So what exactly is cloud accounting software? And why should you subscribe to a cloud-based accounting software rather than having something conveniently installed in your computer?
For starters, the term “Cloud” refers to services or accounting software in this case that are only accessible through an internet connection. Users are given access to accounting software running in the provider’s remote server and all information is also stored in provider’s servers.
Cloud Accounting Software Advantage
Better, Bigger Data Storage
This wouldn’t be an issue for small businesses that don’t require huge amount of data storage. But when you’re business runs across the globe and performs thousands of transactions a day then having a robust data storage solution is crucial.
Next there is the case of having dependable data storage. Cloud-based accounting software providers spend millions in infrastructure and equipment. This includes multiple servers and redundant data storage. Which could not be said for small businesses or mom-and-pop shops that rely on a single desktop or laptop.
Access on the go
Cloud accounting software only requires a reliable internet connection for access. This enables end-users to view information and run the software from any internet-connected device. You no longer are constrained to the confines of your office or the available equipment you have. You could use a variety of devices such as laptops, tablets and even smartphones.
Multiple users
Share information among your team or set authorization protocols to control user access. Cloud accounting software allows easier access and collaboration with your accountant. You accountant for example could use your financial information for tax purposes without asking you for specific data. Users could work independently and collaborate with team members without the need for creating an office network or purchasing additional equipment.
Reliability
Cloud accounting software services live and die on its reliability. The chances of your laptop or desktop breaking down are higher compared to cloud-based services going down. Reliability is ensured by redundancy in equipment and maintaining a professional workforce.
Updates and Upgrades
Scaling your accounting software capabilities is easy. Just enroll in a new service and all features are immediately accessed. Software are constantly upgraded to improve certain functionalities. Cloud accounting software eliminates the need for installing new programs or constant upgrades to your system.
Downside of Cloud Accounting Software
Requires an internet connection
Its greatest advantage could also be its weakest point. This might have been a nagging problem in the past but internet services has become a part of our lives like electricity that the chances of it going down are small. One solution for this scenario is to enroll with multiple internet providers. Thought this can be costly and only recommended for large companies that could afford it small businesses could also consider this option.
Subscription based
Cloud accounting software are run through servers and to get constant access to this service a monthly or yearly subscription is required. That would entail continuing commitment and could present itself to be a burden for small businesses.
Left at the mercy of your provider
Imagine the horror of finding your cloud accounting software provider suddenly closing shop. The possibility of this happening is definitely remote but the thought of this can be disturbing.