Cloud Accounting: What Is It And Why Is It Useful?

The ‘cloud’ is a trusted and well-used virtual space where people and companies alike can store the likes of their abundance of data, videos, and images, giving them access to their files from anywhere with an internet connection.

It’s no surprise that accountants and accounting firms are also taking advantage of the software, reaping the benefits, and preparing for a future of smarter cloud accounting.

In this blog, we review all things cloud accounting, taking advantage of the software, to how it can vastly improve company performance and manual accounting tasks.

What is Cloud Accounting? 

Put simply, cloud accounting is completing and keeping your books online. This includes everything from documents, data, assets, and liabilities. As the information is both secure and encrypted, this way of accounting has been trusted and used by companies since the late 90s, and early 2000s, although it has evolved significantly since then.

Cloud accounting works the same way as the cloud would in any other situation, through an application service provider that can be accessed from anywhere at any given time.

What are the benefits of Cloud Accounting?

The benefits of cloud accounting are endless, and the adoption of this practice has been popular amongst thousands of accountancy firms in recent years due to the automation and accuracy of data input. Additional benefits include:

Say goodbye to admin

It’s said that 57% of cloud adopters spend less than one hour a day on manual processes, showing that cloud accounting greatly reduces the number of administrative tasks. Not only does this have a profound impact on the environment, but it is also a cost saving for companies with office administrators or assistants.

Cloud accounting greatly reduces the number of administrative tasks, which not only has a profound impact on the environment but is also a cost-saving for companies with office administrators or assistants.

Additionally, if less time is spent on administrative tasks, there’s also little to no need to have additional servers or an IT structure that supports admin tasks, which is another great way to reduce costs and ensure everything is happening within one software.

Remains up to date

Cloud accounting also ensures software is always up to date, which is critical when it comes to tax rates, accounting rules, or new features. Online accounting software will update automatically, meaning that there’s never a risk of information being obsolete or inaccurate.

Easy automation

Automation is probably the first thing that pops into someone’s head when they hear the phrase cloud accounting, and that’s for good reason!

Accounting companies no longer have to manually update books, manage monthly invoicing, or write monthly reports as this can all be completed for them with the help of AI.

Today, accounting automation removes the least efficient and most time-consuming parts of any accountant’s job (including those mentioned above) which means there’s more time for developing the business through strategic planning, research and analysis, and most importantly, human interaction.

It’s also worth noting that international companies who often send money overseas see automation as business critical due to cloud systems making sure these payments are compliant with global accounting laws and standards.

Unmatched security

Cloud accounting is extremely secure, which means accountants no longer have to worry about the level of sensitivity of the information they are handling. Clouds are also known for having several levels of security including the latest encryption and robust verification and authentication options, meaning the information stored can only be made available to those who need it.

Remote work friendly

We live and work in what is essentially a remote world, with many of us now working with hybrid models or working entirely from home. Cloud accounting allows accountants to do the same with benefits such as collaborative accounting, being able to work anywhere in the world while always having all company books and files accessible to you.

Cloud accounting allows teams to work collectively and seamlessly in one platform, which in turn increases productivity, efficiency and allows for data retrieval to happen in no time at all.

So, it’s clear that cloud accounting impacts everything from company performance to a reduced amount of time spent on manual tasks, but if you are a company looking to start your cloud accounting journey, how do you know what software is right for you?

We discuss the most trusted cloud-based accountancy software and what it is that makes each one stand out from the crowd.

Examples of Cloud-Based Accounting Software

Well known and used globally, Xero prides themselves on being a fuss-free, yet robust accounting software that was specifically built for the cloud, rather than being software built for desktop and converted to the cloud. Xero can be accessed anywhere with internet access and is used to pay bills, complete VAT returns, claim expenses, accept payments, and track projects. Xero can be used by a variety of different businesses, across many industries. For example, Xero can help any retail organisations to view their cash flow on the go, and reduce manual admin. 

SAGE is an HMRC recognised accounting software system that allows for smarter invoicing, controlled cash flow and thousands of detailed reports readily available when data is input. Like Xero, Sage offers business advice, member masterclasses, and free trials for anyone who wishes to find out more about the software.

A Sage extension, ‘Sage for Accountants’ is a separate software designed specifically for accountants. The extension includes benefits such as human support, bookkeeping and payroll services and is perfect for accountants who are managing practises and work closely with their clients.

And finally, NetSuite Cloud Accounting software aims to improve business performance by increasing financial efficiency and accelerating accountancy accuracy. Skilled in what they do, NetSuite is trusted by thousands of companies across the globe who are hoping to reduce manual processes and remain compliant against appropriate global accounting laws, processes, and standards.

Known as the top choice for inventory, food and beverage industries have made use of NetSuite for order management, control, visibility and product planning. 

So, with software at your fingertips and technological advancements driving huge change, it’s clear to see that accounting has transformed drastically over the last decade, with continuous development across cloud-based accounting and automated accounting processes.

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