Cloud Accounting – Accounting the new way In the past, the location of a firm whether it was an accounting firm or otherwise mattered tremendously because large distances had to be traversed by foot. There was no internet or anything similar which made transferring data over vast distances quite a difficult affair. However, modern technology has revolutionized communication channels between people and the use of data. It is now easier than ever to travel large distances in a matter of hours or communicate with other people in a matter of seconds. Large amounts of data can also be transferred quickly over the ever-increasing speed of the internet. With all of this in mind, it doesn’t make sense to choose an accounting firm based on the distance to you and your business. The advent of cloud accounting software which makes use of online accountants has made the usage of location-based accounting firms obsolete. What is cloud accounting software? Cloud computing lets people access software as well as data through the internet instead of on a local machine. In the past, you were limited to using the same computer to access files created on that computer. However, cloud computing has revolutionized data storage by letting you store data on a server that is continuously connected to the internet. There are all sorts of systems in place to ensure that your data isn’t lost even if one server is compromised. This means that data is much more secure in the cloud with the added benefit of being able to access it from anywhere with an internet connection. Cloud accounting software is the same thing. However, it’s limited to accounting software. Cloud accounting software is accounting software that is hosted on the internet which means that you can access it at any time regardless of the time as well as your location. It is a much more efficient approach to accounting than traditional accounting. Even though cloud accounting is limited to accounting, add-ons are developed for this software to do much more such as HR, Inventory, etc. Read our guide on the best cloud accounting software here. Benefits of cloud computing Lower operational costs as well as higher reliability – Any experienced businessman/woman will tell you that purchasing and maintaining IT equipment for proper data management is an expensive affair. The initial investment, maintenance costs, and labor all add up pretty quickly. However, cloud accounting software results in these costs disappearing. You don’t need expensive equipment to host the software and host the data; you don’t need a special team to manage or work on the software and so on. Improved accuracy – The benefit of cloud accounting software is that there’s only one version of data which results in higher accuracy. There is less of a chance of mistakes happening as data doesn’t have to be transferred from one party to another in different formats. Software is always up to data – Traditional software relies on software updates to be launched and then installed so that you’re in line with new regulations. Cloud accounting software is continuously updated by the vendor to ensure a seamless experience. Scalability – Using a cloud accounting software can enable a business to grow their accounting function as their business grows, this can be done by using add-on software and connecting with other databases through the use of API. In addition to cloud computing, there are a lot of different tools available such as Whatsapp, improved internet connections and other things, which have made communication a much easier and simpler process. This has resulted in giving businesses more options when selecting an accountant, you can either search for them based on location such as searching for an accounting firm nearby or accountants in London, or you can just search for online accountants who might be further away but also more relevant to your needs. If you are a specialized business or have special needs, choosing an accountant should be based on your needs and not the location of the firm or accountant. A great search option is to look for online accountants. Have a look at them and see if they work for you as the best option and if they suit your business at each business cycle. A few tips when selecting an Online Accountant Make sure your Accountant is Qualified and a member of one of the two most prominent Accounting bodies, Association of Chartered Certified Accountants (ACCA) or Institute of Chartered Accountants in England and Wales (ICAEW). Make sure your Online Accountant is fluent in the use of and certified with the most prominent Online Accounting Software. Some of the industry-recognized Cloud Accounting software are Inuit QuickBooks, Xero, Sage, Freeagent, etc. Make sure they will be showing you how to use your software to generate maximum business value. Online Accountants tend to be more affordable than traditional high street accountants, however, do not make cost the ultimate deciding factor. Review the services being provided, the additional business growth support and the reviews already given to the firm from their existing clients. General FAQ’s 1. Which is the best cloud accounting software? Ans. The market has a number of cloud accounting software, but there are a few that lead the game, the market leaders are decided by their user interface, addons, scalability, security, etc. The main players in the market are currently Quickbooks, Xero, Freeagent, Sage and Freshbooks. 2. How secure is cloud accounting software? Ans. Cloud software has data backed up on multiple servers across the globe, the data is sent in and out using high-level encryption algorithms. 3. How can Cloud Accounting software help my business? Ans. Cloud Accounting software help with improved data integrity, faster data storage, swifter processing of calculations and real-time reporting. This enables business owners to make agile decisions with greater accuracy. 4. Does cloud accounting software provide higher automation? Ans. Cloud accounting software is found to save time when performing bookkeeping, this is done through quicker data input, improved reconciliation and automating invoicing procedures. It also improves data sharing between you and your accountant.