Cloud accounting is accounting data and software that is accessed online (like internet banking, for example). With cloud accounting access is available anytime from any device.
The four main benefits of cloud accounting software for business owners are:
- Access to real-time (daily) accounting data showing the business’ current financial position. This includes the business’ profitability, financial position, cash-flow, debtors, and creditors.
- Accounting data can be accessed and worked on by several users at the same time. This enables online collaboration between the business and the accountant and saves a lot of time (with a beneficial reduction or savings in accounting fees).
- Everything is run online, so there is nothing to install and everything is backed up automatically. Updates are free and instantly available.
- Upfront business costs are reduced as version upgrades, maintenance, system administration costs and server failures are managed by the cloud service provider.
A clear advantage of real time accounting data is that businesses access information to manage their business when they need it the most – that is, every single day. Real time data allows business decisions to be made very quickly and action taken straight away, so losses are minimized and profits enhanced.
A well know management proverb is that ‘what you don’t measure in business, you can’t manage’. Cloud accounting provides real time (daily) measurement of a business’s performance, so the owner can manage it effectively.