Cloud accounting technology has become a transformative tool for businesses, shifting old-school traditional accounting practices while also streamlining financial operations.
The arrival of cloud computing has significantly impacted the accounting industry. Cloud accounting technology, which uses web-based accounting software hosted on remote servers, offers businesses a comprehensive and integrated solution for managing their financial records, transactions, and reporting.
There are three principal benefits that are frequently seen by organizations that invest in cloud-based accounting technology:
Ease of Access
Cloud accounting technology provides access to financial data from anywhere at any time. When your data is hosted on the cloud, this allows you to securely access financial information from any device with an internet connection, which empowers owners, accountants, and others to stay connected, make real-time decisions, and respond rapidly to developing opportunities or challenges.
Lower Operating Costs
Implementing and maintaining traditional non-cloud accounting systems is often pricey, requiring significant front-end investments in software licenses and hardware. Conversely, cloud accounting technology operates on a subscription-based model, removing the need for costly upfront expenditures. Robust cloud accounting systems still require upfront implementation costs, but this investment is less costly compared to non-cloud systems as organizations are not required to purchase licenses and hardware. Businesses, nonprofits, and other organizations can pay for the services they require and scale their usage as needed. Additionally, cloud accounting minimizes ongoing maintenance expenses, as software updates and technical support are included in the subscription fee.
Collaboration and Integration
One of the most impactful elements of cloud accounting platforms is that they enable seamless collaboration between business owners, executives, accountants, financial advisors, and anyone on your team who relies on financial information to do their jobs. These systems allow real-time data sharing, documented audit trails, and simultaneous access to financial records, encouraging better communication and coordination among team members. Cloud-based systems also allow for integration with other cloud-based business applications, such as customer relationship management, accounts payable, or payroll systems, further streamlining processes, and eliminating manual data entry, reducing errors and improving efficiency.
By leveraging cloud accounting technology, organizations can optimize their financial management processes, make informed decisions, and gain a competitive edge in the dynamic marketplace. At Wegner CPAs, our Accounting Solutions Group supports, recommends, and implements a variety of cloud-based systems including QuickBooks Online and Sage Intacct with Sage Intacct becoming the most popular as it allows for growth and scaling, along with more customized reporting capabilities and functionality.
To complement these cloud accounting systems, we typically recommend our clients take advantage of third-party applications to manage accounts payable, accounts receivable, credit card expense reporting, employee reimbursements, and time tracking. For Accounts Payable and Accounts Receivable, we typically recommend working with BILL (fka Bill.com) as it is very user-friendly, offers electronic payments and receivables, storage of all documents, and has an audit trail. Regarding credit card expense reporting and employee reimbursements, these typically can work hand in hand and operate in the same systems of Nexonia or Expensify by having employees create expense reports that document transaction coding, receipts, and approvals before syncing to the accounting system. We also leverage Nexonia for time tracking, if necessary, but prefer employee time tracking to live within a payroll system that will sync to the accounting system. To further support cloud-based accounting, there is an abundance of systems and applications available, and the competitive landscape of the field ensures constant evolution and improvement of these systems and offerings. The Wegner CPAs Accounting Solutions Group continuously monitors and vets available systems that may be beneficial to our clients, and organizations should do the same when deciding to implement a new accounting system or application.
This information is very helpful if you know your organization is ready to implement a cloud-based accounting system, but how do you know when it is time to make the change? Our team has worked with hundreds of clients that all have unique needs and goals. Through our experience, we have found a few common situations that may indicate it is time for your organization to make the switch to a cloud-based system.
If your organization can identify with any of the following situations, then it may be time to start the implementation process.
You are experiencing growth
If your organization is experiencing an increase in revenue, transactions, or employees, it may be a reason that your current accounting system is becoming inadequate, cumbersome, or too time-consuming to properly maintain. Cloud accounting platforms can handle large volumes of data and offer scalability, allowing businesses to grow without system restrictions.
Too many manual processes
If your accounting processes revolve around manual data entry, reconciliation, or reporting, a cloud accounting platform can automate many of these tasks. Automation can reduce errors, save time, and allow your accounting team to focus on more strategic activities. At Wegner CPAs, our team will automate tasks for our clients, utilizing these systems so that we can provide more strategic services and improve efficiency.
Your workforce is largely remote or hybrid
If your business operates remotely or has multiple locations, a cloud accounting platform enables real-time collaboration between offices or remote team members, and access to financial data from anywhere with an internet connection. This flexibility is particularly important when multiple team members need to work on the same data simultaneously.
Lack of integration with your current systems
If your current accounting system doesn’t integrate well with other systems, such as accounts receivable and accounts payable payment applications, and it is affecting efficiency and productivity, it may be time to consider a cloud accounting platform. Integration capabilities can streamline data flow, eliminate duplicate entries, and provide a holistic view of your business operations.
You can’t access real-time data
If it is challenging to access up-to-date financial information or generate timely reports, and this has begun to affect your operations, it is time to upgrade systems. Cloud platforms offer real-time data synchronization and customizable reporting options, allowing you to make informed decisions in a timely manner. This will allow your organization to improve efficiency, ensure necessary parties are on the same page, and free up valuable time that used to be spent compiling and distributing information.
If your organization is considering migrating to a cloud accounting system, it is important to spend adequate time researching different systems and providers to find one that would meet your organization’s needs in both the short term and the long term. With the multitude of options on the market, it may feel overwhelming to start this search. Reach out to your Wegner CPAs representative for more information or guidance on cloud-based options for your organization.