Software in the cloud provides real-time data and creates efficiencies

If you haven’t recently considered how cloud accounting software can help your business function more smoothly, it may be time to do so.

“Cloud accounting software has come a long way in just the last year,” says Heather McNichols, director of accounting services, Rea & Associates Inc. “Many business owners looked at these systems a year or two ago and were not impressed. A lot has changed, and it’s definitely worth a second look.”

Smart Business spoke with McNichols about how cloud accounting software can help businesses function more efficiently and allow them to see their financials in real time, vs. relying on paper documents that could reflect data that is days or weeks old.

How does a cloud accounting software system work?

It’s an internet-based server system that does all of a business’s accounting functions, from accounts payable, to invoicing, to a general ledger, in the cloud. A year ago, it was a nice benefit to have, but during the pandemic, it can be lifechanging.

You can access the accounting software and records from any device, so you don’t have to be in the office connected to the server. Your accounts payable person can be working at home in Ohio, while your accounts receivable person is at home in Florida, and they both have access to the same data in real time. That gives employees the flexibility to work from anywhere.

What are some other benefits of cloud accounting?

The biggest benefit is decreased maintenance of a network — either you don’t need one at all, or it doesn’t need to be as big — and you don’t have to pay to have your network updated. Your data is also protected and backed up in the cloud, whereas if it is on your internal server and the server crashes, or something happens to the building, it can cost thousands of dollars to retrieve it and build a new network.

Another benefit is that you don’t have to keep up with software updates, because in the cloud, you get automatic updates to the software, so you are always working in the newest version.

How can the system increase efficiencies?

There are other applications that can be bolted on to your cloud accounting software. If you need to track employee expenses, there are apps that efficiently work with your online accounting software.

That removes a lot of manual entries and mundane tasks, and increases accuracy, because any time you have a human element in the process, there is the opportunity for errors.

Cloud accounting software also decreases search time for documents, as employees no longer need to spend time searching for files that may have been misplaced or lost, or be outdated.

And because everything is in one place, and data is updated in real time, business owners have the information they need at their fingertips. If you are in a meeting, you can pull up financials and see where things are sitting at that moment with live data.

With paper reports, you could be working off of data that is days, weeks, or even months old.

How secure are cloud accounting software systems?

The systems have a massive amount of encryption, so security is top-notch. The companies that offer these systems would be at risk themselves if data were accessed, so they take every precaution, such as double authentication, to ensure that data remains secure.

Cloud accounting software systems have come a long way and continue to evolve. Business owners owe it to themselves to at least look at them to see how they can benefit their companies.

Insights Accounting is brought to you by Rea & Associates