Cloud-Based Accounting for Businesses

White clouds in a blue sky representing cloud-based accounting software

In our previous blog, we talked about accounting software systems for small businesses. This blog focuses on cloud-based accounting vs. traditional applications, and why cloud-based systems can be beneficial for small business owners.

What is Cloud-Based Accounting?

Essentially, cloud-based accounting systems are based in a remote server that is not restricted to your office computer. While previously a system may have only been available on a certain computer, cloud-based systems are stored on a remote server, enabling users to access them from anywhere, as long as they have login permissions. This is particularly helpful at this time, when many people are working remotely and may need to share resources from varying locations.

Organizations like QuickBooks, Xero and others offer cloud-based accounting. This is the result of the demand for small business owners who want to be able to access accounting information no matter where they are located; they just need to be near an internet connection. Businesses are rapidly moving from desktop computers to laptops that are connected to servers, and this is only likely to increase going forward. As a result, adapting a company’s accounting practices to facilitate this change makes economic and practical sense.

What Are Some Benefits of Cloud-Based Accounting Systems?

1. Protection of Financial Data

If your business-based desktop or laptop computer has technical difficulties, you could end up losing data. For safety purposes, you will have a process to have back up data files if this happens. If you are using a cloud-based accounting system, the server provider takes on the responsibility of ensuring data is not lost.

2. Automatic Data Input

Another advantage is that it is possible to sync several systems, allowing for the automatic input of data that would otherwise have to be captured manually. You can sync your business’s bank account(s) so you don’t have to manually import transactions or verify expenses. This allows you more time to run and grow your business.

3. Adaptability

Speaking of business growth, as this occurs, your internal systems will need to adapt and change. Many of the cloud-based accounting server suppliers offer growth options. You can start at an elementary level, progress to a mid-level and then if necessary, to the highest level. This also enables a business to customize their system, only paying for services and functions they need, and then build on that as necessary.

4. Data Sharing

Another operational advantage is that the cloud-based accounting system is multi-access. If your accounting system is only available on a single desktop or laptop, only one person can use it at a time. The cloud-based accounting system allows more than one person to access and input data, enabling multiple people to share information with each other and keep the system up to date on a regular basis. In addition, many cloud-based accounting systems even have apps that can allow a person to update them through their phone or tablet, making the system even more portable and accessible.

One major consideration that every small business owner deals with is taxes. When a business is able to keep its financial data up to date more easily, a small business owner can make better decisions to help with the reduction of taxes paid.

5. Functionality

Continuing with the operational efficiency theme, several aspects of your day-to-day business operations, such as managing inventory, invoices, payroll, and even portions of your customer relations management can all be tied into your cloud accounting software. Save your hard-earned money; no separate software is needed.

6. Intuitive Reporting

Have you ever wondered how much easier (and more accurate) your business tasks might be if only you had a personal financial advisor? Cloud accounting apps not only give you tools to customize your own reports, they even suggest reports for you based on the type of business you own. You can make solid financial decisions when you can see the bigger picture – just like having your own advisor. There’s a report you can run for virtually every question you have regarding your business’ financial health.

If after reading this information on cloud-based accounting, you are looking for advice on how to pick a system and get recommendations on what system may be best for your business, please contact the team at Edelkoort Smethurst Schein CPAs LLP by calling 905-517-2297 or reaching out online. Their corporate accounting expertise will help you make the best decision for your business.