The Influential Effect Cloud Computing Has on the Accounting Industry

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The buzz that has been generated around cloud computing over the years is so big and everywhere it has bordered in vexation. I mean, they are everywhere, aren’t they? The ads on television and billboards all over town, the accounting experts on morning talk shows. Cloud computing vendors seem to have also mastered magic, popping about everywhere like a computerized game of whack-a-mole.

But what is it that they are trying to sell? With all the colossal terms that are thrown about, you are more likely to get a splitting headache than to understand what is going on. It is easy to lose the big picture and not understand what the entity that that is cloud computing stands for. Here, we will break it down into bite-sized pieces for easy consumption.

What’s Cloud Accounting?

As complicated as it may sound, cloud accounting doesn’t have that much to it. It is merely the use of the internet to solve your accounting problems. Think of it as like using your computer to get solutions for your accounting needs, but instead of having enormous, intricate accounting applications on your device, you simply use a website to do this. And just like that, your headache is gone.

Cloud applications are grouped into two. Hosted applications offer you access to accounting software that is in a server somewhere on the globe. This gives you leeway to use the data or application that is already installed on your computer.

The second type is referred to as Software as a Service, or SaaS in short. This type stores everything needed in accounting; your data and the accounting application are in the remote server. Thus, you do not need it anywhere in the desktops or computers you use. The software and data can be accessed through a web browser on any device anywhere on the planet.

So, should you use cloud accounting? Well, before answering this, you first need to understand the full scope of cloud accounting. This can only be done by weighing the pros and the cons. Let’s have a look.

The Pros

Unlimited access

Cloud accounting applications do not limit you to the use of one place the way traditional applications or traditional accounting on paper does. You don’t have to see the accountant physically or use a specific computer that has the accounting program. Cloud accounting provides access to you at any place and at any time. All you need is a device that can access the internet, and you’re through.

Data backup and security

The integrity of clientele data is of paramount importance. As such, cloud accounting has focused on providing the tightest security, done by implementing a plethora of security tools. Encryption, and login management systems are just but a few examples of the vast security infrastructure protecting your sensitive data and financial transactions.

Storage

Just picture the amount of receipts you have to produce while filing your tax. Not only do you have to keep them safe all year round, you also have to have enough space to keep them. A bit tedious it may seem, but imagine the hustle large corporations have to go through. The bigger a business is, the larger the storage it requires. Even if the company has gone digital, it still needs to purchase expensive computer equipment and hire IT professionals to maintain it.

Cloud accounting exponentially decreases the amount of money spent on storage. No expensive IT equipment is needed for this endeavor; thus, costs are cut, and consequently, profits increase. Eco-friendliness is also promoted since large ledges of paper are not used, and power consumption is minimized.

Improves the relationship between accountants and the clients

Cloud computing provides the opportunity to transform and improve the accountant-client relationship. Accountants can share files easily with clients with permission-based sharing. It offers transparency when it comes to the status of the work. The ability to access accounting information remotely adds value to an accountant’s client servicing since he or she can assist the clients at any location or even while traveling. Besides, accountants can gather the documents they need from their clients for filing taxes and other financial tasks easily. This further expedites the process, enabling accountants to serve their clients better.

Installations and updates

Accounting applications that are installed and run on the computer require regular updates to keep in touch with the ever-changing nature of technology. This isn’t the case with cloud accounting. The vendors are in charge of the maintenance of the software, and the installation of any updates is catered for by them.

Compatibility

Cloud accounting offers compatibility with all computer devices on the planet. Whether it’s a Mac or a Windows operating system, you can do no wrong. Even smartphones can access a cloud accounting site. It supports all systems.

Costs

When it comes to cloud accounting, applications are not purchased as the cases seem to be in traditional accounting applications. A pay-as-you-use model is used in the pricing. Cloud accounting sites simply rent out their services over defined periods. This can be helpful for small businesses and individuals, as no large investment is needed.

Speed

Cloud technology offers the fastest accounting services right now because redundancies that are often present in financial data are eliminated. This is as a result of all data being stored in the same place, thus offering accountants real-time access to all the necessary information. It is even easier to access the workflow of accountants working on your data, hence providing faster analysis on the same. Consequently, it fosters quicker and more informed decision making

The Cons

Cloud accounting does present many advantages, but what gives?

Internet access

The world has been deluged by the wave that is the internet. You are, I’m sure, reading this through the internet. As basic a necessity as the internet may seem, it’s important to remember that not everyone has access to it, and internet coverage may not reach some remote parts of the world. Furthermore, broadband provision is susceptible to power outages. If you can’t access the internet, you can’t access cloud accounting.

The burst of the bubble

Remember in the late ‘90s and early ’00 when the dot com bubble was just beginning to burst? One day the World Wide Web was the hottest thing in the market, the next, its stock fell harder than Icarus. Who knows what will happen to cloud technology? Past experiences have taught us that contingency plans are needed when dealing with internet products.

Security

Internet security is like a double-edged dagger. It has its perks, but you should still be wary of it. Hackers have proven time, and again they are up to the tasks put before them. Security is still a considerable concern.

Conclusion

The Darwinian philosophy that anything that does not evolve will inevitably find itself phased out by the ever so dynamic environment has proven to be more than just a theory. Evolution is necessary for every entity surrounding life. This has been vividly illustrated by the dynamic changes in the accounting industry as undergone over the years. Integration of technology into this sector has been fundamental in ensuring efficiency and efficacy is attained. So, could cloud technology prove to be the paradigm shift when it comes to accounting? Who knows, but for now, it offers the best solutions. Just make sure you pick the right cloud accounting company that suits your needs.



Written by:
Adam Eaton

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