In recent years, cloud accounting services have become a more commonplace as businesses gradually adopt the technology. In most ways, cloud-based accountancy software is like traditional software, with the key difference being that it is hosted by remote servers. This means that all data is stored off-site, rather than on person’s own computer. It brings with it several advantages, although for some it also raises potential security concerns.
Perhaps the biggest advantage cloud accounting offers is much greater flexibility. Instead of only being available on specific, onsite computers, accounting data can instead be accessed on any device, anywhere, at any time. This is especially useful for businesses with several locations, as they can all access the data simultaneously. Furthermore, as the computing is performed offsite, the technical capabilities of devices are less important, meaning smartphones and tablets share the abilities of powerful desktops. Combined, these factors make it perfect for those regularly travelling.
Cloud Accounting also helps protect vital data from being lost. Those using traditional software face a constant risk of hard drive failure, fire or theft. However, as cloud-based accounts are stored on multiple external servers, they are safe from such disasters. This also saves time by eradicating the need for some laborious tasks, such as producing and storing backups, and installing software updates.
Data is usually more accurate and up to date when using cloud accounting. As it is updated in real time, whenever someone log-in, they can be certain that they are being informed by the most relevant information. Additionally, as the data updates automatically, it saves additional time and eliminates the inevitable human errors that comes with manual data input.
Adopting cloud accounting can lead to cost savings. It reduces the need for much of the server and IT infrastructure necessary for traditional accounting software, freeing up assets to be invested elsewhere. The costs of cloud software also scale well, making it especially useful for smaller, growing businesses. There are lower upfront costs and you can pay for greater capacity only when you need it, with no wait for new software or hardware to be installed.
A key concern, for many, regarding cloud-technology is security, and with financial data being highly sensitive, this is no less the case when it comes to cloud-based accounting. Fortunately, they utilise security features, such as firewalls and encryption, to ensure that no data can be accessed by prying eyes. Some argue that these features actually make cloud-based accounting more secure than traditional accounting software, as a work computer or USB drive containing sensitive data can easily be lost or stolen.
Cloud accounting services are likely to continue its growth, with some in the industry predicting it soon will be used by over 90% of small and medium sized enterprises. This is understandable, considering the benefits it provides, especially for those smaller businesses. Concerns surrounding security are likely to fade as people become more used to the idea their financial data being available online, much like has been the case with online banking. These factors mean that the rapid growth of cloud-based accountancy looks set to continue.