Before cloud computing, bookkeeping was sometimes considered separate of accounting. Some people saw bookkeeping as limited to recording transactions in journals and then posting amounts to accounts in ledgers, after which an accountant would take over to adjust entries, prepare financial statements and more.
The dividing line has become blurred due to the adoption of computers and accounting software. In 2014, International Data Corporation reported that the cloud software market saw nearly $50 billion in revenues; with expansion projected to continue at a compound annual rate of 18.8% through 2019. Where mid-market businesses and enterprise corporations once had bookkeepers and accountants, many have shifted to a single accounting department with title-agnostic accounting staff that process everything using a single accounting software.
That being said, “cloud bookkeeping” is now really just another way to say “cloud accounting.” Cloud accounting differs from traditional accounting and does away with the “write-up” model of traditional bookkeeping for maintaining your financials. All of your “bookkeeping tasks” – recording transactions, posting amounts, etc. – are done through cloud accounting software.
4 Key Benefits of Cloud Accounting Software
With cloud accounting software, all your financial records are created, updated, manipulated and stored in real-time in the cloud. When you pull reports, you can trust knowing your data is as up to date as possible – across departments.
Since your financials are stored in real-time in the cloud, if you unexpectedly experience downtime (such as internet or power failure), you can move off-premise to access your data again from a different wireless connection using another desktop, laptop, tablet, or phone.
Productivity & Automation
Since your financial data can be accessed from anywhere on any connected device, you can be productive on the go. This can be a huge benefit, especially for professionals who travel frequently. It also opens your business up to a telecommuting workforce, or a supported multi-entity expansion. Additionally, cloud accounting software allows you to automate tasks based on workflows and user roles.
While not strictly cloud accounting, Microsoft Dynamics 365 is an ERP software that streamlines collaboration between departments. Connected visibility across distribution, customer service, sales and marketing, as well as a centralized financial management system, gives you better control over your entire operations. Everyone will have access to the real-time product and customer information they need to drive growth.
Cloud accounting software isn’t perfect. It’s still vulnerable to internal human errors and hackers. But everything has its own set of risks, and by taking the right internal control and cyber security precautions, you can minimize issues.
In our experience, the benefits of cloud accounting software outweigh the cons. While not the right solution for everyone, it’s ideal for mid-market businesses looking to expand or scale. If you’re ready to grow your business and need help with resource planning, contact us to see how we can help you transition to using Intacct or Microsoft Dynamics.