Cloud-based accounting is creating a large-based shift in the way that work is being done for both independent accountants and those who work for small and midsize firms. Since cloud systems offer the option for using payroll and the integration of business functions into one system, accountants are able to broaden their own practice and their functions to their firm. As accounting affects multiple aspects of any business, such as IT infrastructure, operations, and international exchanges, cloud-based accounting likewise affects and improves a company’s dealings in each of these areas.
Any change towards traditional desktop software accounting to a cloud system will involve a change in the IT infrastructure in a firm. Cloud computing itself is a simple concept – instead of storing data on hardware, data is stored on secure internet-based systems. Accounting data that was once housed on large, in-house servers can now be based on internet systems, meaning the servers themselves can now be used for other functions or simply be made obsolete. This not only saves on costs from the hardware, but also the manpower that was once being spent on these systems can be used elsewhere.
Operations are affected due to the ability to condense once spread out functions into a clean and efficient area where all the payroll and accounting practices can be handled in one setting. The emphasis here is on having one system; the integration of company processes allows for a smoother flow of operations and tighter security measures, as it is easier to secure one centralized system. Previous problem areas, such as client bookkeeping, can be handled from the same centralized software, instead of dealing with multiple types of systems across clients.
Dealing with international financial exchanges can be a potential headache for firms not equipped for both the cost and the process involved with working with multiple currencies. Cloud based accounting software takes care of that, as the new systems are equipped to handle international exchanges. Also, since the data is stored on the internet, and not on a physical server based in one country, accounting professionals will have access to the business data wherever they are located, and an IT failure on one side of the company will not prevent a separately located branch of a firm from accessing the cloud.
Given all the benefits, it makes sense for a company to consider cloud based systems as the next step for enhancing its accounting practices. Any upfront costs would be compensated in the long term as the company saves on costs from IT, operations and ease of international use. Perhaps most importantly, cloud based accounting allows accountants to become even more vital for companies to do business, giving them the tools they need to prosper in the internet age.