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12 Benefits of Cloud Accounting Software for your Business

Cloud accounting software helps businesses of all sizes utilize the industry’s leading software solutions with little overhead and in-house technology. Even if you hire an accountant to help manage your books, cloud solutions can help make the process faster and more cost-effective for you.

What is Cloud Accounting?

Over 38% of companies use the cloud in their daily operations. However, this figure is likely higher as more companies incorporate software-as-a-service (SaaS) into their business to streamline operations.

When defining cloud accounting, it’s best to break down the definition into three essential parts:

  • Software hosted on remote servers
  • Data sent to the cloud
  • Accessible through a web- or app-based systems

Cloud accounting makes sense for businesses that don’t have the capital to make large in-house expenditures for their accounting needs. The software is hosted on a third-party system, so there’s no upkeep or maintenance on your end.

Remote teams can access your cloud-based accounting software to manage your business’ finances.

12 Benefits of Using Cloud Accounting

Cloud solutions for accounting make it easier to manage your business accounts from anywhere in the world. A few of the many benefits of transitioning to the cloud include:

  1. Accessible Anywhere, Anytime: Business owners can quickly log into one of the accounting solutions they use and instantly access their financials. Run reports, make smarter business decisions, and do it from any Internet-connected device from around the world.
  2. Always Up-to-Date: When you choose the cloud, the provider handles all of the system updates for you. As a result, you never need to update the software to meet new tax code requirements. Instead, the software updates behind the scenes to make sure you leverage tax deductions and financial management accurately year after year.
  3. No Upfront Equipment Costs: Traditional software requires businesses to make upfront capital expenditures to run the software properly. Since you’re paying a cloud provider, they handle all of the server setup, maintenance, and backups. You simply pay one low fee.
  4. Automate Workflow: You can set your system up to manage your entire accounting workflow. For example, you can send out automatic invoices each month, or ensure that a vendor you work with is paid on time every month.
  5. Improve Your Business’ Accounting Accuracy: Accuracy relies on consistency. When one solution is used for your transactions and workflow, it’s easier to rely on accurate reporting. Plus, you’ll be able to say “goodbye” too tedious excel sheets that only make sense to the person that first made the sheet.
  6. Collaborate Across Teams and Professionals: Grant access to your accountant, payroll provider, and others to make collaborating easier than ever before. Elaborate control systems enable you to refine what data individuals have access to about your business. Don’t want a user to access anything but your payroll data? You can set rules to ensure that the user can only access payroll and no other pertinent financial information.
  7. Say Goodbye to Paper: Holding on to your tax returns, invoices and other paperwork for seven years can create a cluttered mess. When you use the cloud, you can store most of your essential documents directly on the platform. Add in your invoices, receipts, and other documents.
  8. Backups Made Easy: Ensuring that you keep records of important documents and files is necessary for every business. Cloud accounting software providers often offer backups of your files so that they’re never lost if a system becomes corrupted, hardware fails or a natural disaster strikes. Large providers have the resources to create a redundancy plan that smaller businesses don’t have the resources to implement.
  9. Outsourced Support: Businesses use the cloud for many reasons, but one key reason is that support is the cloud provider’s responsibility. You don’t need to have an in-house support team, further lowering the costs related to your accounting software needs.
  10. Software Beyond the Basics: Cloud solutions don’t just handle your books. You’ll find solutions that allow you to send quotes and estimates, enter bills, upload receipts, claim expenses and even track accounting projects. Many platforms automate much of this work by connecting directly to your bank.
  11. Customize Solutions to Your Needs: Depending on the platform you choose, it may be possible to customize your dashboard for easy, at-a-glance overviews of essential business data.
  12. Top-of-the-Line Security: Cloud accounting solutions offer world-class security and routine monitoring to ensure that your data remains safe. Compared to in-house software, the cloud provides substantial increases in security to keep your business’s most important data safe and secure.

Working on the cloud does have a slight learning curve, but once you learn how to use the platform properly, it offers substantial benefits when compared to in-house software setups. You also have numerous solutions to choose from.

Top 3 Cloud Accounting Software

Cloud-based accounting software needs to meet your unique in-house accounting needs. A few of the largest providers in the industry include:

  1. QuickBooks Online
  2. Xero
  3. Freshbooks

We prefer using QuickBooks Online because it’s the more refined solution that works for 99% of our clients. However, all of the solutions above offer cloud accounting solutions that are designed to help make handling your books easier.

Getting Started With Cloud Accounting

Your technology setup is crucial to maintaining your books and managing your own accounting needs. Most cloud-based accounting software will offer a demo and have extensive information on getting started with their platform.

However, learning one-on-one how to utilize your software more efficiently is easier for many of our clients.

We can help make the transition to the cloud simple and easy for your team. We’ll help with the tech setup and can even help you learn how to utilize your chosen cloud solution’s features more effectively.

Final Thoughts

Cloud accounting is growing in popularity as more businesses continue to adopt cloud-based solutions in their day-to-day operations. While the cloud offers easy data transfer, management, and security, proper system setups are crucial to your success using the cloud.

Working with an accountant who can assist with the technical setup and review data every quarter is recommended.

Do you need help setting up your cloud accounting software?

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Levy | Lauter LLP - Tax and Accounting Firm in Los Angeles, CA

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