Cloud Accounting Explained
Cloud Accounting is now evolving like never before, with companies adapting to this new technology. Also known as ‘online accounting’, cloud accounting is an accounting software that is hosted on remote servers off site from your location. Your information is sent to ‘the cloud’ where it is stored and maintained on behalf of your business.
Your data is securely stored and processed ‘in the cloud.’ This means you are able to access your business financials from anywhere and using any device, as long as you are connected to the Internet.
So why move to the cloud?
Easy Access to Information: The information can be updated and accessed from any computer anywhere in the world;
Backup and Recovery: As the data is stored on the cloud, backing it up and restoring the file is much easier than storing the same on a physical device;
Acts in Real Time: Having the information stored in the cloud allows your accountant to interact with you on a real time basis as opposed to sending the data file to your accountant each time changes are made;
Automatic Software Integration: The software is automatically kept up-to-date by the provider meaning that you don’t need to download updates such as new tax rates where the payroll module is used.
No upfront cost: Monthly access fees allows for your cash flow to be spread more evenly throughout the year. This is especially great for start up businesses that would otherwise have to fork out an upfront payment for accounting software when the money can now be spent on developing the business.
In spite of its many benefits there are concerns in regards to cloud computing. These include:
Security: Before moving to the cloud and adopting this technology, you need to be aware that you will be surrendering all your company’s sensitive information to a third-party cloud service provider. In saying that, cloud accounting programs store past data not future data, so one cannot get hold of online banking details.
Overall Cost: Whilst there is no upfront cost, monthly fees and renewing subscriptions could prove more expensive in the long term. The most important thing to look at is return on investment. Ask yourself whether the time you save will be of greater value to you than the costs of hosting or moving to the cloud? The answer will vary from business owner to business owner.
The main attraction of the ‘cloud’ software is the flexibility it gives you to run your business from work, home or on the go. If you are after more information about cloud accounting or are considering the move to the cloud software, contact our experienced accountants at The Quinn Group who can advise you whether this is worthwhile for your business. Contact us on 02 9223 9166 or visit www.quinn.com.au.