7 Ways Cloud Accounting is Impacting Financial Management

As financial management technology continues to advance, smart business organisations are embracing cloud accounting as their financial management tool of choice.

And there’s a rationale behind it — cloud accounting is changing organisations’ approach to financial management in many ways and for good.

No longer do businesses have to go through expensive and stressful traditional accounting processes.

What is Cloud Accounting?

Traditionally, accounting processes are often executed using software hosted locally on a hard drive on the business’ premises. Cloud accounting (or online accounting) is accounting that is executed and managed using software that is hosted on the cloud.

It packs similar accounting capabilities and functionalities as traditional accounting but the whole process is done on a secure remote server and it adds even more benefits.

Below are some of the ways cloud-based accounting technologies are transforming accounting operations across organisations:

1. Cutting costs

In traditional settings, businesses that need to implement a robust financial management system would necessarily have to invest in both hardware and software. This often results in a high set up and maintenance costs.

On the other side, businesses that have adopted cloud accounting technology have found that the costs significantly decrease as the technology allows for minimal infrastructure requirements.

Cloud-based solutions mostly require paying monthly or annual fees for the software package and support, thereby giving businesses spend control and driving down the cost of their accounting operations.

2. Data storage and sharing

Traditionally, financial data is recorded and stored in a hard drive on which accounting software is installed. Although this method keeps your data away from the outside world, there are several downsides like the possible loss of data in the case of a disaster.

Cloud solutions store accounting data on the cloud, protecting it from physical intruders and accidental losses. Plus, in a matter of seconds, you can share data securely across your organisation or even with authorised third-parties.

3. Accessibility

The restrictive nature associated with data storage in traditional accounting limits finance managers’ capability to access data from anywhere or at any time. The Covid-19 stay-at-home orders which have forced many organisations to adopt remote work policies are further exposing this limitation.

Fortunately, cloud-based accounting solutions are altering this aspect of business management by providing access to financial documents, data, and reports in real-time no matter team members’ locations or time zones.

4. Real-time collaboration

When the boundaries of time and distance are removed, real-time collaboration becomes possible and team efficiency is heightened.

Also, as managers and accountants are no longer waiting for information (for example, in the form of email replies), the entire process is streamlined and objectives are achieved more quickly.

5. Scalability

As your business grows, so will your accounting needs. Companies often find themselves struggling to scale in-house accounting infrastructure — they often need to buy more hardware, expand their storage capacity, hire more people, spend long hours on accounting tasks, etc.

But cloud computing is designed to scale effortlessly as your business scales. A sophisticated cloud accounting system should be able to handle any number of data you throw at it.

6. Faster workflow and reporting

When it comes to workflows and reporting, the physical method usually requires several approval steps from people who would need to be physically present in the office. If a manager is out of the office, for instance, reports would have to wait until they return, and this usually leads to unnecessary bottlenecks.

This means financial reporting takes a longer time without a reliable cloud-based financial system that allows authorised persons to immediately retrieve the accounting reports on their own.

Some cloud accounting software even comes with automated reporting features that can produce accurate and up-to-date reports without the need for redundant multiple approvals.

7. Financial data security

Another way online accounting is transforming organisations’ financials is in the area of security. Whereas in-house infrastructure is subject to data loss, theft, or damage, financial data is far more secure and confidential with cloud-based accounting tools.

Start with FinanSys Cloud

FinanSys Cloud is a secure cloud-based hosting solution dedicated to and optimised for SunSystems. As a one-stop provider for all accounting needs, FinanSys Cloud delivers seamless support and maximum uptime, and as well eliminates the problem of housing and maintaining computer hardware and the associated infrastructure.