In this day and age, no business setup, whether a startup or an enterprise, is oblivious to the word “cloud.” Ever since Eric Schmidt, the CEO of Google, introduced the term cloud computing in a conference in 2006, cloud has only been traversing in an upward trajectory.
Various service providers have established their reliance in the market by offering secure cloud services to diverse industries at nominal rates. This is evident from the fact that Gartner predicts the public cloud services market to grow 17 percent in 2020.
The accounting industry, given the critical nature of the accounting process and its significance to an organization, was among the small faction that was a bit tentative to adopt cloud technology in its processes. However, over the recent past, accounting professionals have started realizing the capabilities of cloud computing.
Whether a sole proprietor or the owner of an accounting firm, here are some aspects of cloud that can help improve your accounting process.
The accountants spend a majority of their time behind a desk, crunching numbers. They have been awaiting an accounting solution that can offer them mobility to keeping working, even if they are not in proximity to their computers. How many times does it happen that you take a leave or are out on a seminar, and find yourself lagging behind in all your tasks?
By moving the accounting process to the cloud, you can access your accounting reports from any remote location at any time you desire. This results in the utmost productivity as you are never too far from your accounting and cater to the clients at their convenience without having to keep them waiting.
2. Work-Life Balance
Being an accountant is no easy task. As an accountant, you must sometimes feel that you are not able to find time for your family. However, there is nothing much you can do about it because the local office setup restricts your work to the office only. Plus, there is the time spent on commuting to the office.
It is one of the perks of cloud accounting that is not emphasized enough. It helps you to keep a work-life balance by eliminating all the unwanted hassles from your daily routine. As you can work remotely from your home, there is no need to put in those hours for commuting. This helps you spend more time with your family, reducing mental stress.
3. Data Centralization
One of the most critical aspects of accounting is the financial data and reports that help companies make vital business decisions. Conventionally, this data is stored either on your local systems/laptops, or local servers. Either of the options is vulnerable to hardware malfunctions and corruption, which can lead to unrecoverable data loss.
However, with cloud technology, all the data is stored in a remote centralized location (generally in secured data centers). Hence, even if your laptop gets stolen or broken, the data is still secure. You can just pick up any other device and start working on your accounting tasks by accessing the cloud through the Internet.
Another challenge faced by accounting professionals on a daily basis is the flow of information within the organization. The accountants need to be updated with the financial data and collaborate with their clients and colleagues regularly.
However, most firms still use the conventional mode of sending/receiving data – emails. This leads to long threads of emails with the same file being sent to and fro, leading to multiple versions of the same file.
Cloud offers an improved collaborative option as multiple users can be given access to the accounting files at the same time. Your colleagues can edit a file simultaneously, irrespective of their location. Hence, it eliminates the multi-versioning of files. Moreover, you can also share files with your clients easily by giving them access to the cloud accounting portal.
5. Cost Reduction
Any accounting process involves a combination of applications such as the main accounting software, other complementary apps like CRM, Office suite, etc., and the entire financial data. To install these apps and store data, a high-end hardware setup needs to be deployed in the local premises. Moreover, you must have experienced that your systems need to be updated regularly, once you deploy more applications, or the data gets full.
Opting for cloud services helps you save both the capital and operational costs. The cloud provider hosts your accounting process in its cloud environment, so you do not need to purchase expensive equipment for your office. Furthermore, as the provider owns the hardware, the tasks of maintenance, upgrade, and setup of the IT infrastructure is also their responsibility.
6. Device Compatibility
In the traditional scenario, since your accounting software is installed on the local system, you are restricted from using the software on that system alone. Moreover, some applications can be installed only in a particular operating system. For instance, a Windows-based application may not be compatible with Linux.
However, with cloud technology, you can access your accounting process through multiple devices like your smartphones, laptops, and tablets. As the accounting process is hosted on remote cloud servers, the operating system of the end-point device does not matter.
7. Scalable Environment
Hardware scalability refers to the scenario where you can use the server resources like RAM, storage, and processing power according to the current business requirements. However, in your local systems, this is not possible. You buy a piece of hardware, and when it becomes outdated, it needs to be replaced. This adds to extra expenses and effort.
Cloud, on the other hand, is a highly scalable platform to host your accounting process. You can ask the hosting provider to add/remove the users and server resources as per your requirements. For instance, during the tax season, you can add more users to the accounting process as there is a requirement of the additional workforce. You can revert back to the previous settings once the tax season is done. The cloud provider charges you as per the resources you are using, so you do not pay a penny more.
8. State-of-the-art Infrastructure
Setting up and maintaining the IT infrastructure has been a major challenge for all accounting firms over the years. Apart from the hardware setup, there is other supporting equipment that needs to be installed for the local systems/servers to function optimally. It includes cooling, cabling, as well as power equipment. The energy costs required to power these are also significant.
However, most competent hosting providers build their cloud setup in state-of-the-art data centers. These data centers deploy multi-redundant infrastructure, which means there is a backup for all the equipment setup like cooling and power, along with the servers.
Hence, even if one piece of equipment fails, there is another to take its place. Moreover, the data centers have multiple levels of access, including retina scans, ID cards, biometric, etc., to prevent any unauthorized access in the facility.
9. Advanced Security
With the rise in data theft and phishing scams in recent years, it is a time where the accounting faculty needs to be extra cautious. Recently, the IRS warned the taxpayers of the coronavirus-related scams that have been surfacing since the pandemic. External threats such as ransomware, phishing emails, DDoS attacks, man-in-the-middle attacks, etc. are a constant threat to the financial data. Deploying such an advanced security infrastructure in the local premises can be unfeasible in terms of budget and maintenance.
The cloud hosting providers offer protection to all the known security threats by implementing security measures like end-to-end encryption, multi-factor authentication, Intrusion Detection and Prevention Systems (IDS/IPS), IP restrictions, DDoS prevention, brute force attack prevention, anti-malware, and antivirus, among others.
Moreover, to prevent any unauthorized access, the providers have access control policies in place, wherein you can set specific roles and permissions to the users. Hence, you can give/block access of a file to specific users.
10. Automated Data Backup
Whether invoices, bills, or receipts, every piece of document is vital to the accounting process. You can install a backup server in your office as a preventive measure to safeguard your data. However, it leads to the requirement of additional office space and costs. Moreover, any unfortunate accident on your premises will cause damage to both the main and backup servers.
With cloud hosting services, however, you get an automated backup service, where the providers backup your data automatically on the cloud. In addition, there is no storage restriction to the amount of data you can backup. As your storage needs escalate, the backup solution gets updated as per your requirement.
11. Expert Support
Do you have a dedicated IT team in your office? How often do you call them to resolve the IT-related issues? Any IT setup is bound to have issues related to the applications, network, or hardware. However, it is quite heavy on your pockets to deploy a 24*7 IT team in your office. Moreover, the escalation matrix should be efficient for all your issues to be resolved in time.
Most competent cloud hosting providers offer round-the-clock customer support. You can contact their customer support executives who guarantee a swift response time. Customer support is a vital parameter to distinguish between the good hosting provider from the best ones.
12. Business Continuity
For every company, it is imperative to ensure continuous accounting operations. However, it is unlikely in a local IT setup. You would have to create an IT environment with fault tolerance and redundant hardware. The hardware should have optimum resources and processing power to handle the workload without affecting the performance.
But most importantly, you should be well prepared for all the threats that could hamper your accounting process. This calls for a dedicated business continuity team with an extensive IT setup spread geographically.
With a robust business continuity plan in place, cloud hosting providers ensure continuous accounting operations. The plan involves proactive measures to identify and prevent all the risks and crises that could cause an interruption in your functioning. For instance, if the area is susceptible to floods, a level of risk is assigned to it, and a plan is created to ensure all-time availability during the same.
13. Disaster Recovery
Let us assume that you have deployed an advanced infrastructure in your office with all the above-mentioned equipment and safeguards. If a piece of hardware malfunctions, there is backup hardware that takes its place. However, what will happen if there is a disaster in your area and the entire facility becomes non-operational?
A cloud hosting provider that implements disaster recovery is the solution to this challenge. Disaster recovery is achieved by replicating the entire accounting process in an identical cloud server situated in another distant data center. Hence, even if a data center goes down due to a disaster, the entire process is still safe in another data center.
Any accounting software, no matter how extensive do not require high system specification for its functioning. However, no accounting process can be completed without other complementary applications required to accomplish tasks like time tracking, data management, customer management, among others. When all these applications are installed in a system, its performance tends to degrade. Added to it, the data storage requirements keep on increasing constantly.
To overcome the challenges of performance, the cloud providers build a High-Performance Computing (HPC) cloud environment. HPC enables parallel processing of applications, which means that you can run any number of applications simultaneously without any lag.
15. Remote Hiring
The hiring and recruitment process is vital to any business. You need skilled accountants to take care of your finances. However, recruiting accountants is often restricted by geographical barriers, as most do not want to relocate to a different city.
With cloud technology, as the accountants can access the data remotely and work from any remote location, it becomes convenient to hire skilled professionals from any part of the globe.
Cloud technology is a complete package of all the features required to optimize the accounting process. The cloud providers offer a pay-as-you-use pricing plan, which makes you use only for the resources you utilize on an hourly or monthly basis. Hence, small businesses with insufficient funds can also benefit from the services of the cloud. Moreover, you also get a free trial for the cloud services, which let you make an informed decision.
With the little to no downside of cloud, more and more businesses are moving their accounting process to the cloud. Are you one of them yet?