Businesses of all sizes have been revolutionized by the introduction of cloud accounting. Historically, businesses faced the dual challenges of not having enough time to do their accounting work or to keep it up-to-date.
Cloud accounting in Canada is a fairly recent development that has changed the way that businesses take care of their accounting. It offers multiple benefits and helps to improve business security while ensuring greater accuracy of financial reports.
What Is Cloud Based Accounting?
Accounting in the cloud is accounting that is performed using cloud accounting software that is hosted on remote servers instead of being housed within the company. It allows a company’s accountants to access their financial information, complete reports and financial statements, and to deliver them to the company no matter where it is located. This type of accounting allows companies to enjoy accounting capabilities similarly to Software as a Service. Financial data is sent by the business to the cloud where the accounting professional can access it, process it, analyze it, and return the finished reports and statements to the company. The functions are performed off-site instead of in the company’s business location.
Users can access their applications remotely via the internet. This frees companies from needing to install software on their office computers and allows employees in branch offices access to important financial information when they need it. This type of accounting also involves data backup and allows for disaster recovery, helping to protect the business’s accounting information.
How Does Accounting In The Cloud Work?
Over the past decade, there has been an increasing emphasis on the use of storage technology in the cloud. Businesses store information in the cloud instead of locally on a computer’s hard drive. The information is remotely stored on a server that is connected to the internet. Online accounting software in the cloud has likewise allowed companies to take advantage of cloud-based storage technology to improve how they track their finances.
Accounting in the cloud works similarly to other cloud-based business functions. Instead of storing financial information on a hard drive, businesses store the data online in a secure, cloud-based account. This helps to keep the information stored in an accessible way while remaining secure. The company’s accounting professionals can log in remotely to perform accounting services from their locations without having to travel to the business to go through paper documents. Cloud-based accounting allows accountants to complete their work and to deliver it quickly, allowing companies to keep on top of their financials at all times.
History Of Cloud-Based Accounting
Cloud-based accounting got its start after the development of the internet in the late 1990s. In 1998, NetSuite was introduced. This was the first cloud accounting software that was hosted on the web. Following NetSuite’s success, Microsoft created Microsoft Dynamics GP in 2001, which is a package of business accounting software.
In its beginning, cloud-based accounting was largely the province of large companies. Beginning in the late 2000s, however, new players began to emerge with targeted solutions for small businesses. This made cloud-based accounting more affordable and accessible for small businesses and allowed the accounting industry to assume a new role.
During the 2010s, the growth of cloud-based accounting has accelerated. It is no longer reserved for large companies and C-suite executives. Instead, cloud-based accounting is understandable, affordable, and accessible to all types of businesses and business owners. Accounting in the cloud brings a human touch to accounting and helps to make the lives of small business owners easier. With this type of accounting, business owners are now able to attend to the many tasks that they have with operating their businesses while allowing their accounting professionals to manage their accounting practices from afar.
The growth of cloud-based accounting in Canada has been facilitated by the explosion of mobile technology. Business owners can access their accounting information from their smartphones and tablets to quickly check on the status of their companies from anywhere.
Safety Of Cloud-based Accounting
Some business owners worry about the security of their data when they use cloud-based accounting services. However, storing data remotely in the cloud is much safer than storing it on the computers in your office. It is not safe to store valuable information on your computer because it could be lost or stolen.
When you store accounting data locally, there are two main problems. First, you will not have redundancy in your local storage. Financial data that is stored on one computer may be damaged because of viruses, flooding, fires, thefts, and other catastrophes. Second, local security tends to be weak. Data that you store on your computer can be stolen with ransomware. There are also threats of physical thefts by employees or external thieves.
When you move your accounting and financial information to the cloud, these issues are eliminated. Cloud-based accounting offers multiple backups so that your data will be protected. Cloud-based accounting also serves as a hedge against natural disasters such as floods, fires, fraud, and others. Even if a disaster strikes, your data will remain safe and secure with cloud-based accounting. You will easily be able to access your financial data to help your business get back to its operations following a disaster when you have stored your accounting information in the cloud with cloud-based accounting services.
Data centers that store financial data for companies in the cloud have round-the-clock security and strict controls for access. You can limit the parties who can access your financial information to your accountant and key employees at your business. This can help to prevent fraud and to protect the integrity of your financial data.
In addition to physical security at the data centers, they also employ sophisticated digital security. Moving to cloud-based accounting can prevent data loss and other problems that can occur from simple mishaps to intentional acts.
Benefits Of Cloud-based Accounting
Cloud-based accounting offers multiple benefits to businesses. Moving to the cloud allows you to connect to your accounting information at any time and from anywhere. Since today’s business environment includes numerous internet-enabled devices, accessing your data is simple with cloud-based accounting. Some of the benefits that you can enjoy by moving your accounting services to the cloud include the following:
- Lower IT costs
- Reduced operating costs
- Fewer delays
- Reduced errors
- Business continuity
- Up-to-date financial information
When companies move to cloud-based accounting, it can reduce the costs involved with maintaining their IT-based systems. They can rely on the resources offered by cloud-based accounting services instead of purchasing expensive equipment and systems to use in their offices. It can also help to reduce energy costs and help to prevent delays in receiving financial reports and statements.
Cloud-based accounting services are also scalable and can grow with your business. Accounting in the cloud also helps to free up your time so that you can concentrate on your business operations instead of on your business’s accounting tasks.
Cloud-based accounting also helps to ensure the continuity of businesses in the event of a disaster. Since the data is stored in the cloud, it will be protected and stored in a secure, safe location. When you can access your financial information quickly after a disaster, the downtime that you might otherwise face will be minimal.
Moving your accounting to the cloud also helps to improve your ability to collaborate more efficiently with your accountant. The cloud allows you to share information much more easily. If you have multiple locations, managers in each can input information to the bookkeeping and accounting program in the cloud that your accountant can then use to compile information, analyze it, and to create financial reports. The cloud provides a fast, secure way for your accountant to share reports with you.
Cloud-based accounting is also flexible. You can access the information at any time and from anywhere. If you need to access your information while you are away from the office, you can connect to the information quickly and easily with an internet connection. Finally, using cloud-based accounting services provides you with access to automatic updates. This can keep your online accounting software up-to-date so that you and your accountant can benefit from the latest features.
The Benefits Of Partnering With Ensight Cloud CPA For Accounting At Your Business
Most business owners have little time to manage their accounting practices and may not have the knowledge to do so correctly. Accounting in the cloud offers the ability for business owners to stay on top of their finances and to keep their data up to date so that they can know how their companies are doing at all times.
It can help to inform better decision-making in line with your company’s finances. Accounting in the cloud is said to be the future of accounting. When you work with us, we will meet with you to help you to set up your accounting services. Our accounting professionals will then be able to partner with you and deliver your financial reports quickly and efficiently no matter where your company is located. To learn more, contact us today to schedule a consultation.