There are many reasons for this, with the primary one being that it gives you a chance to keep a great overview of your finances at your fingertips and avoid any unpleasant surprises at tax time.
Overall it is a tremendous boost for any small or medium sized business because it saves you both time and money. When you use a cloud accounting company, it also eliminates the need to hire a bookkeeper and store bulky files on site.
The downside of traditional software has always been that that it is difficult for businesses to keep the data up to date and often only one person has access to the data. When key decision makers want to make quick checks, it cannot be done easily.
Cloud computing is a way of describing transactions performed over the Internet. If you access your bank records via a computer, for example, you are using cloud computing. Cloud accounting is when you access online programs provided by service companies that let you use and access your company’s financial data from any computer or mobile device anywhere, at any time.
The cloud is also more secure than storing financial records in your office where they could be stolen, vandalized, or lost due to a fire or flood. If you use cloud software, even if you lose your computer or it is stolen, nobody can gain access to your private financial data unless they have a login to your account. Your data exists in the “cloud,” not the software.
There is nothing you have to install and everything you file is automatically backed up. You don’t need to worry about upgrading to the latest version of software or keep a maintenance staff on hand in case something goes wrong. Better yet, there’s no nagging concern about what happens if the server goes down. The cloud service provider takes on all those concerns.
The biggest plus, however, is that it allows you as a business owner to be constantly aware of your current financial situation and that in turn helps you make better business decisions.
As well, the automatic updates give you more time to spend on doing what you wanted to do in the first place, which is run your own business.
Certified professional bookkeeper and certified tax specialist Elena Ivanova is managing director of Piligrim Accounting Inc., a national bookkeeping and tax preparation service based in Richmond, Ont. You can reach her at email@example.com.