Financial management and accounting are a make or break for any business. The fact of the matter is that it doesn’t matter how much money you make if you don’t manage it well. Millions of dollars in revenue mean nothing if a company misappropriates it all the time and spends money without any system in place. That’s where accounting comes into the picture.
And as accounting practices evolve over time, there’s one factor in the middle of some of the best finance trends today: cloud accounting, a new form of accounting software that allows you to access, edit, and update accounting records anywhere at any time.
Now that accounting professionals and businesses have the power of cloud-based accounting software, your business can now ramp up its efforts to improve financial management in an organization.
In this article, we look at the developments in cloud accounting that make it the future of accounting as a whole.
Benefits of Cloud Accounting
So why should an accountant, accounting department, or organization as a whole embrace cloud accounting? Mainly, it’s because cloud accounting systems have a lot of benefits that you won’t be able to enjoy in non-cloud options. Here are some of the compelling benefits of cloud accounting.
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Better Accessibility and Mobility
One of the most important cloud accounting benefits is accessibility and mobility. Around 37% of accountants worked remotely in the United States alone in 2021. As the world shifts into a more flexible reality, accountants will need more flexibility to work wherever they are. With cloud-based accounting, that’s made possible.
Not only do accountants and accounting staff benefit from this. Every employee of the team benefits too. After all, all staff members have to submit sales reports, expenses, receipts, and other financial records and information. Now, with cloud accounting, you don’t have to be in the same physical space in order to do that.
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Better Collaboration
With more accessibility almost always comes better collaboration. Sending or accessing financial data is a whole lot easier when it’s stored in the cloud for any authorized personnel to check. When financial records are stored in the cloud for team members to access, it speeds up accounting processes by making data exchange, updating, and reporting more convenient for the whole organization. This will result in better collaboration in financial departments and inter-department dealings too.
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Lesser Errors and Discrepancies
To err is human, as the old saying goes. It’s virtually impossible for any human accountant to avoid errors in accounting and finance, no matter how skilled they may be. But with cloud accounting software, those errors can be minimized even to an insignificant level.
Cloud accounting software provides companies with all kinds of automations to lessen and remove errors in computing and reporting. Some of those automations include:
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Data entry;
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Financial computations;
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Currency conversions;
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Payroll management;
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Bank reconciliation;
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Tax compliance;
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And so much more.
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Time and Money Savings
82% of accounting professionals say that companies are more demanding nowadays. Accountants spend a lot of time keeping up with that demand. Accordingly, companies end up paying for those billable hours.
With accounting tools that help automate processes and streamline accounting systems, financial activities become less taxing, saving time and money in the process. Moreover, because cloud accounting software helps avoid more errors and discrepancies, it also results in more cost and time savings. That’s because lesser errors mean less time correcting them and fewer deadweight expenses having to compensate for those errors.
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Better Security
Data security is becoming a bigger issue in the digital normal. While some companies might depend on other cloud-based solutions like spreadsheets and file sharing, there are lesser assurances that these data won’t end up in the wrong hands.
That’s why getting the best cloud accounting software is so crucial for companies. These solutions often have excellent security measures to avoid hacks or data leaks. Some checks and balances avoid data leakage or spillage by providing decision-makers more control over who gets to see what information.
Top Features to Look for in Cloud Accounting Software
If you know the benefits of cloud accounting and you’re looking for the right accounting software for your company or business, it’s important that you know the top features to look for in a good solution. So here are the top features that most accountants and businesses look for in cloud accounting systems.
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Real-Time Financial Dashboards
One of the most important features of cloud accounting software is an easy-to-use financial dashboard for team members to keep track of all financial records. This dashboard might include tables, reports, and graphic representations of income, expenses, taxes due, cash flow, monthly net income, and so on.
A good dashboard should be easy to navigate and understand. The point of these dashboards is to make accountants' and other team members’ work easier. A non-friendly experience will only hinder that goal. A good financial dashboard will also update in real-time as multiple people might add new records and updates.
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File and Records Storage
Another of the most important cloud accounting features is a file storage system for financial records. These files can include invoices receipts, tax filing documents, business registration, employee and client banking details, etc. Financial information is undoubtedly sensitive. So it’s crucial that file and records storage facilities have adequate cyber security.
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Reports and Information
Accounting software can and should also have analytics and reporting— a way to visually present the most important financial details as a summary. These reports can be used in making important financial decisions— such as updating budgets, cutting expenses, improving sales efforts, and so on.
A good cloud accounting software will have a report and insights system that teams and organizations can customize to meet their contexts.
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Integrations With Other Tools
Good accounting software will also integrate with other systems, including payroll and HR systems, enterprise resource planning software, and project management tools.
A good example of this is how the project management software Polaris PSA integrates with accounting tools like Xero, Quickbooks, Sage, and so on. This enables features and functions, such as providing more detailed project billing, logging project expenses, computing hours worked by staff, and so on.
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Accounts Payable and Receivable
Cloud accounting software with accounts payable and receivable systems also adds a lot of value to accounting departments and professionals. It makes it easy for organizations to collect payments from service clients and make payments to employees, suppliers, and vendors.
Crucial to this feature will be different payment gateways so that clients can easily pay their dues through their preferred gateway— credit card, bank transfer, e-wallet, and so on. Your cloud accounting software should also have a way to collect payments and make transfers to a designated account.
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Tax and Compliance
Lastly, a cloud accounting system should also have a way to track and manage tax compliances, including computing tax dues and reporting deductibles to a tax governing body. Some accounting systems even allow you to submit returns online and populate company accounts automatically with set automation.
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Cloud Accounting Pushing Business Forward
94% of accountants have now implemented cloud accounting. As cloud accounting becomes the new norm for accounting practices worldwide, it will continue to push businesses forward by providing streamlined processes for financial management, insights, and decision-making. By jumping on that trend, you put your business on a trajectory toward better financial practices within your business.
