Entrepreneurship is being seen as a rewarding proposition but, it is equally associated with inherent risks and failures. We are not getting skeptic here, but the facts clearly suggest that only a fraction of entrepreneurs make it to the elusive rich club.
Therefore, as soon as you launch your startup, you have to tick all the boxes and put every working strategy in place in order to make it successful. Accounting is one such important aspect of a business and its poor handling could lead to serious problems for you. Which is why, cloud accounting can solve your problem in this regard. Moreover, greater numbers of small businesses are now using cloud accounting to address different data security issues.
What Actually Is Cloud Accounting?
“Cloud Accounting” refers to software that is hosted on remote servers. It is based on Software-as-a-Service (SaaS) business model wherein data is kept in the cloud, gets processed and can be accessed by users. There is no need to install, maintain and perform application functions on individual desktop computers. The biggest advantage of cloud accounting is it allows employees in different departments to access and share data with each other.
Cloud accounting is different than traditional accounting software in many aspects. It is more flexible and can be accessed or worked upon anywhere on any computing device. It can automatically update the financial information of a firm in real-time, which makes account balances of the company accurate and free from errors. Cloud accounting is also better able to handle multi-company transactions. One of the most remarkable features of cloud accounting is that business owners and accountants can now work on the same file simultaneously eliminating the need of data transfer and physical meetings.
Here are some ways in which cloud accounting will help your startup in future:
1. Better Connectivity & Accessibility
Cloud accounting or more generically online accounting allows small businesses stay connected to their data and their accountants. It is not just scalable, cost-effective and easy to use, but it is highly accessible as well. Bigger companies always have an edge as they develop their in-house accounting systems that utilize huge data servers, along with skilled IT staff and better security systems. Startups, on the other hand, have to compete with these players with limited resources at their disposal. There is where cloud accounting played a key role for startups to counter the established advantage in favor of larger companies. So, with the help of cloud accounting software, startups and small businesses can access advanced financial management technology.
2. Improved Cash-Flow Management
If you are seeking capital investments for your startup, you have to constantly manage your cash flow. Investors are particularly interested in your detailed cash-flow statements because it will ensure your startup’s potential long term viability. It is important to periodically review balance sheets along with prioritising future expenses, which is time-consuming and complex process. In the past, accountants usually struggled with this and fell short of delivering. So, with the availability of cloud-based accounting system, you will be highly likely to continuously update your cash flow. Consequently, you will be able to demonstrate your prospective investors regarding your future growth prospects.
3. Turning Invoices Into Goals
With the help of cloud accounting, you are able to track invoice volume as well as amounts for a monthly comparison to see whether you are inching towards your goal. The fact is when you have an up-to-date view of your current financial situation; you make better informed decisions about your future by realizing your goals. Online accounting also allows you to create an ecosystem wherein you can integrate your business with other online apps. Since, invoicing software is an ideal solution for invoicing and accounting, which has one of the largest inventory of ad-ons available.
4. Much Improved Focus
In general, it is challenging to deal with a company’s accounting process. To eliminate unnecessary and minor steps can provide much needed focus that your startup needs. Moreover, using cloud accounting, you will be able to stay within budgets and resourcefully use funds in order to carry out new product research and development. You can devote more time to perform your most important tasks so that you will have an edge over your competitors. Therefore, you will be able to put efficient workflows in place and create a productive work environment.
5. Increased Data Security
Data security is an important and ongoing aspect for small as well as larger and well-established companies equally. Bigger companies have developed robust systems to secure their data, while startups can at times be vulnerable in this regard as compared to their counterparts. So, cloud-based accounting software can safeguard your startup’s data by providing automatic backup, dedicated firewalls, encrypted data storage, and specialised data centre servers.
Cloud accounting is essentially a newer approach of accessing accounting software without actually installing it. It is helping startups and small business owners in many ways. With the help of cloud accounting, businesses can see their account balances, outstanding invoices, and overall cash-flow. Many businesses that migrated to cloud accounting have reported cost savings and greater efficiencies. It is a win-win model for businesses and their accounting teams.