What is Cloud Based Accounting?
Cloud accounting software is similar to traditional, on-premises, or self-install accounting software, only the accounting software is hosted on remote servers, similar to the SaaS (Software as a Service) business model. Data is sent into “the cloud,” where it is processed and returned to the user.
Benefits of using cloud-based accounting software:
- You can use cloud-based software from any device with an internet connection. Online accounting means small business owners stay connected to their data and their accountants.
- The software can integrate with a whole ecosystem of add-ons. It’s scalable, cost-effective and easy to use.
- In the cloud, there’s no need to install and run applications over a desktop computer. Instead, you pay for the software by monthly subscription.
- As a small business owner, you might be concerned about a cloud service provider storing your data. But the cloud is one of the most secure ways to store information.
- All of your information is safely and securely stored off-site.
- Multi-user access makes it easy to collaborate online with your team and advisors.
- Automatic updates mean you can spend more time doing what you love.
- Everything is run online, so there’s nothing to install and everything is backed up automatically. Updates are free and instantly available.
- Upfront business costs are reduced – version upgrades, maintenance, system administration costs and server failures are no longer issues. Instead, they are managed by the cloud service provider.
- The beauty of this software is the flexibility it gives you to run your business from work, home, or on the go. You can be confident that you have an up-to-date picture of how your business is doing, no matter where you are.
- Software updates can be developed and delivered faster and more easily in the cloud. This means you don’t need to worry about installing the latest version and you’ll get access to new features instantly. With cloud accounting software, you have the option to run your business remotely, from anywhere in the world. And when data is fluid and accessible, the possibilities are endless.
How many people use cloud-based accounting software?
- The largest percentage of respondents use on-premise accounting software (43 %)—but the number of respondents using a cloud-based platform has nearly doubled since last year (from 16 % to 30 %).
- The top benefits cited by users of cloud-based systems include easier access to the system (33 %), security and safety of data (28 %) and ease of use (24 %).
- Security remains the chief concern with cloud-based accounting, cited by 28 %of respondents. But this number is down from last year’s 46 %, showing that overall, small-business concerns about data security are dwindling.
- Nearly half (49 %) of respondents are “extremely” or “very confident” in the reliability of cloud-based software, while 46 percent are “extremely” or “very confident” in the security and safety of their offsite accounting data.
- Seventy percent of respondents are “moderately” to “extremely likely” to invest in cloud-based accounting solutions in the future. Only 30 percent say they are “minimally” or “not at all likely” to invest, down from nearly 50 percent in 2014.