Cloud accounting is one of the most rapidly growing technologies in modern times and is rightly gaining ground for all the amazing things it brings to the fore. The age-old accountants hustling on the outdated computers and maintaining hard copies of the accounts are rarely seen these days. The huge stacks of papers have been replaced with ultra-modern, user-friendly accounting applications like QuickBooks today.
Cloud accounting enables modern-day accounting firms and CPAs to get remote access to all the standard accounting functionalities over the cloud (the internet). It removes all the hardware dependencies and offers on the go solutions to all the accounting needs.
Industry experts believe that cloud accounting programs and internet bookkeeping applications will disrupt the accounting industry in the coming years. The impact of the novel coronavirus is further believed to speed up the cloud adoption by the accounting and finance industry, which otherwise are presumed as slow adopters of modern technologies.
According to the Transparency Market Research, the worldwide accounting software market, having a value of 5.7 billion USD in 2017, is expected to increase to 11.7 billion USD by 2026, growing at a Compound Annual Growth Rate (CAGR) of nearly 8.6 percent.
There are quite a few cloud-based accounting solutions, also known as SaaS-based applications, available for the modern accountants. These applications require no in-house hardware or software. They can be accessed simply using the web browser in even a smartphone having an internet connection.
These cloud accounting applications register all types of financial transactions in functional modules like payroll, accounts payable, accounts receivable, trial balance, etcetera. The following are some of their other key features:
- Recording cash flows
- Keeping track of transactions
- Generating account reports
- Performing calculations
- Consolidating business financial details
The cloud-based accounting applications can be used on a subscription basis, providing the CPAs a state-of-the-art infrastructure to work with, at a minimal cost. They help accountants improve operations, efficiency, and profitability.
Why You Should Move Your Accounting Practice to the Cloud?
The cloud is helping accountants keep accounts with ease, saving huge time and effort by providing them on-demand access to all their accounting information and resources. It brings a great opportunity for accounting professionals to enhance their business performance. Cloud accounting modifies the human resource management and administrative processes which help accounting firms optimize their skills to achieve innovation and bring in sophisticated accounting services.
The accounting firms and CPAs are rightly embracing the cloud to achieve great cost-efficiency, flexibility, and ease of operation. If you are an accounting professional and still wondering why you should consider moving your accounting data and resources to the cloud, then listed below are the major reasons that will more than convince you in favor of adopting the cloud:
- Real-time Data Analysis
The cloud-based accounting tools come with automatic account update functionality that helps accounting firms share real-time data with both the clients and staff. It proves extremely beneficial for the decision-making authorities in the businesses who have an on the go access to all the live accounting and finance data for timely, accurate decisions.
Moreover, real-time file sharing eliminates the requirement to send and receive files via email, saving a lot of time. A single shared file can be worked on simultaneously by multiple users including client and accountant.
- Scalable Data Space
One of the most important features of the cloud is the easy scalability options it provides. At no point in time users are required to upgrade or make fresh investments to the hardware infrastructure in order to meet their increasing data storage requirements. Accountants can scale up or down, whenever required, quite quickly and cost-effectively. All they require is a storage modification request addressed to their cloud service vendor and everything is taken care of.
Ease of scalability is a huge advantage compared to the in-house, hardware-based accounting infrastructure. The time and stress it saves accountants from is just an added benefit.
There is no on-premise hardware infrastructure required in cloud accounting which means no expensive devices to purchase and maintain. No hardware infrastructure also eliminates the in-house software dependencies. Accountants only require internet-connected devices to use their accounting resources. This is the major reason behind the greater cost-efficiency of cloud accounting.
The following are some of the other factors that add to the cost-efficiency of the cloud:
- Lesser power consumptions due to the absence of dedicated, internal hardware infrastructure
- Minimal to no human resource IT infrastructure maintenance
- Subscription model offering a pay-as-you-go approach
- Improved Business-Client Relationships
Cloud helps businesses offer their services in a very user-friendly, time-saving, and transparent manner. Accountants can easily share accounting documents and data with their clients. Further, the remote access capability enables accountants to assist their clients from any geographical location, making it extremely convenient for both the accountants as well as clients.
The cost-efficiency of cloud computing also gives accountants an opportunity to transfer some capital benefits to their clients in the form of discounted service charges. This not only helps attract more clients but also retain their confidence and satisfaction. Hence, if you move your accounting practice to the cloud, it will help you enhance the accountant-client relationships like never before.
The on-demand access to all the accounting information, applications, and resources enable accountants to file tax and accomplish other important financial tasks without being dependent upon the on-premise infrastructure. It provides great flexibility to their business as they can serve their customers on the go.
- Easy Collaboration, Integration, and Innovation
The easy, remote file sharing in the cloud accounting opens the doors for better collaboration and integration. It makes it more convenient for accountants to make use of third-party applications and services while accomplishing complex tasks that require diverse skills and resources.
The cloud also makes it easier for the accountants to integrate the latest technologies like Artificial Intelligence, Big Data, and Machine Learning, which further make way for modern, innovative solutions such as Robotic Process Automation (RPA) and Chatbots. With the help of all these tools and services, CPAs can automate lengthy, data-intensive, and onerous tasks, saving their time and efforts for critical accounting works.
- Improved Data Security and Backup
The security of the data is extremely crucial in the accounting and finance industry and the cloud takes utmost care of it. The modern cloud-based accounting tools are designed keeping in mind the privacy and security aspect of the data. This enables accounting firms and CPAs to perform all their hardcore accounting tasks through the cloud, without worrying about information security.
While there are cybercriminals and account hijackers who regularly attempt to explore the slightest loophole in the cloud-based accounting system, the service providers and application designers implement multiple security strategies to make cloud accounting as immune to these threats as possible.
The following are the most recommended security strategies for any cloud service consumer:
- Secure APIs
- Strong internal firewalls
- Strong robust access passwords
- Multi-factor authentication
- Data encryption
In addition to providing state-of-the-art security, cloud accounting offers effective backup plans to make sure the data is easily recovered, in case of data loss. These backup capabilities safeguard the accounting data and resources from unfortunate catastrophic events.
Going through all the above-mentioned reasons it is clear why cloud accounting is being adopted at such a record pace. All the benefits it offers provide great agility and efficiency to an accountant. It offers accounting firms and accountants a great opportunity to cash-in some of the great features like flexibility, scalability, and amazing data security.
On the whole, cloud accounting is a future-proof, innovative, and profitable way to keep accounts. What we are currently looking at is just the initial impact of the cloud on the accounting industry. There are certainly bigger and better things to expect from the future and hence, moving to the cloud seems inevitable for any accountant going forward. The sooner they adopt it, the better it is for them.