The Benefits of Cloud-Based Accounting Software: A Complete Guide
Are you looking for a way to make your business more efficient? If so, you should consider using cloud-based accounting software. Cloud-based accounting software allows you to access your accounts from anywhere in the world, making it an excellent option for international businesses, remote teams, or any business that wants to become more efficient. In fact, 90% of companies are on the cloud.
In this guide, we'll discuss the benefits of using cloud-based accounting software and how it can help your business grow.
Table of Contents
- What Is Cloud-Based Accounting Software?
- What Types of Cloud-Based Accounting Software Are Available?
- 5 Benefits of Using Cloud-Based Accounting Software
- Summing It Up
What Is Cloud-Based Accounting Software?
Cloud-based accounting software is a type of accounting software that allows users to access their data and files from any device with an internet connection. Unlike traditional, self-hosted accounting software, users do not need to install anything on their computer or server. Instead, data is stored on the "cloud" (a network of remote servers) and can be accessed from anywhere. If you want to learn more about the cloud and what it is, check out our list of cloud articles.
What Types of Cloud-Based Accounting Software Are Available?
There are many types of cloud-based accounting software available, but the most popular ones used by accountants or Finance professionals are:
Sage is an accounting software for small to medium businesses, ideally suited for companies who want to grow. The software gives users complete financial control of their business. It is highly flexible and configurable and can be used online via the cloud or installed on a server as on-premise. Sage's expenses app is easy to use and gives users access to their accounts, finances, invoicing, VAT, and cash flow.
Xero is an online accounting and bookkeeping platform that helps small businesses and accountants manage their finances more efficiently. With Xero, companies can track their income and expenses, reconcile bank accounts, and generate financial reports. The platform also offers a wide range of features and integrations that make it easy to use for both businesses and accountants.
For businesses, Xero provides a simple way to stay on top of their finances and save time on bookkeeping tasks. For accountants, Xero offers a convenient way to manage multiple clients' finances in one place. In addition, the platform's robust reporting capabilities make it easy to generate accurate financial reports for clients. Overall, Xero is an essential tool for both businesses and accountants who want to improve their financial management.
QuickBooks Online is an accounting software that allows businesses to manage their finances in one place. Finance professionals can use QuickBooks Online to track income and expenses, create invoices and bills, and run reports. QuickBooks Online also offers a mobile app, which makes it convenient for accountants to access their data from anywhere. The software is designed to save time and paper, as well as to provide a more streamlined accounting experience.
In addition, QuickBooks Online integrates with other business applications, such as CRM systems, payment processors and expense management software. Overall, QuickBooks Online is an essential platform for anyone who needs to stay on top of their accounting. It is easy to use and offers a variety of features that can save businesses both time and money.
FreshBooks is an accounting software that helps start-ups and small businesses keep track of their finances. One of the main reasons why Finance teams use FreshBooks is because it is very user-friendly. The interface is designed to be simple and straightforward, so users can easily find what they need. In addition, FreshBooks offers several features specifically designed for businesses, such as invoicing, expenditure tracking, and project management. Overall, FreshBooks is an extremely versatile and powerful accounting tool that businesses of all sizes can use.
5 Benefits of Using Cloud-Based Accounting Software
Now that we have discussed what cloud-based accounting software is and some of the most popular platforms, let's look at the benefits of using this type of software.
1. Automation of Banking and Accounting Tasks
One of the main benefits of using cloud-based accounting software is that it can automate many of the tasks associated with banking and bookkeeping. For example, many platforms offer bank reconciliation features that allow businesses to automatically import and reconcile their bank statements. This can save a significant amount of time, as companies no longer need to manually enter data into their accounting software. In addition, many cloud-based accounting platforms offer features that allow businesses to automatically generate invoices and bills. Again, this can save businesses time, as they no longer need to manually create these documents.
2. Software is Always Updated
Having cloud-based accounting software also means that businesses always have access to the latest features and updates. When a new update is released, companies can simply log into their accounts and use the new features. This contrasts with traditional desktop accounting software, which requires businesses to download and install updates manually. In addition, cloud-based accounting software typically includes automatic backups, so companies never have to worry about losing their data.
3. Improved Collaboration and Communication
Another benefit of using cloud-based accounting software is that it can improve collaboration and communication between businesses and their accountant. For example, many platforms offer real-time reporting, which means businesses can see up-to-date information on their financial situation. This can be extremely helpful when making business decisions.
4. Scales With Your Company Size
Scalability is another big benefit of using cloud-based accounting software. As businesses grow, they can simply add more users to their accounts. This contrasts with traditional desktop accounting software, which often requires businesses to purchase a new license for each additional user. In addition, many cloud-based accounting platforms offer a pay-as-you-go pricing model, so businesses only pay for the features they need.
5. Efficient Way of Accounting
Lastly, cloud-based accounting software is simply a more efficient way of doing accounting. Frost & Sullivan found that cloud technology increases productivity by 400%. When all your financial data is stored in the cloud, businesses can access it from anywhere. This is highly convenient for companies that have employees who work remotely or travel often. In addition, cloud-based accounting software typically includes features that help businesses streamline their accounting processes.
Summing It Up
As you can see, there are several benefits to using cloud-based accounting software. If you are looking for a more efficient way to manage your finances, using this type of software is worth considering. When researching the best accounting software for your Finance team, we recommend that you find out how the software integrates with other finance tools such as payment software, invoicing software or expense management software like ExpenseIn to streamline your financial processes.