Cloud accounting is the future, according to Nick Galov (2020) by the year 2026 the global accounting software would be worth $11,770 million. According to his report, 67% of accountants in the United States believed that the implementation of cloud technology has contributed to their client’s success. This is great news, accountants has predicted that about 78% of small businesses will use cloud accounting for their operations. This is just the start, but it is clear that the future is cloud.
But first, let us take a step back and understand the difference between a cloud accounting system and traditional accounting software. One big difference between the two is that cloud accounting is hosted and maintained through a server accessed via the internet. Traditional accounting software, on the other hand, is installed on a local office computer. Cloud accounting is more cost-effective. Traditional software needs an IT or programmer to update each computer, which is time-consuming and costly. Cloud accounting software only needs a system update, which would be reflected by all users, easily. There is no need for IT to individually check computers. System problems and troubleshooting are also easily solved. Thus having a cloud system accounting is cheap but also makes businesses work efficiently.
There a few more exclusive benefits of cloud accounting. One benefit of using CA is that accountants feel confident to provide advice. This is because they are able to base their decisions on accurate and real-time updating data. Not only that accountants now have better control of financial processes. The system also allows a higher level of visibility and that accountants are able to have a clear bird’s eye view of the whole business. Having a wide and clear view of financial health is great, especially in giving important and even crucial financial advice to the client. In order to stay competitive in such a globalize and fast-paced world, accounting firms need to make data-driven decisions to stay on top.
Cloud-based software is also very accessible to accountants, they are able to retrieve financial and business information from any location, may it be from the safety of their own or in a coffee shop nearby. Having cloud-based accounting software is a great asset especially in the future when businesses and corporations transition to remote or hybrid setups. This will also optimize their workflow and even allow them to work anywhere they want. Accounting firms can even take it a step further by hiring remote accountants from different parts of the world. Managers are able to monitor their progress and collaborate more easily, even if their workers are a hundred miles away.
Lastly, it is paperless, gone are the days where accounting offices as filled to the brim with papers. Paper documents are expensive and take up space. It is also hard to update them and store them. Traditional accounting practices and analog databases are time-consuming and are highly prone to human error. Cloud accounting is the future and problem solver, it significantly reduces the amount of paperwork and time to update documents. Now accountants can focus on more important tasks. It will also reduce their reliance on paperwork. In cloud accounting software, accountants and managers can update clients anytime and anywhere. Invoices can be emailed directly to the clients. This reduces mailing fees and speeding up payment. Some software can even detect and scan receipts and invoices, then is saved directly in the cloud for everyone to see. This paperless set-up is great, one can generate financial reports and presentations with ease, even if they are halfway around the world.
Even if the pandemic has shocked the system, and caused many to pivot their usual business operations. It had also greatly accelerated the growth of cloud accounting systems. This tool has shown everyone that there are no longer geographical boundaries. Digital systems will further improve remote work, which pushes firms to be globally competitive. Staying on top of this digital and globalize wave will help firms have better control over their data and processes, curate a diverse accounting team and generate high-quality accurate decisions.