Table of Contents:
- What is a Cloud-Based Bookkeeping System
- Cloud Accounting Transform the Role Of Bookkeeping
- Traditional System vs Cloud-Based Bookkeeping System
- Benefits of Cloud transformation of Bookkeeping Services
- Why Should Bookkeepers Adapt to New Processes
Accounting professionals face a lot of challenges, but two of the biggest ones are the effects of new technologies and being able to adapt to a changing environment. Despite this, the field of accounting is not new to technological advancements.
Over the centuries, bookkeeping practices have undergone many changes, mainly due to technological advances like adding machines and personal computers. In recent years, cloud technology has raised the bar even higher.
Do read the article for complete information regarding Cloud-based accounting or Bookkeeping.
What is a Cloud-Based Bookkeeping System
The system assists accountants, bookkeepers, or company owners in controlling and optimizing accounting transactions. You can keep business records online using cloud accounting, which records income and expenses, assets, and liabilities.
Since the data is encrypted, it can only be accessed by people with passwords; almost like a bank. The application is stored on remote servers with cloud accounting, so it can be accessed from almost any device wherever you have access to the internet.
How Does Cloud Accounting Transform the Role Of Bookkeeping
Rather than having all the information onsite on a local company server and segmented onto a single computer, the data is accessed over the internet and is stored in data centers using cloud computing accounting software.
These are the following advantages you can get by switching to Cloud Accounting:
1. Team Collaboration
Bookkeepers and other accounting teams can access data in real-time from any location through any device, which makes collaboration easy.
2. Remote Accessibility
Remote access made it possible for the companies to outsource their Bookkeeping because the entire accounting process is possible via an online mode that includes paper management and internal correspondence.
3. Improved Security & Back-ups
Error and security fixes can also be implemented efficiently on the cloud because software updates for cloud apps are quicker than upgrades for desktop software, which can take years.
4. Digital Storage
Storing your vital documents digitally will lessen your system’s physical space burden. In this way, cloud storage provides access to a secure and safe digital space where all your documents are saved without the risk of getting lost or corrupted.
5. Customized Experience
Customization is another important aspect, as cloud-based business line applications can connect with other software and sync with data sources like- banks.
6. Integration with Third-party Apps
A powerful workflow can be built through the right combination of integrated software. It shifts the Bookkeeper’s function from data entry to product quality.
7.Reduce Manual Work
Data entry reduces, if not eliminated, by cloud accounting. Instead, these applications would enable businesses to automatically download financial transaction data by syncing bank and credit card accounts.
Traditional Bookkeeping System vs Cloud-Based Bookkeeping System
Here are the reasons why Cloud-Based Bookkeeping is better than traditional Bookkeeping:
Traditional Bookkeeping System
Cloud-Based Bookkeeping System
|Only one person has access to the information. Key personnel are unable to gain access to financial and client data.
|Sales, earnings, and purchases should all flow immediately through your banks, so you do not have to waste time putting them together.
|Keeping backups is both costly and time-consuming.
|You can check your financial situation at any time.
|Upgrading is expensive, complicated, and time-consuming.
|It is online software, you do not have to install or upgrade anything, and all of your data is regularly backed up.
|It only works with a single device. Furthermore, it is inaccurate and unstable.
|The team and advisors can communicate more easily online with multi-user connectivity.
|Not up-to-date with data in the system.
Read this also: Difference Between Bookkeeping and Accounting
Benefits of Cloud Transformation of Bookkeeping Services
Some of the benefits are listed below:
1. Access Data Anytime from Anywhere
- Cloud accounting software allows you to examine data whenever you want and from whichever workstation you choose over traditional accounting systems.
- You can utilize online accounting tools from any location on your PC, notebook, tablet, or smartphone. You only need a device that can connect to the internet and a browser (or mobile app). It can help businesses of all sizes in a number of ways.
2. Improved Real-Time Information
- Many cloud-based accounting systems let you email invoices directly to your clients, which can subsequently be tracked for payment.
- With cloud bookkeeping tools, you can now send access to data at a glance and statements about what is past due in a single click. Using all of this real-time data allows you to make more informed decisions.
3. Enhanced Data Security
- Cloud-based Bookkeeping practically stores all your accounting data securely on the cloud.
- Using advanced encryption algorithms makes the data far safer than placing it on a workplace shelf.
4. Fast Access to Bank Feeds
- Your bank account information is used to make withdrawals, and those funds are then processed through the accounting system. It eliminates the need to post any more bank statements and saves time.
- It also gives real-time access to financial information. The financial information will be up to date because all bank transfers and all creditor and supplier bills are collected inside the cloud service.
5. More Sustainability and Less Paperwork
- No one wants to deal with paperwork. Complying with paperwork takes a lot of time and money.
- With Cloud Accounting all financial information, including journal entries, income statements, and reports, is available online. Whatever invoice, record, or access is created, it is all saved in the cloud, protected by encryption levels, and available only to those with the appropriate authority.
6. Better Invoicing
- Every business has to generate an invoice, regardless of size or industry.
- With cloud-based bookkeeping software, you may create an outstanding business invoice in a matter of seconds by using some of the premade forms. You can also customize and design your invoice template.
7. Reporting and Tracking in Real-time
- Cloud Accounting Software is real-time monitoring and reporting. All you have to do is link your online accounting system to your business bank statements to keep track of your accounting data in real-time, and you will be able to track things like expenses, revenue, and supplies.
- Cloud Bookkeeping Software can also perform bank reconciliation in just a few simple steps.
8. Streamline Tax Compliance
- Cloud Bookkeeping includes built-in tax standards, allowing you to focus on growing your business rather than worrying about dealing with the IRS.
- Select your nation and enter your business information, and the cloud bookkeeping software will automatically calculate taxes and attach them to invoices and other documents depending on your local tax rules.
You may also see: The IRS 5-Point Checklist for Return Filing in 2022
- With each passing day, more and more organizations are devoting themselves to putting their energy into growth-promoting endeavors, yet they require assistance with their essential bookkeeping responsibilities.
- Consequently, many organizations nowadays rely on accounting outsourcing firms to handle their financial records and transactions.
- The term “bookkeeper” refers to an individual or company that offers financial services such as outsourced bookkeeping, payroll, or accounts payable and receivable.
- This is why, even in 2022, outsourcing bookkeeping shows no signs of abating. As a result of business owners realizing they can devote more time and resources to expanding their operations by letting someone else handle the bookkeeping, this industry is booming.
10. Automated Bookkeeping
- In the corporate world, automation is one of the hottest new subjects. Automating processes for higher speed and precision is essential in today’s fast-paced world, as humans are continually subjected to efficiency-based errors.
- Although we are yet to reach a point where robots can take care of us, businesses have been discovering methods to employ technology to improve efficiency and reduce confusion in administrative tasks.
- The advent of cloud-based accounting software illustrates how change can benefit businesses of all sizes.
- Automation has not yet reached its full potential in providing benefits to small business owners that might aid in the continued expansion of their operations.
- Small company owners would be prudent to monitor this developing trend in bookkeeping for 2022 to determine whether or not it is worth adopting.
11. Data Analysis
- The fields of bookkeeping and accounting have observed tremendous shifts in recent decades. The accounting sector constantly oversees changes in technological aspects of operations, from paper ledgers to cloud-based software.
- Today, accounting is more than just crunching numbers on a calculator, thanks to the advent of data analytics.
- Getting insights and making informed business decisions based on data is more critical in today’s dynamic business climate.
- Numbers are crucial in business. Finding a bookkeeper with the expertise to compile your company’s financial information and present it to you in a way that’s easy to understand and use is crucial if you want to make the most educated decisions possible for your small business.
It is what you can expect from cloud-based bookkeeping software for your business.
Why Should Bookkeepers Adapt to New Processes
Even though cloud computing can make accounting more efficient for bookkeepers, there is still the risk that some traditional bookkeepers will be left behind.
Increasingly, cloud technology is transforming how businesses run their back offices, so the financial information is always up to date, available, and accurate.
By now, every firm understands the importance of on-demand financial data for forecasting and strategic planning. Bookkeepers need to understand these expectations and adapt accordingly.
The continuous transformation of the bookkeeping profession has created a need to be aware of technology, including cloud accounting tools to stay ahead of the curve.
To Sum Up!
The Future is Cloud. No matter how well your on-premises accounting solution seems to function, or how diligently you manage your traditional business, the accounting world is constantly evolving, and your business needs to adapt.
If the potential business benefits outweigh the cost, then changes that are hard to make are worth considering.
If you are satisfied with the software and want to purchase it from the best solution provider, feel free to contact us. We are an Intuit authorized QuickBooks Solutions Provider and are dedicated to selling genuine Intuit products. You can also avail the expert consultations on which Intuit versions best fit your business needs. We serve our clients with the highest quality standards.