💤 MODEM ACCOUNTING TRENDS [PART : 4] 💤
ALL ABOUT ACCOUNTING : 54th BLOG
💎ACCOUNTING💎
⭐ MODEM ACCOUNTING TRENDS :
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Today's discuss second accounting trends...
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4️⃣. CLOUD BASED ACCOUNTING :
The cloud is becoming a popular place for accounting services. With cloud-based accounting systems, companies and firms are able to have access to their system anytime. Data access also includes tracking inventory, sales, and expenses. Moreover, cloud-based solutions allow FOR the creation of workflows, saving businesses valuable time. Having such benefits are driving businesses to make the shift to cloud-based accounting systems.
As such, about 67% of accountants now believe that cloud technology can make their roles easier. This is according to a survey conducted by Sage, which also reveals that 53% of the respondents adopted cloud-based solutions for project management and client communication. This could be related to the rise in the demand for advanced technological solutions from various industries. Among them is the accounting industry, which is taking a major leap for more effective and comprehensive financial reporting and analytics.
★ HISTORY OF CLOUD ACCOUNTING : The idea of cloud accounting originated in New Zealand in 2006 with Xero. Xero has always been a cloud-based accounting solution; it never developed or sold a traditional desktop version of its accounting software.
Xero grew quickly in New Zealand, and then moved to Australia. Cloud based solutions now have a large market share in New Zealand and Australia. Xero next targeted the UK and is gaining market share. More recently Xero has begun to target the Canadian and American markets.
The longer a cloud accounting solution has been in a market, the more features it adds in general and in particular for that jurisdiction. In general, the longer an application exists in a market, the more third party add-ons exist to address specific needs.
Quickbooks has a long history with desktop accounting applications; saw this new category of software developing in New Zealand and Australia and introduced its own Cloud Accounting program called QuickBooks Online, which has a longer history and market share in North America.
Sage has augmented its desktop accounting solution Sage 50 (Simply Accounting) with a Cloud based offering called Sage One, that started its development in the UK.
As with any market in the growth stage there are numerous starts ups, such as Wave, Zohobooks and others, each finding its own niche.
★ IMPACT OF CLOUD BASED ACCOUNTING ON BUSINESS :
Cloud-based technology is becoming the norm in big and small businesses. Cloud-based technology opens new opportunities for how businesses operate. Some would argue it is changing the fundamentals of how businesses actually do business. The advantages are endless – it can give a business more efficient systems, it can streamline processes and it can make them more independent overall. It also provides them with information in real-time. One of the biggest industries impacted by cloud-based technology is accounting. This technology diverts from mainstream, large-scale accountant firms we’ve all become familiar with over the years. Now cloud-based accounting is putting more power in the hands of the business owners. Sometimes, it even brings the accounting system completely in-house.
There are numerous facets to cloud-based software. Let’s take a closer look at the fundamentals of this technology and how it impacts accountants.
With cloud-based accounting software, accountants and business owners can access information from anywhere that has internet. It gives them a real-time update of where the numbers are standing. Financial data can be transparent, accessible, and analysed in a live, up-to-date setting.
This makes accounting easier by decreasing the amount of preparation needed to create a final balance sheet. It also makes it more efficient when working with other parts of the business. For instance, with cloud-based software as an online inventory management tool, stock taking data can be kept up-to-date and compared with the accounting information.
Historically, traditional accounting required the accountant to input data by hand. This manual process is lengthy and human error is always a factor. Digital software made some of this data entry easier but it still required physical entries from the accountant.
With cloud-based software, accounting becomes automated. It communicates with your everyday financial management system and online inventory management software. It can track when goods are purchased, sold and can update the system automatically. This means financial reports can be generated quickly and accurately. It will ensure that the information is recent as you want it.
Not only is this process faster, but it saves accountants time. It allows accountants to analyse data in a deeper context. They can spend more time on strategic initiatives such as looking at growth opportunities and how to enhance systems in the business.
One of the best features of a cloud-based accounting software is its flexibility. It is a very adaptable platform that can work and grow with your business. It can communicate with your online inventory management system, help you keep tabs on what’s in the warehouse and what’s on your balance sheet.
With previous accounting software, if your company grew, you would need to buy more accounting software licences. This was often a significant upfront cost. If a small business was in a growth phase, they may not be able to afford all of those licences right away.
However, with cloud-based accounting software, these costs are no longer a hindrance. An accounting department can expand because they are not restricted to computer-bound software. The cloud is flexible and can move and grow with accountants.
🗯️ PROS & CONS OF CLOUD BASED ACCOUNTING :
* Pros: It’s efficient, simple, and convenient:
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With Cloud accounting tools like Xero accounting, you don’t have to wait on lengthy install and setup periods to start with your bookkeeping processes. They are hosted entirely online, so all you need to do is register, input a few quick details, log in and start making use of them. You don’t have to go about installing it anew on every new system, so it’s much easier for all members of your team to start making use of it. You can focus less on the logistics and more on learning how to most effectively use the software.
* Cons: A lack of specialised tools.:
The most popular Cloud accounting tools, like Xero accounting, provide all the functionality that most small businesses could want for. However, for more specialised businesses like construction, they may not have all the features that you need. There is a growing diversity within the Cloud accounting market, however, so it’s worth doing your research and seeing what’s out there. It’s only reasonable to expect that more specialised options will become available as the market continues to grow, too.
* Pros: Improved security
The idea of someone gaining unauthorised access to your accounts is enough to make most business owners scream in terror. If all the accounting data is sitting there on one device, ready to be lifted at any point, it can put your business at serious risk. Few businesses make it more than two years after a major data breach, after all. However, top-of-the-line tools like Xero bookkeeping ensure enhanced security for all their services.
Cons: Demands strong security practices from your team
The idea of someone gaining unauthorised access to your accounts is enough to make most business owners scream in terror. If all the accounting data is sitting there on one device, ready to be lifted at any point, it can put your business at serious risk. Few businesses make it more than two years after a major data breach, after all. However, top-of-the-line tools like Xero bookkeeping ensure enhanced security for all their services.
Cons: Demands strong security practices from your team
Yes, Cloud accounting is much safer, but that’s only true if you put the practices in place that ensure you and your team aren’t leaving your systems vulnerable. Every business and employee have some responsibility to ensure they are doing their part in keeping that crucial data secure. This might include teaching practices such as a password safety and not leaving workstations logged in and unattended.
Those in more senior, administrative roles are wise to make use of the access control features, to ensure that every individual employee or team only has access to the parts of the Cloud accounting system that is directly relevant to them. It requires a little effort to protect but it is worth it.
Pros: You don’t have to pay for installation, maintenance, and upgrades
Yes, Cloud accounting is much safer, but that’s only true if you put the practices in place that ensure you and your team aren’t leaving your systems vulnerable. Every business and employee have some responsibility to ensure they are doing their part in keeping that crucial data secure. This might include teaching practices such as a password safety and not leaving workstations logged in and unattended.
Those in more senior, administrative roles are wise to make use of the access control features, to ensure that every individual employee or team only has access to the parts of the Cloud accounting system that is directly relevant to them. It requires a little effort to protect but it is worth it.
Pros: You don’t have to pay for installation, maintenance, and upgrades
The lack of a lengthy installation and setup process doesn’t only save you time. It might also save you money. Most Cloud accounting tools run on a software-as-service model, meaning you’re paying a subscription over time to make use of them. On the contrary, with software that is built or installed onto your systems, you may be constantly forking out cash to ensure they’re in good working order.
Business owners who have their own software on their own systems have to not only pay for the initial product but the ongoing maintenance and upgrades that they need. With Cloud accounting, the software development is handled entirely in-house by the provided and, so, they eat the costs, as well. All you have to pay for is access to the software.
Cons: It’s an ongoing cost
The lack of a lengthy installation and setup process doesn’t only save you time. It might also save you money. Most Cloud accounting tools run on a software-as-service model, meaning you’re paying a subscription over time to make use of them. On the contrary, with software that is built or installed onto your systems, you may be constantly forking out cash to ensure they’re in good working order.
Business owners who have their own software on their own systems have to not only pay for the initial product but the ongoing maintenance and upgrades that they need. With Cloud accounting, the software development is handled entirely in-house by the provided and, so, they eat the costs, as well. All you have to pay for is access to the software.
Cons: It’s an ongoing cost
While it may be cheaper to use Cloud accounting, it’s still a constant, ongoing cost that has to become part of your regular overheads. Many Cloud accounting providers offer some flexibility in how and when you pay, but all of them require regular payments. For some packages, this might mean that Cloud accounting is more expensive in the long-term, so you have to make sure that you choose your service carefully and know the costs before you dive in. Pros: Makes it much easier to move to a paperless system
While it may be cheaper to use Cloud accounting, it’s still a constant, ongoing cost that has to become part of your regular overheads. Many Cloud accounting providers offer some flexibility in how and when you pay, but all of them require regular payments. For some packages, this might mean that Cloud accounting is more expensive in the long-term, so you have to make sure that you choose your service carefully and know the costs before you dive in. Pros: Makes it much easier to move to a paperless system
Since Cloud accounting is handled entirely digitally, that means that it’s much easier to stop relying on a paper trail as long as your arm. Not only can you save on the costs of paper, but the costs of stocking and maintaining printing machines, and both the money and space spent on storing all your accounts physically. The Cloud allows you to save reports and documents on your own computer, while the remote data centres/servers act as a backup, so you don’t necessarily need a physical copy.
Of course, most businesses will always rely on some level of paper storage, but Cloud accounting can at least help you reduce it.
Cons: Online only
Since Cloud accounting is handled entirely digitally, that means that it’s much easier to stop relying on a paper trail as long as your arm. Not only can you save on the costs of paper, but the costs of stocking and maintaining printing machines, and both the money and space spent on storing all your accounts physically. The Cloud allows you to save reports and documents on your own computer, while the remote data centres/servers act as a backup, so you don’t necessarily need a physical copy.
Of course, most businesses will always rely on some level of paper storage, but Cloud accounting can at least help you reduce it.
Cons: Online only
You need an internet connection to access the Cloud. While this offers some benefits, as we have explored and will dive deeper into in the next point, it is also a potential weakness. If your internet cuts out at the office, traditional accounting software allows you to keep working with it. With Cloud accounting, however, you will be unable to use the tool effectively. This problem can be mitigated by the fact that you can always simply move somewhere that provides a different internet connection, but if that isn’t readily accessible, it can mean significant potential downtime. The fact you have to use it online means that Cloud accounting can also be quite bandwidth hungry, so you need to make sure that your current internet connection can handle it without issue.
Pros: You can use it from anywhere
You need an internet connection to access the Cloud. While this offers some benefits, as we have explored and will dive deeper into in the next point, it is also a potential weakness. If your internet cuts out at the office, traditional accounting software allows you to keep working with it. With Cloud accounting, however, you will be unable to use the tool effectively. This problem can be mitigated by the fact that you can always simply move somewhere that provides a different internet connection, but if that isn’t readily accessible, it can mean significant potential downtime. The fact you have to use it online means that Cloud accounting can also be quite bandwidth hungry, so you need to make sure that your current internet connection can handle it without issue.
Pros: You can use it from anywhere
Tying back into the accessibility and convenience, the simple fact that you can use Cloud accounting tools like Xero bookkeeping from anyone is one of its greatest benefits. You can be on any device, on the phone, laptop, PC or tablet. You can be in your office, your home, in a café, or even away on vacation and it’s accessible so long as you have the right login credentials. It’s perfect for the business that’s always on the move or is looking to rely on remote workers. Multiple teams from across the country can collaborate together on the same account with no issue.
🔥Top 7 Cloud-Based Online Accounting Software in India for 2020 :
1. Realbooks
2. Reach
3. ZOHO BOOKS
4. Quickbooks
5.Profitbooks
6. Zipbooks
7. Alignbooks
Tying back into the accessibility and convenience, the simple fact that you can use Cloud accounting tools like Xero bookkeeping from anyone is one of its greatest benefits. You can be on any device, on the phone, laptop, PC or tablet. You can be in your office, your home, in a café, or even away on vacation and it’s accessible so long as you have the right login credentials. It’s perfect for the business that’s always on the move or is looking to rely on remote workers. Multiple teams from across the country can collaborate together on the same account with no issue.
🔥Top 7 Cloud-Based Online Accounting Software in India for 2020 :
1. Realbooks
2. Reach
3. ZOHO BOOKS
4. Quickbooks
5.Profitbooks
6. Zipbooks
7. Alignbooks
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