Cloud Accounting – Is It Right for Your Business?

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Cloud Accounting - Is It Right for Your Business?

The CeebeksTM Team have been using cloud accounting services since 2015 as part of our drive to deliver efficient, time-saving and accurate accounting services to our customers.

As a small business owner who has not yet made the ‘leap of faith’ into this area of data keeping and recording, you will likely have questions about the seemingly mysterious and unknown “cloud”, your data security, the cost of cloud accounting software, and so on – and rightfully so. Changing any processes (especially those involving sensitive data) can be complicated, not to mention the fact that cloud computing maybe completely foreign to you.

Our Team have the information you need to understand the benefits of the cloud and are here to help!

Here are some simple facts about cloud accounting to help you better understand what it is.

What is cloud accounting?

Traditionally, accounting was executed using software hosted locally on a desktop computer’s hard drive (e.g., Quickbooks Desktop, Quicken, Sage etc). Cloud accounting, on the other hand, is accounting that is executed using software that is hosted remotely on the cloud – i.e., online. Think of it the same way as  your online banking where you login to access your information and process it.

To better understand what is meant by “the cloud”, here’s PCMag’s definition of cloud computing:

In the simplest terms, cloud computing means storing and accessing data and programs over the Internet instead of your computer’s hard drive. The cloud is just a metaphor for the Internet. It goes back to the days of flowcharts and presentations that would represent the gigantic server-farm infrastructure of the Internet as nothing but a puffy, white cumulus cloud, accepting connections and doling out information as it floats.

The internet, but more particularly the cloud, has disrupted and transformed many industries over the past several years, allowing businesses to operate more efficiently, cut costs, and amplify results.

What are the benefits of cloud accounting?

The cloud accounting software landscape encompasses many solutions designed to serve a number of accounting/bookkeeping functions. For instance, our favourite accounting software, Xero, is cloud-based accounting software, whereas Expensify is a cloud-based solution to help manage employee expenses.

Although benefits will vary between solutions, on a general level, some of the benefits of cloud accounting applications include the following:

  • The ability to automate many manual accounting and bookkeeping processes. These automation capabilities enable accountants/bookkeepers and their customers to save time and increase efficiency, allowing them to spend more time on business growth.
  • The ability for data to be accessed regardless of location or device. This facilitates remote services and “anytime” communication, which will help to build stronger relationships between an accountant/bookkeeper and their customers.
  • The ability for data to be updated in real-time. Being able to access financial data and information quickly (i.e., in real time) will empower businesses to make informed decisions sooner rather than later.
  • The ability to easily scale to meet growing business needs. Let’s say your business currently makes 0-100 transactions per month, but experiences rapid growth that causes this number to jump to 10,000+ transactions per month. Your cloud accounting software should be able to easily support this growth.
  • The ability to facilitate a paperless This will eliminate the need to physically store and manage paper documents, which is not only beneficial from a cost and office space perspective, but also for the environment.
  • The ability to provide automatic updates. This will help to further improve the functionality of the application and better enforce security.
  • The ability to reduce costs. Cloud-based software does not incur the costs associated with traditional software (including maintenance, upgrades, system administration, etc.).
  • The ability to integrate with other cloud solutions. These integration capabilities will improve the efficiency and increase the power of your cloud accounting technology stack.

But how secure is the cloud?

Given the sensitivity of the data associated with cloud accounting applications (e.g., banking and financial data), security is a top concern in the cloud accounting space.

When compared to traditional desktop accounting software, which could be compromised if a company computer is stolen, lost, or damaged, cloud accounting software has many security advantages. Each cloud accounting solution should have its own security policy outlining how it protects sensitive data. Most solutions use state-of-the-art measures such as multi-factor authentication and encryption, ensuring sensitive data will remain secure.

What kind of software do I need for cloud accounting and how much does it cost?

Quickbooks Online and Xero fall into the category of cloud accounting software.

However, a key benefit of cloud accounting applications is that you can build upon your accounting software stack to better suit your business needs and improve the efficiency of your workflows. For instance, Hubdoc is an application that automatically fetches financial documents and extracts key data. When integrated with any of the platforms mentioned above, the value of both Hubdoc and your general ledger software increases.

Cloud accounting software is most often available for purchase as a SaaS (Software as a Service) subscription model. The pricing of your cloud accounting software stack will vary based on the applications you need to meet your unique business needs.

What will happen if I don’t adopt cloud-based technologies?

The cloud is the future. Even if your on-premise accounting solution seems to function “just fine”, or if you’re diligent about managing your traditional processes, the world of accounting is inevitably changing, and it’s important for your business to keep up. The risk associated with maintaining old processes isn’t a question of capability – rather, it’s a question of whether or not you want to grow your business and maintain a competitive edge.

Change can be difficult, but if the potential business benefits outweigh the costs, then it’s worth your consideration. As daunting as a transition to the cloud might seem, don’t be intimidated – our team will be happy to answer any of your questions and help to make the transition as easy as possible!

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