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Cloud-based accounting: How it can streamline your business finances
Posted by Grace Townsley
June 2, 2023
Cloud-based technology is more than a passing trend. It’s the new normal for small businesses in every industry.
With the ever-increasing need for efficiency, flexibility and on-demand access, cloud-based solutions are revolutionizing everything from file storage and communication, to project management and customer relationship management. Today, it seems cloud-based technology is permeating every area of business. And business finance is no different.
Cloud-based financial tools now give small businesses a new way to manage their finances, balance their books, conduct everyday accounting tasks and plan for their financial future.
Curious how the cloud can streamline your business’ finances and help you reach your goals? Read on to learn what cloud-based accounting is (and isn’t!), its advantages over traditional accounting solutions, and how you can start leveraging it today.
What is cloud-based accounting?
Cloud-based accounting is a modern approach to managing your business’s financial records, transactions, reports and other data using online software and storage, rather than relying on traditional accounting systems that store information and processes on localized computers or servers.
Cloud-based accounting tools use web-based software to function. They’re updated in real time, available 24/7, and can be accessed through the internet or company-specific networks. The software doesn’t live on individual computers — meaning any device with the right permissions can access the data and software stored in your cloud applications.
What makes cloud-based accounting tools better than traditional software solutions?
One of the main reasons cloud-based accounting is gaining popularity among small businesses is that it’s more accessible, flexible and cost-effective than traditional tools that are hosted on localized devices.
Unlike downloaded accounting software, cloud-based tools allow employees to perform tasks anywhere, any time, from any approved device — even smartphones. That allows for greater collaboration, real-time data updates and the opportunity to offer remote work opportunities.
Cloud-based accounting also comes with more robust security features and data protection. These tools have built-in data encryption, frequent and automatic data backups and multi-factor authentication that keeps every datapoint secure. While traditional accounting tools may be hacked by anyone with access to your network, cloud-based technology reduces your risk of unauthorized access, data loss or identity theft.
A third benefit of cloud-based accounting is that it’s particularly cost-effective for growing small businesses. Without the need to buy expensive hardware, install complicated software, buy localized digital storage and manage an IT team, cloud-based accounting can be one of the most cost-effective tools you can leverage.
Plus, it’s easily scalable. Companies pay just for the services, features and data support they need to operate, often through one simple monthly subscription. The option to scale up and down as needed allows these businesses to grow quickly and effectively, carefully managing their costs along the way.
How can your small business tap into the power of cloud-based accounting?
Getting started with cloud-based accounting might be easier than you think. Today, business owners can easily research and purchase any cloud solution online with just a few clicks. And with highly trained cloud-deployment specialists available to serve businesses in every single industry, you won’t have to look hard to find a professional who can help adapt your cloud-based accounting solution to your unique needs.
1. Try multiple cloud-based solutions before you buy. Every accounting solution comes with different features, benefits and tools. Look for a solution with an interface you can easily understand, robust security measures to protect your valuable data, and easy integrations with the other tools you use.
2. Take time to train your team. Transitioning software, even to one that streamlines your entire financial process, can be a long, complicated process. Give your team time to adjust to the new tools, and bring in an experienced trainer if needed. During this time, encourage questions, listen to feedback, and give your team extra flexibility while they adapt.
3. Automate and integrate, where possible. One of the best benefits of cloud-based accounting software is that it integrates with a host of tools and comes with time-saving automations. But these features only work when you use them! Though it takes extra effort to optimize your new tools, the payoff in saved time, reduced errors and streamlined processes is worth the work.
4. Regularly review your data. Cloud-based accounting gives financial decision-makers instant and real-time access to the critical data they need to move your company forward. Take advantage of this benefit by frequently pulling financial reports, monitoring your cash flow and analyzing financial trends.
Between the time your team can save, the errors you can avoid, and the optimized financial performance you can achieve through on-demand, real-time financial reports, when used correctly, cloud-based accounting software can pay for itself.
As cloud-based technology continues to evolve, it’s up to small business owners to adapt right along with it. Because if your business isn’t accessing these advanced reports, securing your customers’ data, and giving your team the flexibility they need to do their best work from anywhere, you may be missing out on the competitive advantage you need to propel your small business forward.
Want more? Escalon has helped over 5,000 small businesses across a range of industries to optimize routine business functions, like taxes, accounting and HR. Talk to an expert today.
This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact ushere.
As a professional copywriter in the finance and B2B space, Grace Townsley offers small business leaders big insights—one precisely chosen word at a time. Let's connect!