Do you want to make more money, run your association’s operations more smoothly, and make your financial data more secure without investing more resources? Then, cloud-based accounting software might be what you need. With the right accounting software, you can achieve these objectives and many more. Read on to find out why.
Basics About Cloud Accounting Software
Cloud accounting software, web-based accounting software, or online accounting software are all terms that are used to describe accounting software that is hosted on a remote server (the cloud). Small business owners, accountants, and individuals transmit financial data to the cloud where it is processed and stored for the user.
You can access the cloud-based software through an app or the internet, usually from anywhere you have Wi-Fi access. Unlike traditional accounting software, you do not need to set up software on individual computers. You and your staff can access the cloud on your devices and see the same data, making collaboration easier than ever. This access allows you to avoid having to install and maintain software on individual computers.
Users subscribe to the online accounting software solution of their choice. This software is usually linked to their bank account so that the cloud-based software can pull data from bank transactions. Users log into the online account to view this data, create invoices, and perform other bookkeeping functions.
Benefits of Cloud Accounting Software
Some of the most notable benefits of cloud-based accounting software include:
With traditional accounting programs, you usually have to install individual software on a limited number of devices. You also have to pay for those devices and invest in methods to protect them.
With cloud accounting software, you do not have to purchase individual software. You also do not have to supply devices. You can access your financial information from your own device. Your information is safely stored in the cloud with the latest technological innovations and security measures.
You can also skip the additional costs associated with setting up server infrastructure or managing information technology in-house. Depending on the nature of your business or organization, having flexibility with your technology and accounting software may enable you to operate your business completely remotely so that you can further save on overhead costs. This is an ideal solution for nonprofit, association or small business accounting.
Perhaps even more important than the direct money that you can save by using a cloud accounting software solution is the potential for you to save significant amounts of time – for you and your staff.
Cloud-based software automates workflows to save valuable time. For example, you can set up your cloud-based accounting program to automatically pay vendors, send invoices to recurring customers (or for recurring charges such as membership fees), send reminders for unpaid invoices, and complete other automated processes. This saves your staff time from having to manually perform these functions.
Additionally, when you set up your online accounting software accounting program to connect with your business bank account, your bank transactions are processed immediately in your accounting program. You and your team can avoid having to manually track these expenses.
While traditional accounting programs required new installations or manual updates, cloud-based accounting software programs automatically complete this process.
With more people working from home more than ever before, cloud-based accounting software provides the flexibility and ease of access that is critical in today’s fast-paced society. Having instant access to your association’s financial data from home, work, or anywhere you have internet access. You can check on your cash flow wherever you are. Additionally, some cloud-based software programs also provide a mobile app.
Backup and Disaster Recovery
One of the major concerns of traditional accounting methods is the potential loss of information that you can experience due to any problem involving the physical worksite, such as fire, flood, or storm. Online accounting software provides automatic backups, so your financial data is always protected.
A tremendous benefit of cloud-based accounting software is to get immediate updates about your financial information in real-time. You can log into your software at any time to get a better idea of where you are at. You and your board can make fast decisions that are informed by your association’s or nonprofit’s financial data. You can also prepare financial reports at any time without having to invest a lot of extra time into the process.
Accounting errors are less likely to occur with cloud-based accounting. This is because much of the process is automated. Additionally, you are entering expenses and income contemporaneously, so your financial data will be accurate at any time.
With cloud accounting software, you can also avoid formulas or other issues that may arise from depending on a spreadsheet. By simply entering your income and expenses as you go, you can ensure that your data is accurate.
Clearer Financial Picture
Cloud-based accounting software programs often provide a streamlined screen that provides the most important information on a convenient dashboard. You can easily spot what bills are coming up in the near future, your cash flow projections, and unpaid membership fees or other periodic donations.
Since online accounting allows your team to view the same data, other departments can get a clearer picture of your financial status when they need to.
Cloud-based accounting eliminates massive amounts of paperwork, receipts, physical books, and other physical clutter. Once you switch from a traditional accounting program to a cloud-based one, you can begin eliminating paperwork, which will also help better secure your data.
Online accounting software can integrate with other tools, such as point-of-sale systems and customer relationship management systems. Integration is simple. One of the reasons we partnered with Sage Intacct is how easy it is to integrate: 75 percent of Sage Intacct customers connected Sage Intacct cloud accounting solutions with at least two other applications.
What You Can Do with Online Accounting Software
Online accounting software allows you to complete many of the traditional accounting functions and much more. Tasks that are commonly completed on cloud-based accounting programs include:
You can create invoices easily with cloud-based accounting software. You can set up recurring invoices and automatically invoice members and donors. Sending invoices is easier than ever via email. You can also create sales orders, quotes, or custom objects directly and automatically through your program. This also allows you to better track your sales and membership campaigns.
Complete Time Tracking
Cloud-based accounting software programs also help you to better track time to certain clients and projects so that you have a more realistic idea about how time is being spent at your association or nonprofit.
You can pull up common financial reports like balance sheets, profit and loss, and cash flow statements with a simple click of the button. You can also create custom reports based on a portion of the data that your accounting program collects.
Differences between Cloud-Based Accounting Software and Traditional Software
Several key distinctions separate cloud-based accounting software from traditional accounting software. The most prominent are:
- Flexibility – Cloud-based accounting is much more flexible than traditional accounting solutions. You can easily access your data from a multitude of locations. This makes it a perfect option for small business owners. You can also look at just the targeted financial information you want without having to review all of your data. Traditional accounting is more cumbersome.
- Access - Cloud-based accounting software allows you to access your financial information from nearly anywhere in the world. Traditional accounting software can only be viewed on specific devices where you have installed it at the site of your business or organization.
- Updates – Traditional accounting software does not provide real-time information. Instead, you or your bookkeeper must manually enter information. You may not want to run financial reports until the latest financial information has been input. In contrast, cloud accounting software automatically updates and allows you to run financial reports in real-time.
- Maintenance requirements – Traditional accounting software programs require ongoing maintenance costs and manual updates. Cloud-based accounting solutions are usually updated automatically and do not require any special downloads or installations.
- Cost – As an association gets bigger, they have to pay for more software or licenses. Maintenance fees also increase as your association grows. Cloud solutions are more flexible and you can scale up or down as your association’s needs dictate. Cloud solutions are usually paid for via a monthly subscription.
Why Cloud-Based Accounting Is Best for Smaller Organizations
When small business owners or newer nonprofits enter a search query such as “What is the best invoicing software for small businesses,” the matches are usually to cloud-based accounting software. This is because cloud-based accounting programs allow you to access your information from any device with an internet connection. This provides the ultimate flexibility that small nonprofits and associations need, especially when they do not have a separate workspace or are often traveling.
Cloud-based accounting also provides up-to-date information, allowing you to make informed decisions with the latest financial data at your disposal.
With cloud accounting, you can create an invoice on your iPhone or Android device, speeding up the process of you getting paid.
Additionally, cloud accounting can integrate with many other apps.
Ultimately, cloud-based accounting software is cost-effective, easy to use, and able to be scaled up and down.
Safety of Cloud-Based Accounting
If you are considering implementing a new accounting system, you might be wondering whether cloud-based accounting software is safe. You might even worry about not being able to access your core data. However, cloud-based accounting often provides a safer option than traditional methods because it:
- Cannot be physically accessed, such as if a laptop is stolen.
- Uses encryption to protect the data from unauthorized access.
- Requires users to input their credentials to access it, providing an additional layer of security.
- Can safely share information with others within the organization.
- Have backup servers (possibly in multiple locations) in case a network goes down, which allows you to have continued access to your data.
- Provides security patches automatically.
- Has multiple, built-in methods to authenticate the identity of users.
Cloud-based accounting software incorporates some of the same protection methods as some of the world’s largest banks.
You can also control the level of access for other users, creating an additional layer of protection. You can also avoid having data potentially lost, stolen, or hacked by not having physical connections to it, such as by not having to rely on sending messages over unsecured email or a flash drive.
Cloud-based software companies understand the importance of keeping your data safe and often put extra measures in place to ensure its safety.
Future of Cloud-Based Technology
Cloud-based technology is expected to continue to rapidly expand over the next few years. Competitive companies will continue to look for cost-savings and greater efficiencies that help them outperform their competitors. As such, many small- to mid-sized associations and nonprofits will continue to spend on information technology.
IT spending is forecast to grow to $3.8 trillion by the end of 2021, which represents a 4% increase over the previous year, according to market research from Gartner. Specifically, enterprise software, including cloud accounting applications, is forecast to realize a 7.2% growth.
The global public cloud infrastructure market is expected to grow to $120 billion in 2021, an increase of 35%, according to Forrester Research.
Associations and nonprofits of all kinds and sizes will continue to expand and adopt more cloud-based solutions.
How to Set Up Cloud-Based Accounting
Setting up a cloud-based accounting program does not have to be a hassle. It can be a simple undertaking if you are clear in your objectives and communicate with your team. Here is a brief list of steps to help you make your move to cloud-based accounting a smooth one:
- Select the cloud-based accounting program that best fits the needs of your business or organization. Our financeSYNC is especially designed for associations and nonprofits.
- Select an associate or team to help transition your organization to cloud-based accounting.
- Schedule a meeting with your staff to explain the expected changes.
- Segment accounting tasks and migrate them one at a time to your cloud-based program.
- Contact the cloud-based accounting software developer if you need help with the transition.
If you need any advice or help in setting up financeSYNC as your cloud-based accounting system, contact enSYNC Corporation.