More and more small businesses are using cloud technologies for their accounting systems. But before we get to what cloud accounting is, we should start with what is a cloud? “Cloud” helps you access data and software from anywhere and anytime. It is the central hub where your data is stored. For example, our online banking data can be accessed anytime, anywhere via the cloud.
This brings us to what cloud accounting is. Basically, your workbooks are kept in an online accounting system. Cloud accounting “software” gives you access to all your documents and data from anywhere, making it very valuable for teams working virtually. Many businesses are turning to cloud accounting for collaboration, a secure place to store data, and the flexibility to be desk-bound. Cloud accounting is done online and there is no need to install software on a desktop or manually maintain books and records. Cloud accounting works by being hosted on a secure remote server instead of your office or business premises to support small business bookkeeping.
Talk to an accountant near me to understand more.
All records of income, expenses, liabilities, and assets are sent to a remote server. It is processed through this server and then sent back to you when you need to access it. This information is encrypted, similar to a bank so that it is only accessible to those who have a login and password to access this information. Cloud accounting is also cheaper than its traditional counterparts, which may also require less maintenance than traditional desktop accounting software (updates, additional backups, etc.)
What is a cloud accounting system?
Cloud accounting systems are programs/software that you register yourself with. Choose the plan that best suits your needs and then you can enter all your financial transactions. The systems securely store all your financial data. Some examples of cloud systems are QuickBooks Online and Xero. They are known to support small business bookkeeping. There are many benefits for businesses starting with or transitioning to cloud accounting. Of course, this is an easier task for new businesses as it can be as easy as registering. For established businesses, this may take a little longer as you want to ensure that all data is imported into the online cloud accounting program and important data is not lost.
Talk to an accountant near me for help. All tax accountants in Toronto would agree to hire an accountant and take the help of cloud accounting software for bookkeeping.
What are the benefits of cloud accounting software?
Cloud accounting systems are programs/software that you register yourself with. Choose the plan that best suits your needs and then you can enter all your financial transactions. The systems securely store all your financial data. Some examples of cloud systems are QuickBooks Online and Xero. There are many benefits for businesses starting with or transitioning to cloud accounting.
Of course, this is an easier task for new businesses as it can be as easy as registering. However, for established businesses, this may take a little longer as you want to ensure that all data is imported into the online cloud accounting program and important data is not lost.
1. Automatic data synchronization in real time
Automation capabilities are vital to the journey of many businesses that are growing and operating virtually. Up-to-date data is essential for smooth and efficient work. Automatic synchronization also saves a lot of time by reducing exchanges between accountants and customers by receiving updated data in real-time. You can also view your current financial situation at any time.
2. Scale and pay as the business grows
Most software is easy to subscribe to, but if you’re just starting out, you might not want to invest a lot of money. You can start with 10-50 transactions per month, but as you grow, so do your numbers. Suddenly your numbers jump to over 5000 transactions per month. Your cloud accounting software should be able to expand as your numbers grow. Cloud accounting software helps you pay only for what you need and increase your plan as needed. This includes adding users to increase storage space and finally adding advanced features when you need them.
3. Access for multiple users
Your team can access the software simultaneously from different locations. A tax accountant in Toronto would also agree that it helps when preparing yearly tax returns.
4. Paperless environment
In our current climate, companies are taking a more progressive stance on the environment. Using cloud systems helps a business go paperless. This way, businesses will not have to store and manage paper documents, and by eliminating the need for paper, you save costs, save office space and help the environment.
5. Cost reduction
Traditional software often requires updates, maintenance, and assistance from system administrators. If you decide to work with a cloud system, you do not have to pay the costs associated with these updates.
6. Integration with other cloud accounting systems
Many systems are moving to cloud systems by choosing to use a cloud accounting system. You open portals to integrate with many other systems by creating a technology stack.
7. Simplification of tax obligations
Cloud accounting software will let you know how much tax is owed to the CRA. How much you have paid so far and how much is left to pay? It makes it easy for you to fill out your information so you know exactly where your taxes are. Any tax accountant in Toronto would agree.
Is my financial data safe in the cloud system?
Reach out to an accountant near me and they would agree. Cloud systems offer first-class security. No one can access your data without logging in. Your financial data is stored online on secure servers off your computer’s hard drive. Another way your data is safe is in the event of a natural disaster. With all your data stored in the cloud system, there is no downtime to retrieve information because nothing is lost. You can also provide different levels of access to the users who have access to your information.
The future is with cloud accounting. Systems are constantly being updated and changed. New technologies are developing and more and more companies are turning to virtual headquarters. Schedule a consultation with Webtax Online to learn more about cloud accounting services and how they can help you and your business.
Need help with small business bookkeeping? Talk to us.