Traditionally, small businesses were required to purchase and install accounting software in their internal computer networks. However, purchasing software as a “product” has not only proven expensive over the years, it has also forced many businesses to channel their limited resources from other important functions. The introduction of cloud accounting software, which is basically Software as a Service (SaaS), has provided businesses with solutions to some of these challenges. Online accounting software does not require businesses to purchase, install or manage in-house servers. Below is a brief look at how your small business stands to benefit from cloud accounting.
The Benefits of Cloud Accounting Software:
1. Cost Effectiveness
Conventional accounting software requires your small business to spend money on two levels:
- Initial capital expenditure – this refers to the cost for the initial purchase of computer equipment, along with the software application and/or licenses. In addition, the software vendor may charge you installation and training fees.
- Recurrent Expenditure – You will also need to set aside funds for the day-to-day running of your accounting software. Some of the expenses include computer maintenance, software license renewals, upgrade fees, and professional consultation fees, among others.
Cloud accounting software, doesn’t require any initial capital expenditure – just pay a monthly fee and you are good to go. Your financial data is stored and processed online. In addition, there are no extra charges such as installation, upgrade or license fees since it is the responsibility of the vendor. The cloud service provider takes care of software upgrades and updates, and manages all the hardware including servers, network switches and Operating Systems. This enables your business to enjoy the latest versions of software with up-to-date features, at no extra cost.
2. Easy Access and Convenience
Switching to cloud accounting software will enable you to access your business’ financial information from anywhere, and at any time – all you need is an Internet connection. Online accounting makes your business more agile since you can work from home, the office or even when on the move. What’s more, you can use a wide variety of devices including computers, laptops, tablets and even smartphones, to access your financial information.
3. Enhanced Security
Cloud accounting software providers offer you scaled security levels; as opposed to the basic security protection that you can buy for your PCs. Security is an expensive affair. However, these vendors have no option, but to invest in the latest and most sophisticated data security systems that can guarantee the security and privacy of their customers’ data. The high number of end users has a cumulative effect that enables cloud vendors to afford the very latest web security tools. For compliance purposes, reputable cloud software vendors are required to meet the requirements of the International Standard for Data Security (ISO 27001).
Essentially, cloud accounting software is web-based and thus, you only need a web browser to access your accounting data. Therefore, there is no limit to the type of platform or Operating System you can use to access your business information; it doesn’t matter if it is Windows, Mac, iOS, or Android. Data storage and processing is done securely “in the cloud”.
5. Back-up and Storage
Most cloud accounting software providers offer unlimited storage of your accounting data. Therefore, you don’t have to worry about costly HDD and memory upgrades, and the resultant downtimes. In addition, your cloud software provider performs regular data back-ups to ensure that your business information is protected from disasters.
Overall, cloud accounting software eliminates the cost and burden of keeping your accounting software up to date and running. Your business is able to focus on other important tasks and save money. This all might seem a bit overwhelming at first which is why it is always a good idea to consult with someone has an accounting degree for extra help and advice.
Blake Pappas completed his undergraduate degree in Justice Studies from Arizona State University. Blake has also recently worked in higher education and is currently pursuing a Master’s degree in Business.