Cloud Accounting vs. Traditional Accounting: All You Need To Know

As the times are changing, new and improved technological inventions have started making their mark in the business world. The same goes for the accounting industry, which has evolved over centuries from the paper-based traditional accounting to modern accounting with software applications and tools.

Taking another leap of evolution, accounting businesses can now take advantage of cloud technology. Cloud accounting is a secure and flexible platform for accounting professionals to carry out their tasks efficiently.

Cloud In The Professional World

Most of the extensive applications needed by professsionals in this digital world are hosted on the cloud. Moreover, all the essential data used to analyze and forecast a company’s growth is also on the cloud. So, almost every possible client of an accountant is a cloud user. As a service provider, accountants must also be available on the same platform as the clients.

Along with offering accountants a platform to serve their clients better, cloud also solves the common problems faced by accountants in their daily process.

Common Problems Faced by Accountants

As an accountant who is still making the use of accounting software installed on their office computers, you might come across some inconveniences in your functioning.

Firstly, the lack of remote access in the case of traditional accounting leads to an entire day of sitting behind a desk. If you have to attend a meeting or have other appointments, you are bound to lose your work.

Secondly, the cost of hardware setup and maintenance is significant, with no to minimum scalability options. Hence, every time you want an upgrade of resources, the only option is manual hardware replacement.

Along with these, there are various other challenges like data security, IT issues, collaboration with clients and colleagues, among others.

Cloud For Accountants And Other Accounting Professionals

The rising popularity of the cloud among the clients is not the only good reason for the accountants to make a switch to cloud technology. There are several other reasons that make cloud practicing accountant better than a traditional accountant.

Here are some of those:

• Cloud accountants can access accounting applications and data from anywhere at any time.
• Cloud accountants do not have to rely on the local systems to work on accounting data, saving them the costs incurred on the local infrastructure setup and maintenance.
• Cloud accountants can collaborate with clients, subordinates, etc. to work together on the same file from different locations.
• Data backup is maintained automatically for the cloud accountants.
• Cloud can integrate better with the online bank and payment accounts to allow automated listing of financial transactions and reducing the data errors on the accountant’s end.

So, why accountants should not be on cloud when it offers convenience while enhancing productivity?

How to Make A Switch To The Cloud?

Hosting Accounting and Tax Applications on Cloud

For quite some time, the accountants have been relying on the traditional method of desktop-based accounting and tax software. They are accustomed to the practices as most of the operations are familiar for them. For them, making a switch to the cloud might appear a big step.

This is where opting for application hosting on the cloud comes out to be the best option.

Here, you can opt for a third-party service provider to host the accounting application and data on the cloud. This way, the user interface and features of your application remain the same. The only thing that changes is its accessibility and performance.

You can access the application over the Internet and collaborate with any number of users simultaneously. And your existing application data can also be migrated to the cloud with ease.

Simply put, you have benefits of the cloud at your service without major alterations to your accounting process.

Leading desktop-based tax and accounting applications compatible for hosting:

• QuickBooks
• Sage Accounting
• Drake Tax Software
• ATX Tax Software
• Intuit ProSeries
• ProSystem fx Tax Software
• Lacerte Tax Software

Cloud-based Applications

Citing the rise in popularity of the cloud, application developers have developed accounting applications that are totally based on the cloud. These applications offer a complete facelift from the existing application structure to provide newer features in the form of accessibility and security.

However, considering the current status, most of these applications are not able to match with the feature lists of the desktop-based applications. Moreover, depending on the existing accounting application that you are using, data migration may be a concern.

Some of the leading cloud-based accounting and tax applications are:

• QuickBooks Online
• Xero
• Zoho Books
• TaxACT Online

Final Note

Traditional desktop-based accounting has gone past it’s ‘best use by’ date and cloud is inevitably the solution to come. It comes laced with benefits that uplift the potential and productivity of the accountant. You might already be using various cloud applications in form of email, social media, etc.

You can choose to go with a step by step move to cloud in the form of hosting the application on the cloud, or you can choose to make a complete switch by choosing a cloud-based application.