Cloud Accounting

The traditional system of accounting involved software installed on a desktop or laptop with little to no remote access or integration. The new trend is a shift away from the one station operation to an online portal that is accessible from anywhere. The internet-based application provides vital information from virtually anywhere and can be integrated with various modules such as payroll, invoicing and budgeting. Typical features of these new systems include:

1. Integration with financial accounts – information from your bank accounts can be imported automatically without the burden of manual input or transfer.
2. Quick invoicing – allows the user to prepare, email the invoice, accept online payment and update the system once payment is received.
3. Expense tracking – importing banking information, credit card transactions or even photos of the bill will update the appropriate records and budgets to reflect the up to date figures.
4. Collaboration – aside from up to the minute bookkeeping, your accountant will be able to access your records at any time. Advice in a timely manner with reliable and current information would add substantial value for decisions that have to be made in a shorter span of time.
5. Security and updates – the information is kept remotely and thus is not subject to the power outage or any other event that could affect the local workstation. Because the software is hosted online, it can be updated instantaneously for any corrections or rate adjustments.

There are some drawbacks to the system as well, such as reliance on the third party provider to maintain your records. Depending on the provider, the data could be stored outside of the country and subject to foreign laws with regards to security and privacy. Another issue is the ability to access the information. The data is hosted online and therefore the Internet connection has to be of sufficient speed and reliability to ensure that the application is used smoothly. There is definitely some benefits to using cloud-based accounting however you have to ensure that the setup will meet your needs adequately.