Tax & Accounting News

Is 2017 the Time to Consider the Jump to Cloud Accounting?  

by
Julie Farless
on
7/16/2017
Is 2017 the Time to Consider the Jump to Cloud Accounting?  

Cloud accounting allows business owners and employees to access software and data through the internet rather than on their local machines. This form of accounting is becoming increasingly popular with both small and large businesses alike. In fact, studies suggest a whopping 80 percent of companies will be utilizing cloud-based systems in 2020. If you’re still wondering whether 2017 is the right time for your business to jump to cloud accounting, consider the following pros and cons of it.

Pros of Cloud Accounting

1. Real-time Access

Cloud accounting gives you the option to upload and access data from anywhere in the world at any time of the day or night. You no longer need to drive to the office to enter transactions or pick up a report you forgot. Because your accountant also has access to your data, he or she can more proactively analyze your financial situation and give you important feedback quickly.

2. Real-time Numbers

To make crucial business decisions, you need access to the most current financial information available. The data you input into cloud accounting software is instantly updated. Therefore, multiple users from numerous locations can immediately see it.

3. Enhanced Accuracy

When the same accounting data is inputted into multiple formats, the probability of making mistakes increases. With cloud accounting software, only one version of the information exists. Due to enhanced accuracy, you’ll likely save both money and your sanity when tax time comes around.

4. Decreased Operational Expenditures

Buying and maintaining the information technology needed for reliable data management can be extremely costly. If you opt for cloud accounting, you’ll avoid these costs. You’ll simply pay a monthly expense for your desired services. If you aren’t happy with your software, you can seamlessly make a change without breaking your bank.

5. Up-to-date Software

Your vendor will constantly update your cloud accounting software. If an update is problematic, the vendor is responsible for fixing it. You’ll no longer have to needlessly wait for updates to launch on your computer before you install them yourself.

6. More Efficient Teamwork

Does your company thrive due to high performing teams? If teamwork is vital to your businesses profitability, cloud accounting is a must-have item. Because multiple users can access information from anywhere, team members can more easily collaborate online on projects when they’re away from the office.

Cons of Cloud Accounting

1. Security Concerns

Online security measures have improved drastically in recent years. However, security concerns still exist. Data must travel between a server and your computer. Therefore, a top-notch encryption is necessary. And, you’re sharing your information with a third party, your vendor. This entity also completely controls the storage of your data. Before you select a vendor, ensuring they have a solid track record is essential. The biggest security breach is usually from a hacked email of your user name and password. So use email security best practices to keep yourself protected.

2. Fewer Capabilities

Right now, some cloud accounting systems don’t have the same capabilities as desktop versions (that gap is closing fast). So, some of your requirements may not be available in cloud accounting applications yet. For example, you might be limited on the amount of data you can store.

3. Dependence on the Internet

In order to access cloud accounting software, you’ll need an internet connection. Obviously, plenty of options to connect to the internet exist. However, you may encounter crucial times when you don’t have an online connection and can’t retrieve your data.

If you’re undecided about taking the leap to cloud accounting, consider carefully weighing the aforementioned pros and cons of this type of accounting system. Your business’s future sustainability might depend on it. It is best to talk to a cloud accounting professional before you take the plunge.

The experts at Martinez & Shanken, PLLC write for TaxBuzz, a tax news and advice website. Reach them at [email protected].

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Julie Farless

Julie Farless

Martinez & Shanken, PLLC is a Certified Public Accountant (CPA) firm based in Gilbert, Arizona. We provide a full range of accounting, bookkeeping, consulting, outsourcing and business services, but we specialize in tax preparation. We work with you to ensure that your personal or business processes are conducted in a manner that ensures ongoing integrity in your financial transactions. We are available to answer your questions and help with your ongoing tax planning and changing business needs.

Deborah Martinez & Earl Shanken
29 reviews

Arizona

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