Last updated on October 17th, 2020 at 10:28 pm
Even if you have absolutely no idea what the cloud is — and don’t worry, most people don’t — you’re probably familiar with some of its applications. Google Drive, iCloud, OneDrive, and Dropbox — they all rely on the cloud to store your documents and pics.
These apps may not illustrate the cloud’s full resume of tricks, but you don’t need to know its complete inner workings to benefit from it. All you need to know is Google Drive, by way of the cloud, lets you share and update data instantly over the Internet. It’s fast, simple, and best of all — you don’t need to think too hard about it.
Now imagine your business’ finances worked just as smoothly. Think it’s impossible? It can be made a reality when you take advantage of cloud-based accounting software.
4 Advantages of Cloud Technology Can Transform your Accounting
How traditional accounting software stores your data
Right now, your bookkeeping software is a program that sits on your computer’s desktop. The only way it has access to the outer world is if you copy documents onto a memory stick and hand it to an employee or your accountant, who then has to return it with any changes they make. It’s up to you to update the master copy, and you know from experience human error can cause discrepancies in your data.
All that your software stores is tied physically to the device on which you downloaded it. Should something happen to your hard drive — like theft, natural disasters, or malware — you could lose some or all of your financial info.
The cloud does the same thing, but better — and on a grander scale
Cloud-based accounting software doesn’t rely on your personal hard drive to store your stuff. It moves it to the cloud, which is basically a huge network of servers owned and operated by software companies. Also known as server farms, they keep your data safe in vast warehouses that may be located all over the world. Though not invincible, these server farms are less susceptible to theft, damage, or corruption than your personal hard drive is. Best of all, you’re not responsible for installing or maintaining any of the security measures k these farms safe.
So what makes the cloud so special? The Internet!
Undoubtedly, the Internet has transformed everything about your life. At home, you can order takeout out with a few swipes through your Just Eat app, or you can hire an UberEats to satisfy your Szechuan cravings. When you spend too much on food, you can head to a direct lender’s website to quickly get an online loan. Even direct lenders have relocated the borrowing experience entirely online, so you can apply for, receive, and repay your personal cash loan all from your laptop. Then you can hop onto Skype to tell your friends all about your financial misadventures. Or not, if you get distracted by the latest sale on sneakers.
The Internet has also revolutionized your professional life, particularly in the way you store professional data. Now that your data moves from a single hard drive to these remote servers, the only way to access your information is over the Internet. This means you no longer need to be on that single desktop to see or update your data. As long as your device has access to Wi-Fi — and you’ve given it permission to access your accounting software — you can see and update your data at any time, from anywhere. Just like you can order takeout using your phone on the bus, you could similarly update your books. You can still do most of your work from your office or store, but the cloud lets you also work from home, the café, or your weekend cottage trip.
Is cloud accounting software for you? Maybe
Though many small business owners appreciate the mobility and convenience of the cloud, you might not. It’s up to you to see if this new tech will be a good fit for your business model. Take the time to read more about the cloud in general before moving onto best-of lists and other guides to accounting software.
By the time you transition to online accounting software, you may still not understand the ins and outs of the cloud. But with research and the guiding hand of a cloud accounting firm, you can understand the ins and outs of your chosen software. Soon enough, you’ll be navigating it as easily as you do your email and Google Drive.