If you’re wary of using a cloud-based accounting service, you’re not alone. Though a steadily increasing number of small businesses are integrating cloud technology into their setups, a few entrepreneurs are still holding out. Most of them are doing so because they don’t fully get what the cloud actually is—and that’s completely understandable.
Using enigmatic commercials and fancy infographics, the marketing departments of major corporations—IBM, for one—have certainly muddled the word’s meaning. As a result, some small business owners don’t really see the how the ethereal, ever-changing concept can help them, and are left doing things the ‘old-fashioned way’; they manually reconcile bank statements, compile physical receipts, and spend more money than they should on a brick-and-mortar accounting department. In other words, they’re languishing in inefficiency when they don’t really have to.
Despite the confusion about what the cloud is, cloud-based financial applications can benefit small businesses tremendously. They are playing an ever-increasing role in how entrepreneurs do their books. Learning what the cloud and cloud-based applications are can help you decide if migrating your bookkeeping to the cloud is right move to make for your business.
What the Cloud Actually Is
Picture this: a bright white cloud ringed by a halo of luminescent sunlight, bits and bytes of data bouncing on its fluffy folds, ordering themselves into neat rows. Now forget it. Imagining ‘the cloud’ as, well, a cloud is confusing, and far from what it really is.
The cloud is less ethereal and more physical; it’s a network of servers, computers dedicated to sending, receiving, and storing information. These computers can also run services that people, most often businesses, use to increase efficiency and save on operational costs.
What is a Cloud-based Accounting Application?
A cloud-based accounting service is actually software. Similar to a program you’d use on your own computer, running on one or more remote servers. You connect to the software by opening up a browser on your laptop, or an app on your phone. When you’re ready to upload financial information, like daily expenses or new employee data, you can do so anywhere there’s an Internet connection, at any time. The accounting software sends your information to the one of these remote servers, where it’s processed and sent back to you.
Using the Cloud to Your Advantage
You can use cloud-based accounting applications yourself and increase the efficiency of your business right off the bat. Another option—one many small businesses are picking up—is using the cloud to outsource your bookkeeping to a virtual accountant, professionals who know bookkeeping and cloud-based applications like the back of their hand.
Outsourcing your bookkeeping makes integrating cloud-based accounting into your business even easier, and opens up more options. You can upload raw information—like inventory receipts, business expenses, billable hours. You can also have your financial data processed, analyzed, and maintained by a knowledgeable professional for much less than it would cost to hire a brick-and-mortar accounting department. The end result? You can spend less time worrying about your finances, and more time on growing your business.
4 Benefits of Cloud-based Accounting Services
Now that you have an understanding of what the cloud and cloud-based applications are, check out 4 ways cloud-based accounting services can benefit your business:
- Portability. Access your information anytime, anywhere there’s an Internet connection.
- Customization. Cloud-based accounting software is customizable, offering easy integration with 3rd party business apps. For example, Xero has add-ons for business apps from WorkflowMax, bill.com, ADP, and more.
- Immediate, real-time access to upgrades and bug fixes. You won’t have to spend time keeping your accounting software up-to-date, or staying on top of the latest security patches to keep your information safe.
- Data backup. Your financial information is constantly backed up to a remote server. So you don’t have to worry about losing important data.