back to you when you need access to it. This information is encrypted, similar to that of a bank’s making it only accessible to those who have the logins and passwords to access this data. Cloud accounting is also less costly than its traditional counterparts which may require you also require less maintenance than traditional desktop accounting software (upgrades, additional backups, etc).
What is a Cloud Accounting system
Cloud accounting systems are programs/software that you sign up too. You pick the plan that best works for your needs and then you can input all your financial transactions. The systems securely store all your financial data. Some examples of cloud systems are Quickbooks Online and Xero. There are many benefits for businesses to either start with cloud accounting or to switch over. For newer businesses, this is of course an easier task as it can be as easy as signing up. For established businesses, it may take a little longer as you want to ensure that all the data is imported into the online cloud accounting program and that no critical data is lost.
What are benefits of Cloud Accounting software?
Cloud accounting systems are programs/software that you sign up too. You pick the plan that best works for your needs and then you can input all your financial transactions. The systems securely store all your financial data. Some examples of cloud systems are Quickbooks Online and Xero. There are many benefits for businesses to either start with cloud accounting or to switch over.
For newer businesses, this is of course an easier task as it can be as easy as signing up. However, for established businesses, it may take a little longer as you want to ensure that all the data is imported into the online cloud accounting program and that no critical data is lost.
1. Auto syncing of data in real-time
Automation capabilities are vital to the route many companies have taken by growing and working virtually. Up to date data is crucial to working smoothly and efficiently. Auto syncing also saves a lot of time by reducing the back and forth between accountants and their clients by receiving up to date data in real-time. You can also view your current financial situation at any time.
2. Scaling and paying as the company grows
Most software’s are easy to sign up for but if you’re a new business you may not want to invest a large amount of money. You may start off with 10-50 transactions a month but as you grow your numbers also grow. Suddenly your numbers jump to 5000+ transactions a month. Your cloud accounting software should be able to expand as your numbers rise. Cloud accounting software assists by only paying for what you need and increasing your plan as needed. This includes adding on users to increasing storage space and eventually adding advanced features when you need them.
3. Multi User Access
Your team can access the software simultaneously from different locations.
4. Paperless Environment
In our current climate with companies taking a more environmentally progressive stance. Using cloud-based systems helps by business going paperless. This eliminates businesses having to store and manage paper documents and by eliminating the need for paper, you save on costs, office space and help the environment.
5. Reducing costs
Traditional software often requires upgrades, maintenance and the assistance of system administrators. By choosing to work with a cloud-based system you do not have to pay for the costs associated with these upgrades.
6. Integration with other Cloud Accounting Systems
Many systems are converting to cloud systems by choosing to go with a cloud-based accounting system. You are opening up portals to integrate with many other systems building a technology stack.
7. Simplifying tax compliance
Cloud accounting software lets you know how much taxes are due to the CRA. How much you have thus far paid and what is left to pay. It makes it easy for you to compile the information, so you know exactly where your taxes stand.
Is my financial data secure on a Cloud System?
Cloud-based systems offer world-class security. Without the login, no one can access your data. Online your financial data is saved on secure servers versus sitting on the hard drive of your computer. Another way your data is secure is in the event of natural disasters. With all your data being stored on a cloud system there is no downtime in having to recover information as nothing is lost. You can also provide different levels of access to users who have access to your information.
The future is with cloud accounting. Systems are constantly upgrading and changing. New technologies are being developed and more and more businesses are turning to virtual offices. Set up a consultation with SRJ Chartered Professional Accountants to learn more about cloud accounting services and how they can help you and your business. SRJ also offers a variety of other services to assist with your financial needs. Please contact us at 647-725-2537 or send an email to firstname.lastname@example.org.