You hear everyone talking about ‘using the cloud” – ‘just file it in the cloud’ or ‘our software is cloud-based’. But, what does it mean – we’re not talking about the white fluffy things in the sky so what exactly is cloud accounting?
Why should I use cloud accounting?
Essentially, cloud accounting uses a system of servers to give users the ability to access and store their information over the internet. What this means for bookkeepers, accountants and their clients is that now they will always have access to the same up to date information providing they have access to the internet.
Having established its own niche in accounting since 1998 with the introduction of NetSuite, cloud accounting has only continued to improve and develop. The creation of cloud-based software Xero has not only cemented cloud accounting’s place as a front runner for businesses, but due to the numerous benefits, traditional accounting software is now struggling to compete.
Cloud accounting vs traditional accounting
There are many positives to moving to cloud-based accounting, the main being its accessibility. Unlike traditional accounting software which is installed to a computer’s hard drive and therefore limits users to that hard drive, cloud accounting has the benefit of being online and accessible 24/7.
The disadvantage to having your business’s information solely on a hard drive means that if an accident were to occur and the hard drive were to be damaged, lost or taken then not only would a business be unable to continue its operations until a backup is produced, but any data entered would have to be re-entered, costing the client both time and money.
Cloud accounting combats this problem as all information is on the internet. If anything were to happen to the hardware (computers), it would not affect the safety of the information since it is secured automatically in the cloud. Furthermore, every user has access to the exact same up to date data, reducing discrepancies and increasing efficiency.
The use of real time data means that cloud accounting software can give a financial overview of the business from where-ever the client is. Aspects such as bank feeds and connection to payment services enable businesses to effortlessly manage their cashflow and make up to date decisions. Some software even has mobile availability, improving the ease of use for clients as they can essentially take their business on the go.
Overall, choosing between traditional accounting software and cloud-based software is decided by what you want for your business. There is no ‘one size fits all’ solution. cloud-based accounting is continuously improving as well as the software that uses it. Its accessibility, up to date data, and online storage capabilities mean that clients can be more efficient and worry-free.
If you are struggling to sort what software is the best solution for you or your business then please give the team at 3rd Arm Admin a call on 04 2329199– we would love to help you. Or fill in your details below and we will be in touch.