Cloud service is the new trend everybody is adopting swiftly, and accounting firms are not any behind. Major perks like Broad network access and delocalized storage offered by cloud technology are the core of this revolution. In this article, I am going to put forward some ways that cloud accounting is upgrading conventional methods and looking at benefits as well as risks linked to it.
Brief Overview of Cloud Accounting
Cloud Accounting is simply a way to offer accounting capabilities in a way similar as SaaS (Software as a Service) model. The data is sent to the cloud, processed there, and then returned to the operator’s terminal. With such a broad range of cloud accounting solutions in the market, it is very easy for accounting firms and CPAs to manage and track everything with just a few clicks and all this in one place. The upgrade in accuracy and efficiency is enormous with very less time consumption, making more and more labels to adopt the technology without delay.
One other advanced capability cloud accounting offer is its ability to integrate the data seamlessly with any other cloud-based service or application at any part of the network, or we can say any part of the world. This feature alone opens a vast scope of opportunities for firms as well as their clients, increase the efficiency and ease of business.
How cloud services are revolutionizing accounting firms
1. Streamlined Process
Turning the whole process of accounting, which conventionally consisted of many hardcopies and loads of paperwork, into a completely paperless environment is one of the significant changes Cloud Accounting brought with it. Offering a delocalized and highly reliable storage space with facilities of quick and convenient access along with a high-grade security mechanism is one of the revolutionizing features of Cloud Accounting.
2. The immense gain in productivity
As stated in the Forbes report, around 59% of the cloud-based small and mid-sized businesses that are registered have shown a tremendous increase in their productivity in contrast to 30% witch don’t have integrated cloud services. All the data being saved in the cloud in a streamlined manner reduces time as well as the efforts of operators, making it hassle-free to work with. Around 82% of SMBs have shown save on costs and increased strategic focus bringing significant success to their businesses
3. Wide range of Accessibility
Delocalised Data and the capability to access it anywhere and anytime is one of the critical features of Cloud Service, making it very convenient for clients as well as for auditors to operate. As all the data is stored at a remote place, regardless of time and location the operator is present in, the data can be accessed without sacrificing the security and integrity of the information.
- Less Technical Confrontation
With antiquated methods of accounting, firms and CPAs used to tussle with different software applications and versions. With cloud accounting, the struggle to understand and get friendly with numerous technical platforms is unsolicited. Operators can keep on using the version they are comfortable with, and the client can use the software they are comfortable with. With cloud technology, the platform compatibility between client and accountant is not a requisite.
Benefits of Cloud supported Accountancy
1. Delocalized Access
In cloud technology, all the data is being stored in remote places with proper indexing and key. When any operator requests the data, the key is verified, and information is sent to their local system software. Delocalized access accredits accountants as well as their clients to access the cloud data regardless of the receiving server location. Also, the data one access needs not to be theirs; one can easily and freely use other’s data provided they have authorized access to it.
2. Real-Time Metrics
Cloud accounting also provides real-time statistics of the operations and processes that are being performed across the globe in your database. It will reflect real-time changes made by an operator working from in India as well as the person working from the US, giving the business owner a better idea of the progression of a task.
3. Next-level security
With cloud technology, one never needs to lose sleep over security. All the data is stored in encrypted form with keys in the cloud, and additional features on the client’s side like multi-step authentication and firewall protection makes it nearly impossible to breach. Technologies like block chain, which is a decentralized ledger, go best with cloud technologies to take the security up a notch.
4. Stable and Heavy Backups
The data in the cloud is periodically backed up, making sure the user can restore it anytime. This feature comes very handy at the time of data losses at the client-side. If any operator, for any reason or by mistake, deleted some entry or file or repository, it can be restored from the mail cloud database without any loss of information.
5. Reduced Cost and Time
With Cloud Accounting, one can save on the significant expenses of regular IT maintenance and server failures as all these issues are handled and resolved by cloud service organizations. It’s the provider’s responsibility to take care of the working efficiency and performance of their cloud platforms. In the case of lagging or failure of service, the operator has to inform the cloud service provider, and then it’s their job to eliminate the problem.
6. Excellent Collaboration
Cloud services let people collaborate with their fellow teammates and clients, virtually delivering more efficient results and strengthening the roots of client-provider relations.
7. Automated Upgrades
The owner has no responsibility for upgrading and updating the cloud as its fully taken care of by the cloud service provider. The providers are entitled to update and improve the services and features of their cloud regularly without causing any damage to the client’s data.
Cloud services change the whole accounting experience into a green process that saves energy with the reduced printing process and hardware resources, giving it a soft makeover.
9. Improvised Controlling
The Cloud Accounting service gives the owner the authority to assign accessibility permissions for all types of users. Just like any other database, with cloud services owners have the option to set permission level depending upon the work some user has to contribute, as an example, if the user is the official accountant of the firm, they will have almost full access to the DB. Still, a client won’t be given the same level of access.
10. Flexible Storage
In the Accounting field, the need for storage changes with time, which forces owners to change the hardware resources regularly, resulting in periodic calls of IT maintenance. With cloud accounting, this process of expanding the storage is hustle free, cost-friendly, and time-saving.
11. Reduces Errors
With cloud services, most of the tasks are automated, like storing the data in the correct file, retrieving the right data user asked for, checking for duplicate entries, or mistakes in a simple calculation, therefore, reducing the chances of error in the network and saving the users headache.
This is an exclusive feature of Cloud Accounting Services, where the owner has to pay for only those services and resources they are utilizing. It’s very convenient and pocket friendly as one’s cost will depend on the weight of data they are working on and storing in the cloud.
Challenges we will face
Cloud Accounting is still an emerging field, with only 60% of firms adopting it, so we may not predict many challenges that will come with this revolution just now, but every innovation has its own set of challenges. While talking about Cloud Accounting, we are assuming we will have internet access everywhere and every time, but if, for some reason, we fail on this, we’ll lose all access to our data.
Secondly, as all the data is stored in the clouds, no matter how much security we make, it will still have some cracks. We ensure Cloud data security by using data encryption, fundamental authentication, and firewalls, but despite all this data present in the cloud every time making it prone to attacks and, in worst cases, data losses.
Integrating Cloud computing services and Accounting is undoubtedly a very revolutionary approach. It will transform the field of accounting in the best ways, but we are just beginning to see its impact now. With all the benefits it has to offer and the pace firms are adopting the technology, it’s going to be a significant paradigm shift. However, there still are some concerns regarding the security of the data. No doubt, technologies like block chain and cryptography are being improvised in accordance with the need, but the risk can never be eliminated absolutely. Despite all these doubts, there is no denying that cloud accounting is a technology that will refurbish the ways of accounting like never before, and people who will shut their eyes to it now will surely have to put up with the consequences.