What are the Advantages of a Cloud Based Accounting Software?

What are the Advantages of a Cloud Based Accounting Software?

Using the best cloud based accounting software provides access to advanced accounting features and benefits such as automated data backups, improved disaster recovery, predictable costs, lower IT overhead, more extraordinary performance, and easy scalability. Using desktop systems to install software individually when employees within organizations can easily access information through cloud technology on their own devices is becoming an outdated and error-prone process.

While there were some early reservations about shifting to virtual data storage, cloud based accounting software has steadily increased in adoption among companies of various types and sizes due to the advantages of cloud based accounting software.  

What is Cloud Based Accounting Software?

Cloud computing accounting software is hosted on a remote server where data is sent to the “cloud,” processed and returned to the users. Employees in companies using cloud based accounting software can access the cloud on personal devices, eliminating the need for desktops with software separately installed in them.

This is especially great for remote and hybrid work models, with teams quickly accessing the software from anywhere.  Furthermore, automated data backups and disaster recovery are stellar features of any cloud based accounting software.

What are the Best Cloud Based Accounting Features?

Seeing its growing popularity has made many questions about the shift toward companies as well as accountants using cloud based accounting software. The answer is simple: the change to the cloud enables business leaders to save costs and avail a wide range of benefits by fully utilizing the key features. Read on to learn more about these offerings:

Automated Data Backups

Cloud based accounting software automatically backs up your data, so whether a technical crisis hits the offices or a natural calamity strikes, your critical business data will be safe in the cloud at all times. Since these backups are automated, you do not have to worry about unpredicted changes in the working environment affecting the data. 

Remote Work

Since cloud based accounting software host your business data and files in the cloud, they enable cross-platform compatibility and access to your data from anywhere and any device as long as you are connected to the internet. 

Scaling & Descaling

Business requirements can keep changing in terms of the number of users. Cloud based accounting software is flexible when it comes to adding or subtracting users and scaling, or descaling whenever required. Adding resources, such as GPU and RAM, is easy with cloud based accounting software.

Workflow Automation

Modern work models require the integration of various software for a streamlined working experience. Cloud based accounting software makes this possible by being configured such that it integrates with other applications to automate workflows. This can be especially helpful for companies using ERP accounting software as part of a larger suite of centralized, holistic business process management tools.

Protection Against Virus Attacks

Unlike a desktop-based accounting application, cloud based accounting software protects your data files and information from being corrupted by a virus attack on your device. Since the files will be hosted on the cloud, no virus attack will infect or destroy them.

Ease of Collaboration

While using cloud based accounting software, multiple users can collaborate and work on the same file simultaneously. This is often a much-needed and appreciated feature as it enables faster and usually more accurate work since experts from different domains can collaborate to add their input. 

Technical Support

Encountering problems with software and requiring technical support is a regular part of working online. However, with 24/7 technical support and assistance in troubleshooting that comes with cloud based accounting software, users can continue working without any significant disruption. 

What are the Advantages of Cloud Based Accounting Software?

Cloud based accounting software offers all the reliable functionalities once only provided by desktop accounting systems, in addition to several other benefits only limited to the cloud. Here are five reasons why you should consider shifting to cloud accounting:

Single Source of Truth

The complete financial information is available in a single, centralized database using cloud based accounting software, enabling ease and consistency while sharing information among all teams.  

Data Security

Contrary to the doubts about data security when relying on cloud based accounting software, cloud technology has consistently proven reliable and more secure than traditional data storage. Cloud accounting services enhance security for most businesses in several ways. In addition to automated data backups, multiple levels of security, such as access control and advanced encryption, ensure that only authorized users can access data. 

Data Accuracy

By eliminating several error-prone manual steps, cloud based accounting software enables greater data accuracy. Cloud based accounting software also automatically categorizes transactions, can match received invoices to payments and shipments, and flags errors.

Paper-Free & Eco-Friendly

Cloud based accounting software has rendered the conventional method of storing paper records inefficient and almost obsolete. While tracking records on emails is faster and easier, it also considerably reduces the environmental impact in several ways, such as a significant reduction in cutting trees, waste production, and energy consumption. 

Real-Time Reporting and Data Visualization

With cloud based accounting software, real-time visibility of financial data has become possible, improving collaboration across departments and overall operational efficiency. You can use reporting and analytics tools to view and manage accounts receivable software processes and also track accounts payable to better understand all of your financial processes and transactions with more depth and insight. 

Dashboards and other built-in analytics tools display complex data in easy-to-understand charts and key performance indicators, providing helpful data insights at a glance. 

What are the Disadvantages of Cloud Based Accounting Software?

While cloud based accounting software has dramatically revolutionized and offers a plethora of valuable features and benefits for all types of business accounting, real estate accounting, financial management, and lease accounting, they are not always particularly useful for every enterprise requiring high levels of customization. Therefore, before you take the leap and invest in one, it is crucial to determine your business needs, learn about the advantages, and thoroughly investigate the limitations and drawbacks associated with any cloud based accounting software.

You may experience bandwidth thresholds that slow down your online working speeds, among other regulations that impact your daily user experience. Read on to learn what could be the less-bright side to using a cloud based accounting software.

Broadband Speed

It would be best if you had a stable and fast-speed internet connection to make the most out of a cloud based accounting software. Bandwidth thresholds, restrictions, and lagging internet speeds can cause user frustration impacting work efficiency.

GDPR

This is essential while working with cloud based accounting software, especially if your solution provider needs to transfer data out of the EU.

Vendor Buy In

This issue is genuine, especially if the user is unsatisfied with their current cloud based accounting software and feels the need to switch to an alternative solution provider.

Lack of Customization

Big enterprises with legacy systems may experience a nuisance due to a lack of cloud based accounting software customization. This can be especially problematic if you need tools to manage inventory in accounting software, as this is a fairly customized and complex process that will require upgraded software tools.

How to Choose the Best Cloud Based Accounting Software

Cloud based accounting software is a practical innovation for businesses, enabling steady and streamlined work through enhanced data visibility and improved team collaboration. While looking for a choice to avail from functionalities such as automation of backups, among others, the right way to ensure you pick the best option for your business is by:

  • Understanding business requirements in your accounting management software
  • Determining budget and scalability needs
  • Managing expectations from the cloud based solution
  • Identifying the best features and functionalities in shortlisted options

Cloud based accounting software is safe and reliable for managing your finances and accounting without the worry of losing sensitive business data. Comparing the best cloud based accounting systems can give you insight into features, pricing, and user reviews to help you make an informed software choice for your business.

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