The accounting industry, as well as how businesses operate in general, is undergoing many changes. The advent of cloud-based accounting software has brought the power of accounting to the world, allowing companies to focus more on growth while making the day-to-day task of accounting far more efficient. This post will discuss why you need accounting software for your business to understand better the benefits it can bring.
What Is Accounting Software?
Before understanding the advantages of using this software over manual accounting methods, it is wise to get a brief overview of what is meant by the term accounting software. Accounting software is a set of software applications designed to track, analyze, and report financial transactions. In the most basic terms, accounting software helps businesses operate more efficiently by simplifying processes and providing more relevant information to make better business decisions. The functions of accounting software vary depending on the type of tool. There are two main factors that your business can choose from:
- Cloud-based
- Local installation
What Is Cloud-Based Accounting Software?
Cloud accounting software enables businesses to store their financial information in the cloud, eliminating many hassles associated with traditional accounting software like hardware maintenance, software upgrades, and installation. Cloud-based software, otherwise known as software as a Service (SaaS), is becoming increasingly popular as businesses discover its many advantages. The cloud also provides access to different devices and locations. The cloud-based alternative offers greater flexibility to streamline processes and increase efficiency. Generally, it provides a less costly solution for small businesses.
The main advantages of cloud-based software over a local installation include the fact that all of your data is in the cloud, allowing any staff with the requisite permissions to access and manipulate the data. Moreover, the cloud accounting software providers at 360visibility.com indicate that cloud-based accounting suites can keep your data secure without the need to invest in costly in-house systems and the subsequent IT departments required to maintain them.
What Is Locally Installed Accounting Software?
Locally installed accounting software means a computer program installed on a computer used primarily to record and document financial transactions. Although they can offer similar features to cloud-based solutions vis a vis their function, they are rapidly becoming obsolete as more and more businesses discover the benefits that cloud-based accounting can provide. For instance, while your accounting staff might be able to share data on a local intranet, they are generally unable to access it when out of the office. Although you can use a remote server, it requires too many steps, making it impractical in today’s mobile-centric world.
How Can Businesses Benefit From Cloud-Based Accounting Software?
Cloud-based accounting software is a great way to reduce the amount of time and effort you spend tracking and updating your company’s financial records. Today, most employers use cloud-based accounting software to help them organize and track their money. What are the main advantages of using a cloud-based service like this?
Anytime, Anywhere Access
Cloud-based accounting software lets you access data anytime and anywhere, making it easy for businesses to continue operations around the clock. With cloud-based solutions, you can access your accounts and financial information from anywhere and at any time. When you use desktop-based software, you are essentially tied to the office. Because all of your financial data is stored locally, you have minimal access to it. Cloud accounting removes this restriction. The records and data you enter are encrypted securely and stored in the cloud; you don’t have to download anything. You simply log in and work using a browser or app, wherever there is Wi-Fi and the internet. Therefore, you can always keep an eye on the state of your business, wherever you are.
Your Data Is Safe From Security Breaches
By storing your data in an encrypted manner, cloud software keeps your data secure. In contrast, on-premise software must be installed on the company’s computers and is susceptible to unauthorized access. In order to make your business safer, it is essential to understand how cloud-based accounting software keeps your data secure. These tools have been designed with security in mind and have the potential to keep your information safe from prying eyes. There are several ways in which your data remains secure in the cloud, such as:
Encryption: This process transforms information into code that unauthorized users cannot read.
Geolocation: This service keeps track of the physical location of all connected devices and restricts access to only authorized users.
Backup and recovery: Backup services save all connected devices’ data, so if anything happens, you will be able to recover it without any loss of any content or personal information.
Permission-based access: Access can be restricted at any given time, allowing for a greater degree of operational flexibility.
Advanced Collaboration Features
Accounting is a multidisciplinary field that requires a lot of collaboration. For example, the salary process for a company is done collaboratively by different parties with different skill sets. This can be highly inefficient if not streamlined, but it also has many benefits as people from other departments can work together to provide the best solution for an organization. Cloud accounting helps companies collaborate more effectively by providing them access to work on projects remotely. It eliminates the need for paper-based processes and other digital tools. Businesses can share and facilitate access to information with cloud accounting, resulting in enhanced productivity in almost all areas of their operations.
It Makes Sense Financially
Cloud-based accounting software is a convenient and cost-saving option for businesses of all sizes. There are many ways cloud-based accounting software can help you reduce costs without sacrificing performance or functionality. For example, it will allow you to be more productive by taking away the need for employees.
Although this sounds harsh in today’s economy, many small businesses simply cannot afford to employ a large accounting team and must hire fewer, more highly skilled accountants to do the job. Cloud accounting also offers a much more flexible option for businesses that need to scale up operations while saving money at the same time.
Cloud-based accounting software is a better option for businesses. Not only is the solution secure and easy to manage, but it offers a wide range of features and can be accessed from anywhere. Cloud accounting software has numerous benefits, ranging from lowering overall costs to improving accounting productivity, and which businesses small and large can benefit from.
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