Renting a cloud accounting system helps in managing, bookkeeping, and safeguarding your financial data with better efficiency, cost-effectiveness, and scalability.
The thing is, the way small and medium-sized businesses (SMBs) manage their finances has drastically changed over the years. A large part of this change is brought about by cloud accounting.
Not only has cloud accounting helped businesses ditch old and laggy accounting systems, but it also can counter many financial struggles associated with traditional methods.
Nowadays, many businesses are slowly integrating cloud accounting to reap its maximum benefit and streamline their financial system.
It will help you manage everything online, including all the financial aspects typical SMBs work with.
In this article, I’ll discuss cloud accounting and its advantages for SMBs.
What Is Cloud Accounting?
Cloud accounting is an online accounting service that helps you access and manage all your finances over the internet. Instead of having accounting software on your computer, you will have the software in a cloud platform.
Cloud accounting is basically a Software as a Service (SaaS) program offered as a subscription model, and you just have to pay a monthly subscription charge. This software is similar to any popular traditional accounting software used on your computer for managing your finances.
Therefore, you won’t face problems during bookkeeping or struggle with the process after the transition. The only difference from the traditional one is that cloud accounting systems are hosted on a remote server, and you can easily access them from any of your web browsers.
As a result, it frees you from the hassle of installing them on every computer for your employees and the risks of losing data in case of failure. Cloud accounting offers more flexibility and security because the accounting information is stored in the cloud, and you can access it anywhere.
Furthermore, it also helps you create a distributed workforce; your employee would just need the internet to work on the same software as everyone else.
Benefits of Cloud Accounting
Many SMBs benefit from cloud accounting as it helps them address many issues related to traditional accounting. Some of the many benefits of cloud accounting include the following:
#1. Easy Accessibility
The beauty of cloud accounting is that you can access all your company finance from anywhere in the world, just through your internet. It is one of the biggest perks because you and your team won’t be limited to computers to access your financial data.
The best thing is that cloud accounting software is designed to cater to distributed employees and remote working. With shared access, any of your employees can access the required information anytime without opening an office computer.
The easy accessibility also ensures a flexible working environment, and you won’t have to rely solely on one device for working.
#2. Cost Effectiveness
Cloud accounting can be cost-effective for SMBs with its subscription model. You just have to pay a standard amount on a monthly basis to use the software, and the price will vary according to the add-on features and the number of access.
For traditional accounting software, you would have to pay a significant upfront cost. Moreover, you will have to spend more for the hardware to run that software swiftly. But cloud accounting solves this issue and helps SMBs select an accounting software tool and plan according to their budget.
#3. Saves Time
When you integrate cloud accounting into your business, you can save a lot of time compared to traditional software. All your financial information, like sales, transactions, purchases, and income, will be automatically updated from your account to the books.
You don’t have to manually put all the information for bookkeeping or spend on Excel, manual paperwork, and other repetitive tasks. Thus, you can save time and focus more on future goals.
With manual financial paperwork and clunky programs, it was challenging for small businesses to scale up or down. However, cloud accounting solves the issue by adapting and customizing services according to your needs.
So, when the business grows, you won’t have to spend much on accommodating more users or integrating additional features to cater to the increased workload.
Scalability is easy with SaaS software because you won’t have to spend extra on servers and hardware.
#5. User Friendliness
You can be an excellent entrepreneur, but you may not have good knowledge of accounting and financial work. That’s why most cloud accounting software systems are user-friendliness so that everyone can use them without any struggle.
These SaaS programs and their intuitive system and seamless design can make everything easy. Importantly, you won’t worry about incorrectly inputting any data while exporting financial data to your software because those works are automated. Cloud accounting mitigates all the mismatch, redundancy, and other financial issues and makes bookkeeping hassle-free.
#6. Makes the System Smart and Organized
Cloud accounting software is known for bringing automation to your business operation, and it helps the business get smart and organized. This software properly organizes all your financial data and structures them so that it’s easy for you and your team to access them.
Unlike the traditional approach, you won’t have to rely on information recorded on paper partially, and it helps you declutter your office as everything is available on the cloud. Whether it is sales, transaction, or purchase information, everything will be automatically updated on the server and reflected in your software.
#7. Enhanced Security
Once you shift your business structure to cloud accounting, you will get added security for all your financial data. These software systems are loaded with various security features like encryption at source, multi-factor authentication, automatic backup, secured payment, and many other features.
Unlike traditional software, cloud software is less prone to data breaches and attacks from hackers, ensuring your financial data is properly protected. Moreover, this software always stays updated with the latest security patches and industry security standards, saving you from security risks.
#8. Expanding Reach
A major reason many SMBs utilize cloud accounting is that it helps them expand their reach and create streamlined communication between members since everyone has access to real-time data.
This also helps build a good relationship among accountants and team members and find ways to reach your goals. It also allows you to integrate various tools in your software, like CRM, projector management, and many others.
#9. Staying Competitive
When cloud accounting automates many tasks, it gives you time to focus on your company’s growth and pay heed to other matters.
Moreover, it allows you to invest money and resources in various tasks, which will help the organization compete with others. Since it streamlines many tasks, it helps you grow your company and outgrow your competitors.
Features To Look For In Cloud Accounting Software
When you decide to integrate cloud accounting software into your business ecosystem, you have to be vigilant about the one you choose. Here are some features you should consider while choosing one:
#1. User Friendliness
User-friendly software will help you work with ease. Apart from your accountant, the software will be used by other team members, so it becomes vital to have a platform that is easy for them to understand and use.
#2. Integration With Other Tools
When you expand your business, you must integrate other financial tools to streamline your work and manage workloads. So, choose the software that helps you integrate most of the vital tools needed for your work.
#3. Availability of Mobile Apps
Choose the cloud accounting software that can provide you with a mobile app for seamless access.
Having a mobile app for your software will enhance the ease of usage because you can access every update with one tap. To check for expense updates, you won’t have to open your laptop and log in to your account through your browser.
#4. Real-Time Inventory Management
The software should not only give you access to stock that has been ordered but should give you real-time access to the remaining stock in the warehouse.
Having real-time access is highly important because you can estimate your subsequent sales and accumulate inventory accordingly. It saves a lot of your company’s resources and helps you streamline your inventory management.
#5. Tech Support
Few people consider it, but having software with good tech support plays a good role in maintaining your workflow.
When you have a technical professional available for any assistance, you won’t have to worry about any glitch or issue you face during work hours. Tech support should be available 24/7, so any users facing issues can immediately get expert guidance to solve the problem.
Now, let’s talk about some popular cloud accounting software you can opt for for your organization.
When the talk about cloud accounting software arrives, you can’t proceed without considering FreshBooks. It is a popular accounting software designed for freelancers and SMBs to cater to their financial requirements. It is also suitable for other industry types with significant resources for business growth.
You will have access to a lot of research and reports from FreshBooks, giving you deep insight into the market and the current scenario. This cloud accounting program gives you access to many features, including accounting, bookkeeping, invoicing, clients, estimates, mileage tracking, reports, proposals, project management, payroll, etc.
To make the software affordable to subscribe to, the brand has also come up with four different subscription schemes- Lite, Plus, Premium, and Select.
Whether you run a manufacturing, non-profit, retail, restaurant, legal, or any professional service, QuickBooks can simplify your financial management. It is another well-known cloud accounting software among business owners that helps you track income and calculate your tax beforehand.
In addition, you can manage e-commerce, bills, run reports, manage projects, get tax dedication, and do many more things. QuickBooks also gives you access to many practical tools like invoice generators, timesheet calculators, paycheck calculators, income statement templates, etc. You can even integrate them into the software to reduce manual work.
You will get four subscription plans – simple start, essential, plus, and advanced for this program, along with a 30-day free trial.
The popular cloud accounting software among SMBs is Sage which has earned accolades from many top organizations. Even though it is mainly designed to cater to startups and small businesses, the software can be utilized across various industries like chemical, wholesale distribution, construction, food & beverages, etc.
Unlike others, the accounting software offers some unique features like:
- Sage Intact for advanced financial management
- Sage X3 for operational management
- Sage Fixed Assets for tracking business assets
A great thing about this software is its interactive dashboard that allows you to unite all your data and build a new dashboard for your requirement and edit them from 200 prebuilt visuals.
Whether you run a small business or are a bookkeeper or accountant, Xero is the accounting software you need to simplify your work. Xero is a fully featured cloud-based accounting program that lets you utilize features like track projector, pay runs, bank reconciliation, and claim expenses to fulfill your financial tasks.
Besides, the brand has developed features where you can manage clients and ledgers, arrange compliance workflows, and do many other tasks. One of the major benefits of Xero is its ability to automate various tasks and strict data security.
When you opt for Xero’s subscription model, you will get three options: Starter, Standard, and Premium, where the standard is considered value for money.
Cloud accounting software is the future; soon after learning about its advantages, all SMBs will start utilizing it. It’s a wise investment since you will get benefits like cost-effectiveness, scalability, performing tasks efficiently, accessibility, and more.
So, rent a cloud accounting software solution for your business and enjoy the benefits yourself. Also, choose the software based on the features, cost, and other aspects discussed above.
Next, check out the accounting online course platform for everyone.