Cloud accounting: The possible impact on the industry | Alexander & Co

Cloud computing and its accounting software has become one of the biggest and most popular technological developments for the accounting industry in recent times, and as a result it is rapidly changing the way the industry works and functions.

Accountants from all over the globe are aware of the new software and there are a number of different opinions towards it. While some are embracing cloud accounting, others are accepting it with some reservations. Some are taking a more sceptical approach, avoiding the use of it in fear of what the adaptation could bring.

Here we look at cloud accounting, it’s benefits and drawbacks, and how it could potentially impact accounting professionals and the industry altogether.

 

What is Cloud Accounting?

 

The development of cloud computing has created various types of software, that enables users to carry out tasks online, offsite, and from anywhere in the world.

Cloud accounting is a specific type of software, specifically designed to mimic traditional accounting software, but in a more accessible and efficient way. Using remote servers, all data and information is sent to the cloud online, where it can be stored and shared with others. Because the software is hosted online rather than installed on a specific device, accountants are able to travel with the comfort of knowing that they can access their documents and data, wherever they please.

 

The Benefits of Cloud Accounting for the Industry

 

As stated previously, cloud accounting is much more accessible than traditional accounting software, which could save a business plenty of its much-needed time. By freeing up time to use for other tasks, cloud accounting could potentially help accounting businesses grow – smaller ones in particular, where time is of the essence.

Accessibility to the software from devices anywhere in the world – so long as you have access to internet – diminishes any concerns about keeping in touch with colleagues and clients elsewhere. Not only that, but multiple colleagues in different locations can access the same data, all at once, making remote working or travelling for work much less of a concern.

By using cloud accounting software, businesses are simply tied into monthly subscriptions, rather than a one-off costly payment and contract. Not only does this allow accountants to regularly choose whether or not to continue using the software, it also ensures that any software updates available, are automatically installed. No further add-ons or additional costs are required to receive the most current version of the software.

Reporting also becomes much simpler, with real-time information being presented to the business, as and when it is required. Long gone are the days of manual data entry and reporting, reducing the risk of errors in any information the business sends across to clients.

Security of financial information is much stronger when using cloud accounting, as unlike traditional methods, the software is not restricted to certain devices. Previously, if a laptop became lost or stolen, information would be lost along with it. These days, however, access to the information requires a secure, online login, reducing the likelihood of information falling into the wrong hands.

Overall, the use of cloud accounting software can not only save time and improve security, but it can also reduce overall costs the business incurs.

 

A Number of Drawbacks

Of course nothing is perfect, and cloud accounting does have its drawbacks as well as its positives. Here are a couple of the downfalls that accountants face when using the software.

With the ease of access from anywhere around the world, comes a small lack of control. Servers all over the world could be the host of the accounting software, and while this will not cause any disruption or limitations, it could mean that there may be different rules in place in terms of the privacy your business has. If this is a concern, it’s well worth comparing various cloud accounting software programmes, finding out where they are hosted, and checking the terms for any privacy issues.

Backing up your data is slightly less efficient than traditional software, and with the UK requiring that business data be kept for a number of years after closure, this needs to be considered.

Upon reflection, it appears that cloud accounting software is set to become to norm for storing and reviewing financial data. Even with some concerns, there are a lot of benefits to the modern development, and the accounting industry and its members should consider how implementing it could impact their businesses, before

The positives outweigh the negatives, and there is plenty of potential for accounting businesses and the industry to grow from it. However, it is crucial that the industry and its members seriously consider its impact on their businesses, before choosing whether or not to implement it.