What is Cloud Accounting?
Cloud Accounting is one kind of online based accounting software that is hosted on a remote server from anywhere in the world. The users of the software send data to ” the cloud”, cloud processes the data and returned to the user.
The Cloud Accounting software can be used by the users via the internet or other networks. With this accounting software, you don’t need to set up individual desktops with the software because every individual in the company can access the cloud on their own devices.
The major benefit of cloud-based accounting software is the data backup and disaster recovery is often a part of your account.
Advantages of cloud accounting:
The advantages of cloud accounting are presented below:
- Easier Access: The cloud accounting becomes popular because of its easy accessibility. The user can get access to financial data at anytime and at anywhere with a cloud based accounting software. As cloud based accounting software is hosted remotely, you don’t need to download and update the software. Some cloud based accounting software can be accessed by installing the mobile apps. Finally, it can be said that this accounting software gives you the flexibility not to sitting at your work station to oversee the financial movement and review the cash flow position.
- Availability of updated information: You can get up to date financial condition when the data lives in the cloud. The data lives on the cloud, may help you for taking financial decisions for the upcoming days.
- Time Saving: A user can save his time with the automation of workflow. Say for example, as an accountant you may insert supplier’s information and set up a workflow that may assist to make the payment on the on the same due date every month. The user may also send invoices to the recurring customers.
- Easy Collaboration with the accountant: Cloud based accounting software make easy to collaborate with accountant. The required reports for accountants can easily generate from the cloud. The accountant may also access to the cloud if required access is given.
- Accurate accounting: As all the financial information are entered in the same place, there is lower risk of accounting errors. Due to continuous updating and inserting the expenses and income regularly and categorizing transactions an accurate report can easily be generated.
- No installation is required: As this is hosted online, so, no need to buy a program to install on the computer.
Disadvantages of Cloud based Accounting:
Besides advantages, cloud based accounting software has limitations. Few limitations of cloud based accounting are as follows:
- Internet/Broadband speed is very important for effective running. A good connection may be needed, otherwise slow speeds could impair your data entering and your time will waste. Consequently the client’s requirements, you may not fulfill.
- Data security could be another issue. If you don’t have sufficient awareness, you may loss your data.
- Client dissatisfaction may arise if they feel you are not enough concern regarding protecting the data.
- The customization issue could be another issue. Standard report may not generate at all times.