Cloud Accounting What is Cloud Accounting?

what is cloud based accounting

Have you wondered why are businesses shifting their accounting applications to the cloud? To answer your question, it is because cloud-based accounting software offers a plethora of benefits and is much more cost-effective. Keep reading to know about some key features of cloud-based accounting software which make them worth your time and investment. Additionally, because the data is stored remotely, you don’t have to worry about losing your clients’ financial information if your computer crashes. Cloud-based accounting software like CINC Systems also helps HOA managers automate many accounting tasks, such as financial reporting. The practice does not require you to install software in your computer or own a server. A cloud computing company that sells accounting services provides remote servers and the applications.

The local storage on your desktop is not a safe place to store your valuable accounting data. Lack of software updates in traditional accounting software for security and regular generating of data backups in external hard drives or USB devices subject your accounting data to viruses and ransomware. In the case of traditional accounting software, the financial data is stored either in computer hard drives, external hard drives, or USB devices. Traditional, desktop-based accounting software also limits a company’s agility and integration capabilities, creating bottlenecks when a company expands into different regions.

Optimising Your Time With Automation

Your books are protected by advanced, industry-recognized security safeguards that will keep your financial data confidential. You should also choose a platform that is highly rated for its security features, flexibility, and customer service. These aspects of the platform will help you ensure smooth accounting operations in the long run.

  • Paper-based accounting comes with manual processes that take time and can be error-prone.
  • Users can just open their web browsers and start using the application without installing anything on their PCs.
  • Cloud accounting software also comes with state-of-the-art analytical tools and resources that can give you nuanced insights and complete visibility over all your finances.
  • The online nature of cloud accounting is particularly transformative when it comes to accounts receivable.
  • Much like other cloud software, these solutions gave businesses game-changing flexibility while reducing capital expenditures and maximizing human resources.

Also, cloud accounting requires far less maintenance than its traditional counterpart. The cloud provider completes the backups, updates occur automatically and nothing needs to be downloaded or installed on a company computer. FinancialForce accelerates business growth with customer-centric ERP, Professional Services Automation , and Customer Success solutions. Nestor Gilbert is a senior B2B and cloud accounting SaaS analyst and a core contributor at FinancesOnline for over 5 years. With his experience in software development and extensive knowledge of SaaS management, he writes mostly about emerging B2B technologies and their impact on the current business landscape. However, he also provides in-depth reviews on a wide range of software solutions to help businesses find suitable options for them.

Accounting & Financial Reporting

For homeowners association managers, cloud-based accounting offers many advantages over traditional accounting. With no facility of linking your banking accounts to your traditional accounting software, you are entering all the financial data manually. Likewise, you are sending customer invoices and processing payroll manually that consumes time which you can probably invest in core business activities. Thus, in a cloud accounting software, the accounting data is sent on the cloud, processed on a remote server, and then returned back to you as a user. In simple terms, cloud accounting software allows users to access software applications through the internet or other networks through a cloud application service provider. In the case of cloud accounting, you keep your business books online.

  • Unlike traditional software, cloud-based software does not require you to spend on certain things such as system administration, upgrades, maintenance, and other related costs.
  • With no in-built redundancy, there is a high risk of losing accounting information for the entire data is stored on a single computer.
  • An individual just needs to sign in to the accounting platform and start working.

Cloud-based accounting makes it easier to manage and store these documents. That makes them easily accessible to anyone with the ability to use the accounting software. It makes document sharing easier, audits and research source documents an easier process.

Cloud accounting vs. Traditional accounting

They locate their servers in a remote facility, and employees cannot view stored data. Also, they encrypt all data to the highest standards by using Security Sockets Layer protection on in-transit data and public/private key combinations to decode data. Cloud accounting refers to the process of using accounting software on remote servers to complete finance related tasks.

  • The online approach makes the process faster, efficient, and up-to-date for accountants.
  • Log in via a web browser from the laptop, or use the provider’s mobile application to access the accounts even from the phone or tablet.
  • And accounting automation can only be enjoyed when you have accounting software that is adept at handling documents.
  • Below are certain key points that you need to consider when selecting cloud bookkeeping and accounting software for your business.

With QuickBooks, you can easily see what comes in and goes out of your business and take charge of your finances. QuickBooks allows you to track and organize your accounting data and generate a cash flow statement. The cash flow statement helps you to know how much money is coming into your business so that you can make your vendor payments accordingly. The cost of accounting software varies based on the features and the user access it offers.

Step 4. Manage Financial Data in the Cloud

Year-end is the end of your company’s accounting year, when you’ll need to submit statutory accounts and returns from your cloud platform. XBRL (from “eXtensible Business Reporting Language”) is a global framework for exchanging business information, and the format used by your accounting platform for digital tax returns and records. IXBRL stands for “inline XBRL” and is a similar file format, used for several types of corporate filings around the world. Zoho Books – Unlike many cloud accounting providers, Zoho provides several other business softwares of its own to connect Zoho Books with. QuickBooks Online – A platform that’s aimed squarely at small businesses, with all the accounting functionality of QuickBooks classic desktop version, plus a great app store. Making Tax Digital , the UK government’s move to digital tax accounts, requires mandatory digital record-keeping and tax returns. With a cloud platform, you’re digital-ready and can send returns in the required iXBRL format.

What are the benefits of using cloud-based accounting software?

We’ve already covered many benefits of using cloud accounting software. Here’s a bulleted recap. Cloud accounting software is virtually maintenance-free. Cloud accounting software is easily scalable as your business grows. Cloud accounting software is more affordable than traditional accounting software. Cloud accounting software gives you real-time financial data. Cloud accounting software drastically reduces human error in data entry. Cloud accounting software keeps your financial data secure. Cloud accounting software gives you and your employees anytime, anywhere accounting system access – and from virtually any device.

Cloud accounting software helps you automate various tasks in the accounting process. For instance, you can upload the vendor information into the accounting software and create an automatic workflow that pays the vendor automatically when the due date arises for such a payment.

Log in via a web browser from your laptop, or use your provider’s mobile app to access your accounts from your phone or tablet. Telecom companies must contend with new technologies, demand to deliver services faster at a lower cost, and the drive for growth. With customer-centric solutions native to Salesforce, FinancialForce is designed to scale with your business. No more wasted admin time, project delays, cash flow problems, or lost revenue. With a single database, automated processes, and powerful forecasting tools, ensure that nothing falls through the cracks.

what is cloud based accounting