OUTSOURCING ACCOUNTING TREND: THE IMPORTANCE OF SHIFTING TO CLOUD-BASED ACCOUNTING
CANVA – Natee Meepian
Many years ago, accounting records were stored on a desktop, and managing day-to-day bookkeeping required someone to be in the office recording transactions, paying bills, and invoicing clients. Today, the accounting profession has advanced by leaps and bounds. It is anticipated that accounting is a dynamic field that changes constantly. Accounting developments today are influenced by automated, adaptable, and intelligent technology that is rapidly penetrating our lives. These advancements are reshaping the accounting and financial industry landscape. The traditional approach of managing accounting, bookkeeping, and finance-related operations has changed to modern accounting technologies.
Watch our video below or read the article underneath to understand more!
The consistent modification and development from manual methods to technological alternatives have made accounting more accessible and convenient for businesses. Cloud accounting is one of the accounting developments that has influenced the accounting profession. From using calculators to spreadsheets, firms are now embracing Xero and Quickbooks. Cloud accounting solutions appear to be a freight train driving through the accounting industry, transforming how accountants interact with their services.
Even before the pandemic, in 2019, nearly 60% of U.S. companies were already using cloud software to manage finance and accounting. Additionally, only 22% of businesses do not plan to take advantage of cloud finance technology in the future, down a few percentage points from the previous year. It suggests that most businesses today have already understood cloud accounting technologies as a tool for company success. They recognized the need to make the most of cloud accounting in order to thrive and grow in today’s challenging financial landscape.
If your company still uses traditional accounting (desktop software or spreadsheets for accounting), consider shifting to a cloud-based accounting
system. In this post, you’ll learn why cloud accounting is essential for your company, and we’ll walk you through the key benefits of moving to cloud accounting.
Cloud Accounting and its Benefits to your Business
If you’re familiar with traditional accounting software, you already have a basic understanding of cloud accounting. Cloud accounting provides the
same functions as traditional accounting software, except that it’s all done in the cloud. Cloud accounting is a system that can be accessed through the internet and uses software comparable to traditional software but is housed on remote servers. Accounting data/records are transported to ‘the cloud,’ which processes and returns it to the user. All application functions are performed online rather than on the user’s desktop. With cloud computing, software applications are accessed remotely through the internet or other networks via a cloud application service provider.
In simple terms, cloud accounting means storing, accessing, and editing your accounting and bookkeeping data ‘in the cloud’ – over the internet –
instead of relying on a physical hard drive/computer or other data storage device like a USB.
Companies choose cloud accounting over traditional desktop accounting for various reasons, which vary based on the needs of each company. The following are some of the benefits of cloud accounting versus desktop accounting.
As we laid out already above, cloud accounting software is a more convenient version of traditional accounting programs. But that’s not all there is to cloud accounting software. Some of the sticking and selling points making businesses switch to cloud accounting include (https://cloudcfo.ph/blog/accounting/cloud-accounting-benefits):
1. Improves collaboration among employees
Cloud accounting can save internal teams a lot of time when working together on projects, transactions, or day-to-day accounting and bookkeeping.
With cloud accounting,
● less time is wasted exchanging or trying to locate information because everything is available and stored online in the same place.
● Staff can access information remotely and in real-time. Less time is spent searching for documents and transferring them between staff because each employee already has access to the information at their fingertips.
● The entire accounting and bookkeeping process can be made more efficient when members of a team can work simultaneously on the same task.
- Eliminate delays when closing your books of accounts
Delayed sign-offs on financial reports can cost money. The longer it takes to generate a financial report, the longer it takes management to review it, and the greater the risk of lost opportunities to increase profits or reduce losses.
Business managers and owners can only make informed commercial decisions when they have complete and timely information to hand. With cloud accounting, financial reports can be generated quickly and efficiently. Once the financial data has been uploaded, it only takes a few clicks to generate an accurate financial report.
Manual work involving various spreadsheets can almost be eliminated. Companies can easily perform repetitive process-driven tasks such as calculating the depreciation of physical assets, amortization of intangible assets, or recording inventories post-sale. As a result, the internal finance team has more time to conduct variance analysis or trends research – i.e. real value-added activities. Cloud accounting enables a company to close its accounting books quickly and start focusing on the strategic direction of the business without delay.
3. Overhead costs can be reduced
There is less of a need for physical infrastructure when businesses transition to cloud accounting services. When documents are stored and processed through an online accounting solution, administrative costs can be reduced. Costs related to purchasing and maintaining physical storage space can also be eliminated.
Depending on how you integrate your cloud accounting systems, you may not have to invest in a server to store your information. If you outsource your cloud accounting system and processes to an outsourced accounting and bookkeeping firm, you really only have to deal with the costs relating to the services contract. Cloud accounting is a paperless system so your business can save money on paper, ink, cartridges, folders, courier fees, taxis, and other office supplies. These expenses can really add up – particularly for startups!
- Security systems
Cloud accounting solutions provide security systems that can safeguard a business against the loss of valuable data in cases of system failures, fires, acts of God, or even theft. When your company’s information is stored on a cloud accounting platform, it can be accessed from any place with an internet connection. So, in the case of accidents, your company data remains secure and accessible. This is really helpful to ensure business continuity. Contrast this with an unexpected fire causing damage to office premises where a company’s client information is physically stored!
Further, to safeguard information against data breaches, data stored in the cloud will have encryption and other complex security protocols – a really important consideration in this age of information!
- Accessibility
With the user-friendly and self-servicing nature of cloud accounting solutions, a company can view, edit, customize and generate its own reports at any time from any place.
By investing a little time to learn the capabilities of the cloud, managers, and owners can use the information stored on the platform to generate their own reports, analysis, and forecasts about their business. What’s more? Data from the cloud can easily be tracked across different devices. Information is available 24/7 (to those who have been granted access)
Bottom Line
Undoubtedly, accounting and financial services have evolved dramatically and rapidly, mainly due to the emergence of intelligent (AI) technology. And keeping abreast of the latest trends in the outsourcing industry is your only option to modify your business strategies and adequately address the changing market needs. In turn, you stay competitive and effectively grow your business.
Make the Move to Cloud Accounting with HWAA!
At HWAA we have developed a system to make the audit process work a lot better for our clients and our firm. We’re going to talk briefly about our E-audit service and why your organization should consider HWA for your next audit. There are four characteristics of the E-audit that make it the right solution for your organization. First, E-Audits are Electronic. Using our proprietary cloud-based system, we’re able to complete audits using virtually no handling of paper and minimal in-office time. We use a suite of easy-to-use online applications that make the audit process smooth, with no interruptions to the daily routine of your financial management team.
1. The E-Audit process is Effortless. Our E-Audit makes audits easier than it’s ever been. Most organizations who are audited spend weeks on end combing through stacks of paper to satisfy the requirements of nit-picky auditors. With our E-audit system, we can achieve the objectives of the audit without the headache, so you can focus on running your organization.
2. Needless to say, E-Audit is Efficient. With our E-Audit system, we are able to complete audits in a much shorter timeframe than traditional accounting firms with the same precision, care, and attention to detail you expect and deserve.
3. E-Audit is Economical! Our E-Audit system saves us time and money and we believe those savings should be passed on to our clients. E-Audit saves our clients, on average, 25% or more of their normal audit fees.
4. E-Audit has been implemented for multiple industries or type of organizations, including nonprofit organizations, employee benefit plans, colleges, vocational and trade schools, unions, group homes and many more.
If you need an outsourced team for your financial functions or want to shift your accounting services into innovative ways or new directions, contact us today to find out how an E-Audit can benefit your organization!
Let HWAA be your growth partner and assist your shift to cloud accounting. Contact us today!