In order to understand cloud accounting we first need to understand what is cloud. In simple terms, “the cloud” or “cloud computing” refers to the delivery of computing services via the internet. That may be storage services, data analysis tools, or – in the case of this article – accounting services.
In simple words,cloud accounting is a new way of accessing your accounting software from the web browser without actually installing it. It involves performing basic accounting tasks like managing and balancing the books,using software that resides in the cloud and is often delivered in an as-a -service model.Staff or third-party accountants can manage accounts payable,accounts receivable, the general ledger and much more within the application.
How Cloud Accounting Works
When a company implements cloud accounting software, it no longer has to set up individual desktops with software, since the staff can access the cloud through their own devices.
Additionally, this also enables remote teams or branches to access the same data and the same version of the software. This way business owners,accountants and other employees who are given access to the software can use it and perform tasks assigned to them. At the same time business owners and other employees can add the necessary documents and other files to the database. All these files and documents are safely stored to help the users access them and maintain them as per their level of rights to use the accounting software.
Benefits of Cloud Accounting
1. Automation
When bank accounts are connected to the accounting system, transactions are automatically imported in the books and no time-consuming data entry or manual imports is required. The automated bank reconciliation process in the cloud accounting software helps in matching bank statements and invoices to ledgers. This way books are completed quickly. Some accounting applications can also automatically pay vendors and send invoices to customers on user-defined dates.
2. Access anywhere in the world
As mentioned above, anyone who needs to access a cloud accounting software, requires an internet connection, web browser and login credentials. Technically the books can be accessed from any part of the world!
3. Reliable Security
Since all the data and files are stored on a digital location, it is absolutely safe and secure. Cloud accounting software, as well as cloud storage services, keeps your files in secure servers which can only be accessed by users who were given permission.
4. Cost Saving
Saving time is saving money. Cloud accounting automates some of the most time-consuming accounting processes. In addition, you also avoid the cost of setting up and maintaining your own server.
5. Simplifying Tax Compliance
Cloud accounting software lets you know the amount of taxes due to CRA. How much you have paid so far and balance amount payable is also automatically ascertained with cloud accounting. This makes compilation of information easier and simplification of tax compliance procedures for a business.
6. Latest Software Versions
When you login into your accounting platform in the cloud,you are always using the latest version of the software. There’s no need for time-consuming and costly updates – you just sign in and start working. Plus, you don’t have to be responsible for applying security fixes – your software provider will handle that for you automatically
The future is cloud accounting. Set up a consultation with us at Rav Bhatia CPA Professional Corporation to learn more about cloud accounting services and how we can help you and your business. Rav Bhatia CPA PC also offers a variety of other services to assist you with your financial needs.
Contact us for a free consultation now!