Cloud-based technology is becoming the norm in big and small businesses. Cloud-based technology opens new opportunities for how businesses operate. Some would argue it is changing the fundamentals of how businesses actually do business. The advantages are endless – it can give a business more efficient systems, it can streamline processes and it can make them more independent overall. It also provides them with information in real-time.
One of the biggest industries impacted by cloud-based technology is accounting. This technology diverts from mainstream, large-scale accountant firms we’ve all become familiar with over the years. Now cloud-based accounting is putting more power in the hands of the business owners. Sometimes, it even brings the accounting system completely in-house.
There are numerous facets to cloud-based software. Let’s take a closer look at the fundamentals of this technology and how it impacts accountants.
With cloud-based accounting software, accountants and business owners can access information from anywhere that has internet. It gives them a real-time update of where the numbers are standing. Financial data can be transparent, accessible, and analysed in a live, up-to-date setting.
This makes accounting easier by decreasing the amount of preparation needed to create a final balance sheet. It also makes it more efficient when working with other parts of the business. For instance, with cloud-based software as an online inventory management tool, stock taking data can be kept up-to-date and compared with the accounting information.
Historically, traditional accounting required the accountant to input data by hand. This manual process is lengthy and human error is always a factor. Digital software made some of this data entry easier but it still required physical entries from the accountant.
With cloud-based software, accounting becomes automated. It communicates with your everyday financial management system and online inventory management software. It can track when goods are purchased, sold and can update the system automatically. This means financial reports can be generated quickly and accurately. It will ensure that the information is recent as you want it.
Not only is this process faster, but it saves accountants time. It allows accountants to analyse data in a deeper context. They can spend more time on strategic initiatives such as looking at growth opportunities and how to enhance systems in the business.
One of the best features of a cloud-based accounting software is its flexibility. It is a very adaptable platform that can work and grow with your business. It can communicate with your online inventory management system, help you keep tabs on what’s in the warehouse and what’s on your balance sheet.
With previous accounting software, if your company grew, you would need to buy more accounting software licences. This was often a significant upfront cost. If a small business was in a growth phase, they may not be able to afford all of those licences right away.
However, with cloud-based accounting software, these costs are no longer a hindrance. An accounting department can expand because they are not restricted to computer-bound software. The cloud is flexible and can move and grow with accountants.