What is Cloud Accounting?

You must be coming across the term – Cloud Accounting very often these days and wondering what it is anyway. In simple words, its a new way of accessing your accounting software from the web browser without actually installing it. Its also referred to as online accounting. We already use such ‘online softwares’ delivered as services like internet banking, email, file sharing sites, etc

Before going into more details, lets first understand what is cloud computing.

According to this article on Wikipedia, Cloud computing is a term used to refer to a model of network computing where a program or application runs on a connected server or servers rather than on a local computing device such as a PC. This hosted application can be accessed by any internet enabled device such as PC, tablet or a smartphone.

For example, cloud accounting software – ProfitBooks is hosted on the centralized servers. Users can just open their web browsers and start using the application without installing anything on their PCs.

Cloud accounting is the most exciting thing that had happened to the accounting industry in recent years. This has enabled the bookkeepers and business owners to work on the same system simultaneously regardless of their location. Bookkeepers and chartered accountants no longer need to go through the pain of importing client’s data files into their systems.

How Cloud Accounting Can Help Small Businesses

Business owners can access their data anytime from anywhere. Business owners are always on the move and are increasingly using tablets and smart phones to access latest financial data. With cloud accounting, they can see the business account balances, outstanding invoices, overall cash position and much more from anywhere 24/7 as long as they can access an internet connection.

Cost of ownership is lower as compared to traditional accounting softwares. There is nothing to install and maintain. Software updates automatically without user intervention. This results in overall reduction in cost. This enables small business owners to focus on the core business activities.

Cloud Accounting is secure. Normally, proper security measures are not implemented by small businesses to protect their financial data. Cloud Accounting softwares like ProfitBooks maintain high security standards. Backups are taken at regular intervals, servers are scanned for vulnerabilities and data is transferred over the encrypted connection.

Online Accounting Softwares are integrated with other services. For example, ProfitBooks can be integrated with popular file sharing application Dropbox to store and share files. There are endless possibilities to extend the functionality by connecting with other online softwares.

It brings the entire team together. Cloud accounting enables business owners and accountants to work on the same file simultaneously eliminating the need of data transfer and physical meetings. Time is money, isn’t it?