Why Do Businesses Favor Cloud Over Desktop Accounting?

Accounting is one of the most important functions in any business, and until recently it could only be performed by skilled on-site staff. These days, businesses of all sizes are increasingly switching over to cloud accounting solutions—but why?

Traditionally, accountants used to record every transaction with pen and paper. As these processes gradually became digitized, companies gradually replaced manual accounting methods with desktop accounting software. These applications often require a one-time purchase and can be incredibly expensive. Desktop accounting software typically stores data on local drives, meaning that it can’t be accessed from external devices or networks.

Cloud accounting is very similar to desktop accounting in terms of functionality. But instead of data being stored on local servers, it’s stored online and can be accessed from anywhere. The required software is usually paid for with a subscription model, whether on a monthly or yearly basis. Beyond these basic differences, cloud accounting offers all kinds of advantages over desktop software.

Reduced Costs

The number one reason businesses favor cloud over desktop accounting is cost savings. Cloud accounting saves money on overhead, software, and maintenance costs, and helps prevent losses due to errors or fraud.

Because cloud software provides a centralized location for all your financial data and comes with many options for various kinds of automation, it allows your finance team to be more productive. A more efficient accounting department means you’ll have more time to focus on strategic, high-level tasks and reduce the time wasted on manual work.

Cloud accounting offers access to real-time data. On the surface, this may not seem like it can save you money, but the insights provided can be priceless. Having access to real-time data can alert you immediately to issues like overspending and potential fraud. Detecting problems before they arise can save you from potential losses, like unauthorized or duplicate charges.

Convenient Accessibility

Many businesses need the convenience of being able to access data easily through cloud accounting. You and your accounting staff can access data from anywhere, anytime, as long as there’s an internet connection. This means the team doesn’t have to work in the office during business hours, and you can offer a more flexible working arrangement. Traditional accounting solutions are usually only accessible in the office or via company devices. The rise in remote and hybrid work makes cloud accounting a much more convenient and modern option for dispersed teams.

Cloud accounting services store your data in a single, centralized database that’s automatically backed up. All team members have access to the most current data—no more verifying that you all have the same version of each spreadsheet. A centralized database makes workflows more efficient and collaboration more effective.

What’s more, that real-time data enables you to make informed business decisions faster, since you can gather insights about how your company is spending money without having to wait until month-end reports are finished to analyze the data.

Extensive Security

While both cloud accounting and desktop accounting come with security risks, cloud accounting offers better prevention features to safeguard your data.

With desktop accounting, your data security is your responsibility; you have to ensure that no unauthorized users can access your information. The IT department has to make sure the network is impenetrable and grant access to sensitive files only to authorized users.

There are some security risks associated with cloud accounting, but they’re more manageable. Using a cloud service means your data is stored by the service provider. You have no visual or physical control over the servers, so you have to trust that the company is doing everything possible to keep your data safe. Cloud accounting services usually have several layers of protection, such as data encryption, access controls, two-factor authentication, and automatic backups.

Increased Scalability

Using cloud accounting can increase your business’s scalability and growth potential. It offers different tiers and add-ons to meet the changing needs of your company as it grows, and is always being kept current with new features and updates.

Cloud accounting services are also incredibly agile. They offer the ability to integrate different systems and apps as needed. You can even create and customize workflows and features within the software to increase your team’s efficiency.

Plus, the automation and electronic data storage that come with cloud accounting reduce the manual workload, allowing your team to get more done in less time. As your team becomes more efficient, the software will be able to keep up with the increased volume and transactional complexity.

Will You Also Put Your Head in the Clouds?

These days, more and more companies are opting for cloud accounting instead of desktop accounting software, and are seeing benefits ranging from cost savings, accessibility, enhanced security features, and scalability. Ultimately, the size of your company and your needs will determine whether cloud accounting suits your business—but there’s no doubt that it’s becoming an increasingly popular solution for finance teams around the world.

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Mesh Content Team