What is cloud accounting? How does it any different from traditional accounting software?
These are questions we answer quite often with clients. There is a lot of confusion over what exactly the benefits of moving to a cloud-based accounting system and how it can assist in growing your business.
Cloud accounting is an accounting system that is available over the internet and allows you to access your data from anywhere. With an increase to the number of individuals working remote and travelling for work, cloud accounting systems allow you to have access to your information regardless of your location.
Security is a popular concern of users of cloud accounting, as it should be. Your accounting records are a crucial piece to your business decisions. It needs to be secure from unauthorized transactions. Cloud accounting software uses the same security as the banks.
Your data is backed up automatically. Canadian cloud-based accounting solutions store the backup data on Canadian soil. There is end-to-end encryption. Online accounting includes additional security features, such as two-factor authentication, firewalls, and redundant backup for your security.
2. Access to Information from Anywhere
An advantage of cloud accounting is that your data is available to you wherever you have internet access. You can access your financial information by way of a desktop computer, notebook, tablet or phone. Software updates are installed automatically, without interrupting your access.
3. Hardware and Space Requirement
With a cloud accounting system, your accounting data and applications are hosted on virtual servers. This results in not incurring expenses for installation and maintenance of physical equipment that would be required for a traditional accounting system. In addition, the costs of maintaining the accounting software and equipment in removed.
4. Multi-User Access
A unique feature of cloud accounting systems as opposed to traditional accounting systems, is that multiple users such as employees, management, your bookkeeper and your accountant can access and work on the same data file at the same time, from anywhere they have internet access. Collaboration can occur in real-time, providing the ability for your accounting system and related business functions to run simultaneously.
Backups through a cloud based system are taken automatically. Backups are in real-time, eliminating issues with corrupt files and lost data. In the event of a computer failure or other disaster your data is safe and you can continue on from where you left off
6. Audit Proofed
The last benefit we will touch on here is our clients favourite. For many of them, this is a source of anxiety relief. With cloud accounting systems you can audit proof your records. The systems we recommend for our clients allow for the ability to attach the receipts, invoices and contracts associated with expenses right to the journal entry. Instead of having to search, or worse request duplicate invoices from third parties for CRA audits, the source document is in your records.
These are just some of the highlights of having a cloud-based accounting system. Contact us for further information on how we can help you with your transition to the cloud.