Cloud Accounting: What is Cloud Accounting Software?
Read Time: 8 Minutes
The cloud is changing business. From streamlining key processes to empowering data analytics, on-demand cloud resources are now critical for day-to-day operations.
And while many organizations have already adopted both public and hybrid solutions to deliver key business functions such as inventory tracking, customer relationship management (CRM) and IT security, there’s another key area that stands to benefit: Accounting.
According to recent research, 79 percent of organization are now using cloud accounting software to improve payroll, expense management and reporting processes. But what does this look like in practice? Let’s break down essential cloud elements, key account functions and how businesses can streamline the shift to cloud accounting services.
Breaking Down Cloud Basics
At its most basic, cloud computing shifts the burden of resource deployment and processing out of local server stacks and into a scalable, agile environment. This environment may be owned and operated by a third party off-site (public cloud), owned and operated by your business locally or at a distance (private cloud) or some combination of both (hybrid cloud).
Cloud computing offers four key advantages over traditional server deployments:
- Scalability — Cloud resources can be scaled up — or down — as required to meet emerging demands
- Cost visibility — The costs of cloud services are governed by a service-level agreement (SLA) and tied directly to operational use, allowing companies to better predict monthly spend.
- Agility — Adding new software or services to existing cloud stacks is easy with the right provider, allowing companies to quickly respond as operational demands change.
- Transparency — With cloud services, companies have complete control over what services they deploy, when, and to what degree. This provides key resource transparency to help plan long-term adoption.
Cloud Accounting, Explained
Cloud accounting software leverages the distributed nature of cloud computing to streamline and unify key business accounting processes. As noted by Business.com, this is now critical for organizations — more than half of those surveyed said there was room for improvement in their payroll and accounting processes.
Cloud based accounting software helps deliver this improvement potential by combining key functions across multiple service areas including:
- Invoicing — Quickly create and send new invoices, then track confirmed delivery and payment from a unified cloud solution.
- Banking connections — Connect with your financial provider to automatically download and match transactions to invoices, in turn reducing manual processes.
- Reporting — Streamline reporting with automatically generated profit and loss statements, balance sheets and transaction details to deliver both accounting overviews and specific data points on-demand.
- Forecasting — What does your accounting forecast look like tomorrow? Next week? Next quarter? Cloud financial management software helps deliver data-driven analysis to predict financial trends.
- Mobile management — Accounting doesn’t happen in isolation. By deploying cloud-based mobile tools and applications, staff can update critical data, prepare key reports and monitor accounting operations anywhere, anytime.
- Sales — Integrating sales into the accounting process with a unified cloud platform lets your team both track sales volumes and ensure the right invoices reach the right people at the right time.
Making the Move
With the abundance of cloud services now offered by large technology companies and specialized providers alike, it’s easy for organizations to get overwhelmed. As a result, it’s critical to consider three key areas before making the switch to cloud accounting software:
- Cost — Look for providers with clear pricing and feature options, along with multiple cost tiers to meet specific business needs.
- Support — If you have questions or concerns, what’s the support process? Seek out providers that offer in-depth articles, guides and ongoing expert support.
- Reputation — As the cloud market begins to standardize, front runners have emerged. Industry and consumer awards can help identify front-runners and ensure you’re getting the best value for your money.
Frustrated with siloed services and manual processes? Cloud accounting ERP software can help bridge the gap and boost your bottom line.
The IWI Consulting Group is a Sage Intacct partner based in Toronto. We have both the broad industry experience and local expertise Canadian companies need to adopt next-gen cloud solutions including Sage Intacct, Sage X3 and Sage 300cloud.
Ready to make the switch and embrace the potential of cloud accounting? Start with IWI. We’re not just an accounting software provider in Canada — we’re committed to delivering and deploying IT services that will improve your business efficiency, enhance employee productivity and expand customer relationships.