So, what is Cloud Accounting?
Traditionally, accounting was executed using software hosted locally on a desktop. That is what your accountant would use on a day to day basis. Cloud accounting is simply accounting that is executed using software that is hosted remotely online, i.e. the cloud. To better understand what “the cloud” is, here is PCMag’s definition of cloud computing:
“In the simplest terms, cloud computing means storing and accessing data and programs over the Internet instead of your computer’s hard drive. The cloud is just a metaphor for the Internet”
The cloud has been introduced to many industries over the past several years and has transformed them, allowing them to operate more efficiently, cut costs, and reach their goals quicker.
HMRC has now decided that the annual tax return will be a quarterly digital tax account for all business and individual taxpayers. HMRC are aiming to make the digital tax account as clear and transparent as possible; it will be as easy as logging onto your online bank account. As of April 2016, every individual taxpayer was set up and given access to their own digital account. By 2020, HMRC will be interacting digitally with all taxpayers. What is important to understand is that this change will be mandatory for everyone.
You can access your digital tax accounts by means of cloud accounting
What are the benefits of Cloud Accounting?
Reduced business costs- software version upgrades, maintenance, system administration costs, and server failures are no longer problems. They are totally managed by the cloud service provider
Access to your data regardless of location or device
A clear overview of your current financial position, in real-time
An easy transition into a paperless work environment
Automatic account updates
Multi-user access, including anyone on your team and your financial advisors.
Is it Secure?
Cloud accounting provides an equally, if not even more safe method of storing financial information as traditional accounting software. For instance, important information stored on a laptop or desktop computer could easily be physically stolen, which could lead to information breach. Cloud accounting is both encrypted and password protected and the software leaves no trail of financial data.
Sharing data is much safer with cloud accounting as well. In the past you would need to share information with physical devices, like a flash drive, which could also be easily stolen. With Cloud Accounting, two or more people will have full access with their unique passwords that only they will know.
Lastly, cloud providers will keep several backup servers in many locations. At no point will all servers go down, and therefore you will always have access to your data. Data kept at a physical location could easily be lost, stolen, or damaged due to fire or natural disaster.
We want to make this transition as smooth as we possibly can. The sooner you start making the switch, the easier it will be for you. Please contact us today to discuss switching to Cloud Accounting.