Over the last few years, we have seen quite a few businesses move to cloud-based accounting solutions in the past years. One of the reasons for the move is as a business grows, they find it hard to be on top of their administration. Besides hiring accounting staff, it is often efficient and costs less to adapt to cloud accounting.
But cloud accounting is not for everyone; some businesses might not need cloud accounting and prefer to hire clients. There are many advantages and disadvantages with cloud accounting that could contribute to a positive or negative decision.
Advantages Of Cloud-Accounting Systems
One of the most common reasons why companies turned to cloud accounting is that they want to enhance efficiency or they need better, up-to-date and good financial information. But there are other advantages like-
- Costs less money- for several businesses, cloud-based solutions require lesser costs and have an in-house accounts department or executive. Cloud Bookkeeper Services work on a subscription basis with a price that depends on the number of users and modules needed. The entry-level costs are very affordable for most companies.
- Easy to use: cloud systems have easy to navigate user interfaces and several applications that allow access to accounts on the go.
- Access for the whole day: a good advantage for clients can ‘always on’ in the financial information. The important indicators are always displayed on a dashboard not to have to go looking for them.
- Information in real-time: another huge advantage is the ‘real time’ ability given the data is attributed timely.
- Streamline processes: many clients find cloud-based systems helpful for streamlining processes, eliminating duplicates and allowing faster team collaboration.
- Backup and security: the cloud-based solution provider looks for security and backup so that a person can be satisfied that their processes meet their ends. This takes away the problem of keeping in-house account systems in an updated and secure manner.
- Ability to expand while a business grows: Ascending is easy using cloud-based systems. It is just a question of increasing monthly subscriptions.
- Do not need to pay for installation: not having a lengthy installation and setup process does not only save time, but it could also save money. Most Cloud Bookkeeper Perth tools run on a software-as-service model that means one needs to pay a subscription over time to use them.
On the other hand, when software is built or installed in a system, one could constantly be forking out cash to ensure they are in working order. Business owners who have their software installed on a system have to pay for the initial product and the maintenance and upgrades that come with it.
Disadvantages Of Cloud-Based Systems
As mentioned at the outset of this article, cloud accounting does not suit everyone, so it is necessary to investigate the risks and advantages before switching to a cloud-based system. Some risks that people need to be aware of are-
- Speed of the internet: cloud-based accounting systems need a good internet connection; or otherwise, bad speed could cause inefficiency, and one could be affected by an internet outage.
- Data security is very important as one needs to be confident that a network provider maintains a good standard. Additionally, one may need strong discipline around controlling access to staff leave; for instance, the logins of those members to the system are removed.
- GDPR: This is essential, especially if the solution provider one chooses could involve transferring data out of the EU.
- Brexit: one does not know what future arrangements could be around digital services and data. This could be a cause of worry.
- Vendor locks in some clients worry about vendor lock-in cases; they have to switch to a different solution provider in the future.
- No customization: this is very concerning for big companies with legacy systems.
- It demands a security practice for the team: Cloud accounting is safe, but practices need to be put in place that makes sure a company and their team are not leaving the systems vulnerable. Many businesses Bookkeeping in Perth and employees are responsible for ensuring that the data is being kept safe. This could include practices such as password safety and not leaving the workplace logged in.
Those in a senior administrative role are wise enough to use control features to ensure that every individual of a team has access to various parts of a Cloud accounting system. It needs little effort to protect the data, but those are worth it.
- It only has an online mode: one only needs an internet connection to access the cloud. While it has benefits, it also has weaknesses. If there is a bad internet connection at the office, traditional accounting software could help deal with it. There will be limitations in the tool with cloud accounting without the internet.
The problem can easily be reduced because one can always move anywhere that offers them another internet connection. But if that is not available, it will cause huge problems. When one has to use it online, cloud-accounting software can be hungry for bandwidth, so one needs to make sure that the present internet connection can handle it without trouble.
Software Needed For Cloud Accounting And Cost
Xero and Quickbooks Online fall into the category of cloud accounting software. A benefit of cloud accounting applications is that one can build an accounting software stack that suits the needs of their business and help improve workflow efficiency. E.g., Hubdoc is an application that easily brings financial documents and extracts key data. When integrated with other applications, the value of the general ledger software and Hubdoc increases.
Associating With A Cloud-Accounting Software
There are various Bookkeeping Services in Perth that use cloud-accounting software; one could hire their services and adapt to cloud-accounting for easier accounting. Accounting softwares generally helps in saving time, energy and money for a business by completing tasks in a small amount of time. So it will be beneficial for companies to associate themselves with cloud-accounting softwares.