Cloud accounting is simply the use of a software system that is not maintained (hosted) on an in-house computer. Instead, the servers can be anywhere and all of your team can have access to the software and information necessary to do business. There are a number of accounting programs on the market that will allow you to incorporate cloud storage. Each software has similar and different components and you need to select the right combination for your business and your employees.
Cloud accounting is far more flexible. Employees are not tied to a desk or specific computer, or even a computer at all. With a solid internet connection the accounting functions can be handled from any device.
Studies are showing that cloud accounting is more accurate with fewer errors than in manual accounting methods.
Safety – Using cloud technology means there are no hard drives or computers to put your sensitive information at risk. Since it is not on the premises you won’t need to worry about a fire or water damage destroying all your information. Also cloud storage is backed up routinely to servers in multiple locations giving you better security than in your offices.
Growth Opportunities – As your company expands, the software can expand with you. Most programs allow for business growth and the need for more storage or advanced features.
Multiple Users – Because you are able to give various people access to your financial data, group effort is easier. This will allow job sharing or splitting but with all the information still in a central location. It also gives your accountant, financial advisor, partners, or investors up-to-date information without printing or even face-to-face meetings. Remote access makes it all possible.
Immediacy – Instead of accumulating all the paper and then making all the entries at the end of the day or week, especially when you are tired, the transactions are immediately recorded. As the business owner that gives you a better perspective of slow paying customers or cash flow issues. You can have a financial report at any time. If you deal with companies or individuals in another country, cloud accounting can also deal with exchange rates and different currencies.
Consolidating Actions – All your transactions are held in a single software application. That means you don’t need to invest money, and time, in separate systems for payroll, inventory, and invoicing.
Taxes – There are variations in some of the programs to let you know where you are in taxes owed to the CRA or how much has been paid into a specific tax allocation. It also makes it simpler to complete the tax forms each year.
Analysis – Many of the available programs will let you customize the reports you need. In addition to the basics of a balance sheet and receivables, you can design a report specific to a task or situation. This helps the owner understand the exact position of the company and make better decisions.
Cloud accounting is becoming the norm rather than the exception. It can be integrated seamlessly into your current operations and help prepare you for the future. As programs are improved, you are better situated for growth opportunities.
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- The Capex Team