In the last few years, more accountancies have introduced cloud-based accountancy into their practices.This sees the use of accountancy software that is hosted on remote servers instead of it being hosted internally onsite. This is one of the key distinctions between cloud and traditional accounting. As there is no longer the need of a local hard drive, one of the main benefits for why cloud-based accounting is becoming increasingly popular is because it allows for data and information to be stored and accessed online at any time. As it is hosted on the cloud, it also means it does not require anything to be installed on computers and updates to software are made as soon as they are available. Another advantage compared to traditional accounting is that there is less risk of losing information as data on the cloud is automatically backed up regularly.
One of the early adopters in the UK for cloud based accountancy was Norwich accountants, Farnell Clarke. Partnering with Xero, one of the leading suppliers of cloud accounting software, Farnell Clarke have been awarded a Most Innovative Practice by the British Accountancy Awards.Part of the reason for the success of cloud-based accountancy for accountants and their clients is because business owners have recognised the improvements it provides in streamlining their accounting processes in their day to day business activities.
For the entire workforce, whether it is the accounts department checking invoices, a sales representative providing their expenses or the owner requiring to review financial figures, by using the cloud and being able to connect online at any time, tasks can be handled remotely by all. This is one of the key reasons for why many industries have initiated cloud-based operations as it allows for business owners and employees that require easy and simple access to their accounts frequently to work agile and effective.
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Additionally, another area that has had an important impact in using the software is that whenever accounting actions are made, businesses can see these changes reflected immediately in their account in real time. Business owners now have instantly updated financial information about their company. With financial information right at their fingertips, for fast-moving industries with the need to respond to business changes quickly, this is of high importance to work dynamically and effectively with their finances.
As well as benefitting business owners and employees, another aspect that it will help for improving the efficiency of accounting processes, whether it is national or international, for businesses with multiple offices as it permits for all of them to access the same data across the board at the same time. This multi-user access means working together has been made simpler and with the explosion in the use of portable smart devices such as smartphones and tablets in the day to day business activities, never has getting access or keeping connected with accounts and finances been easier for businesses. This has proven particularly beneficial for workforces that are required to work mobile or on the regular on the road such as sales teams.
A frequently asked question when a business is considering whether to use cloud based accountancy or not is whether their information and data will be safe and secure. With the increasing awareness about cyber threats, it is vital that businesses feel reassured their sensitive data, particularly financial details, will be protected. Many developers of cloud-based products recognise this and develop their products with the strictest of security measures. Cloud accounting is a secure method and in some cases, an even safer process compared to traditional accounting. For example, with traditional accounting, information is hosted internally, and on company computers, if this is stolen, the data can also be taken. Cloud accounting does not have this same risk.