What Is Cloud Accounting Software?
Cloud accounting software – also known as online accounting software or web-based accounting software – is accounting software that is hosted on a remote server. Users send data to “the cloud” where it is processed and returned to the user.
The software applications can be accessed by users via the internet or other networks via a cloud application service provider. With a cloud-based accounting software, a company does not have to set up individual desktops with software because everyone in the company can access the cloud on their own devices. This also allows remote teams or branches to access the same data and the same version of the software.
A major benefit of cloud-based accounting software is the data backup and disaster recovery is often a part of your account.
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NOTE: FreshBooks Support team members are not certified income tax or accounting professionals and cannot provide advice in these areas, outside of supporting questions about FreshBooks. If you need income tax advice please contact an accountant in your area.
8 Reasons to Use Cloud-Based Accounting Software
1. Access Your Finances Anytime from Anywhere
You can get access to your financial data anytime, anywhere with a cloud-based software program. You don’t need to worry about wasting time with downloads and updates that come with regular software because the cloud is hosted remotely. Some cloud-based accounting software even comes with a mobile app, making it easier to get access to your numbers while you’re on the go. This system can give you the flexibility to not have to be sitting in your office to access your accounts or check on your cash flow.
2. Get an Up-To-Date View of Your Business
You can get a complete up-to-date view of your current financial situation when your data lives on the cloud. This will help you make informed decisions about the financial future of your business. If you were using a traditional method of accounting, you would have to scroll through pages information only to get to out of date reports. You can now meet the demands of a fast-growing business by accessing real-time financial data when you need it.
3. Save Time with Automation
With most cloud-based accounting programs, you can automate your workflow to save you time. You can enter your vendor information, for example, and set up a workflow that automatically pays that vendor on the same due date every month. You can also automate sending out invoices to your recurring customers.
4. Make Collaboration Easier
Using a cloud-based accounting software program makes it easier for you to collaborate with your accountant. The cloud makes it easier for you to generate reports that your accountant might need from you. You also have the option of giving your accountant access to the software, so they can access your numbers anytime they need to. With a cloud-based accounting software program, you also have control of the amount of access you can give to an employee. For example, if you have any employee processing payroll, you can give them access just to payroll without them be able to access bank information.
5. Improve the Accuracy of Your Accounting
There are lower risks of accounting errors with cloud-based accounting software because all the relevant financial information is all entered in the same place. If you’re entering expenses and income on a regular basis and are categorizing transactions, you can pull up an accurate report at any time.
You don’t need to know different accounting practices, formulas or shortcuts as you would if you were using an excel sheet. All you need to do to get an accurate report is to ensure you are entering your income and expenses on a regular basis.
6. No Installation Required
Cloud-based accounting software is hosted online, so you don’t need to buy a program to install on your computer.
Unlike other software programs that needed to be installed with individual licenses on each computer, access to the cloud is available on a web browser or mobile app where you can log into the account. You will also save money on an in-house IT team to do things like upgrade software or deal with other technical issues.
7. Access to Tech Support
A major benefit of a using a cloud-based accounting software is the access to tech support.
You can access tech support via telephone or chat and get instant access to technical professionals available to help you with any issues you might have with the cloud-based software. This can save your company time and money by not having to employ an in-house IT representative to deal with the software.
8. Go Paperless and Declutter Your Office
When you’re handling your finances, your paperwork can add up and become quite a challenge.
Filing through expenses, receipts and invoices can be quite arduous. With a cloud-based accounting software program, you can import the data from your paperwork straight into the cloud. Moving this data into the software will give you an easier real-time view of your finances without flipping through papers. This will help you minimize the risk of manual errors or losing important data and result in a more efficient method of managing your finances.
Is Cloud-Based Accounting Safe?
You might be wondering how secure your financial data is on a cloud-based system. Cloud-based accounting software uses encryption, rewriting your information into a secured unbreakable code, to send and store your data. This I the same type of security used to make online banking safe.
Cloud-based accounting software offers the following security measures:
- secure premises
- security staff
- an off-site automatic backup server
- regular security audits
- high-level digital security software with inbound and outbound encryption
- multiple segregated networks
- multiple built-in user authentication methods
- dedicated anti-malware staff
- customer service and technical support
- automatic updates