What is cloud-based accounting?
Technological advancement has contributed towards strengthening the efficiency of the business organizations to operate accurately and gain a competitive advantage in the market cloud-based software connects with the bank accounts of the business organizations to facilitate them with the options to track their sales, inventory and expenditure.
Online transactions and easy accessibility to all the financial data are the primary benefits of cloud-based accounting. This approach further offers access to various disaster recovery tools and helps in backing up data.
The limitations associated with a traditional accounting system
Business operations are majorly dependent on the data related to the industry, and these data contribute to making business decisions. Loss of data can create a challenging situation for the business to overcome.
Traditional software has the provision for backing up all the data on the internal server, which exposes the companies to the risks associated with permanent loss of data. Companies using external devices for the purpose of storage of data expose the data to viruses which may hence lead to permanent loss of data.
Traditional software operates on the central server of the office, and hence the breakdown of the server creates a significant hindrance in business operations. Limiting the accessibility to all the relevant information delays the tasks and thus impacts the productivity of the organization as well.
Traditional accounting systems require a license to operate them. Licensing software increases the expenditure of business organizations. Maintenance of this standard software is both time-consuming and highly expensive.
Benefits of cloud-based accounting
It offers better security compared to traditional accounting software. The security features are diverse and can be further customized as well. One of the standard features associated with this approach is backing up.
The backing up features is less time consuming, more reliable and cost-efficient, and accessibility makes this software quite popular among organizations. Instant access to data and the aspect of reliability contributes towards strengthening the efficiency of the company to take business decisions.
The features of this software can be customized, which makes it more flexible and allows the users to meet the organizational requirements successfully.
Financial data processing in traditional accounting systems needs to get the final copies printed in hard copies, which is not a sustainable approach. Business organizations have been focusing on opting for different sustainable approaches, and cloud-based accounting supports sustainability.
This process does not require hard copies to be printed out, which makes this process environment friendly and time as well as cost-efficient
Best cloud-based software
There is a number of cloud-based software available in the market, and business organizations can consider their requirements to select the most suitable software. QuickBooks Online, FreshBooks and Xero are three software that is quite popular among small business organizations.
QuickBooks Online is majorly used by small business professionals. It offers the users with mobile application, has the provision to integrate the system with the help of applications by third-party and is highly scalable in nature.
FreshBooks offers its users with the option to customize their invoices as per requirements. It helps to perform the task of bookkeeping and supports the process of client retainer collection and deposit requesting. It is popular among the business professionals because of the user-friendly interface and the feature of advanced invoicing.
Xero is majorly used by micro-businesses. It offers a mobile application and allows payroll integration as well. The software has a clear and easy interface that makes it easier for beginners to use. It further offers a simple inventory management system as well.