Technology is indeed transforming business processes. A business can leverage on cloud computing to improve efficiency of its operations. Cloud computing allows storing and accessing data and programs over the internet.
In this regard, there is a growing trend towards the use of cloud accounting solutions (software) to facilitate detailed financial reporting and data analytics. Markets & Markets projected the Finance Cloud market size to grow from US$ 135.6 billion in 2023 to US$ 268.1 billion by 2028 at a Compound Annual Growth rate (CAGR) of 14.6%.
Legacy Issues
The accounting industry like any other business enterprise also has its peculiar challenges to deal with. Conventional methods of storing huge volumes of financial data or maintaining reports can be cumbersome. Some of the other experiences and challenges that necessitate the need to transition to the cloud include the following:
- Accountants are required to work around the clock to provide a crucial financial data or report but may not be able to access accounting data outside office settings due to the traditional accounting software they have been using.
- A conventional accounting software usually takes a longer time to set up and require frequent maintenance after installation as well as an upgrade at additional costs. While budgets of some businesses can support increasing operational expenses, others find it difficult to onboard advanced IT infrastructure for maintenance. This is bound to impact accounting processes negatively.
- Accounting professionals are ethically bound to maintain confidentiality. However, any form of security vulnerabilities or loss of financial data can expose them to risks. Again, an outdated accounting software cannot counter cybersecurity risks when they occur. Moreover, traditional accounting software makes it difficult to recover data once lost.
- Old-fashioned accounting technology or software are prone to disruptions in business continuity. Disruptions can result from technical malfunctions, system errors or serious events like thunder and earthquake.
These uncertainties if they arise can disrupt business activities for many hours or even days to resume operations. The downtime invariably impacts on efficiency and productivity since businesses are unable to meet work schedules in the normal office work setting or physical space. In effect, prolonged discontinuity can lead to substantial financial losses.
Benefits of Cloud Accounting Solutions
Cloud computing is a transformational tool and has become a major catalyst for change in accounting practice to enhance operational efficiency and effectiveness. Cloud accounting software offers other benefits which include:
Data Visualization & Real-Time Reporting
Cloud-based accounting software replaces the traditional, inefficient accounting processes by providing real-time access to centralised financial data. There is a dashboard and built-in analytics tool to convert a complex data into easily understandable charts and key performance indicators (KPIs).
Cloud-based accounting software also supports budget forecasting and data harmonization for effective decision-making. Apart from basic accounting tasks, cloud-based accounting software (solution) can perform a multiple of other functions. It can serve as an expert resource for interpreting accounting standards or applying specific principles.
Collaboration
Cloud-based accounting solutions enable regular collaboration with accountants and ensure seamless processes. Seamless collaboration is driven by storing all financial data online in a single database or integrating with other applications to automate workflows. Because of this functionality, multiple users can work on the same file from various locations as long as they have reliable internet connectivity.
Value for Money/ Cost-saving
Many cloud applications offer several different accounting functions in the same place with regular updates. These saves the cost of downloading updates or buying different software for different functions with compatibility considerations at a high cost.
Markets & Markets’ statistical data confirms that financial cloud computing allows financial institutions to reduce capital expenditures by eliminating the need for extensive on-premises infrastructure.
A business can pay for services on a pay-as-you-go model basis and cost-effectively scale computing capacity. This payment model significantly reduces any upfront costs. The cloud also provides on-demand scalability and allow a business to manage fluctuations in customer demand and transaction volumes effectively. Cloud computing service developers are committed to innovation and introduce new features regularly to improve cloud-based systems.
Data Security
Cloud-based computing is a secure way to access and store data on multiple remote servers. Indeed, security threats exist in both the desktop and cloud environments, because hackers take advantage of any vulnerability in a system to attack.
But the large networks which maintain cloud-based accounting software systems are built with high security firewalls, data breach detection, encryption software and are continually monitored for intrusions and unauthorized access. Reliable cloud providers are data-security conscious and, therefore, protect their servers against cyber-attacks.
User-friendly
Cloud accounting software by functionality is user-friendly and efficient but the conservative user of traditional accounting system is reluctant to either adapt to it because they are not tech-savvy or risk adverse regarding data breaches (security of information in the cloud). The reality is that cloud accounting solution is the new order in financial management. It has built trust and used by reputable businesses across the globe. There is, therefore, need to adapt to the changing dynamics to remain relevant.
Document Storage
Accounting is a document-driven profession. For instance, invoices, receipts, bank statements and other documents are a large part of any accounting activity and require some amount of storage space.
Cloud-based accounting solution or software makes it easier to store documents in the cloud with automatic backups. That makes them easily accessible and makes document sharing easier with other users. It also eliminates filing cabinets and storage units in so doing saves physical office.
Accessibility &Flexibility
Cloud technology empowers 24-hour access to the cloud from anywhere while using any internet-enabled device thereby eliminating the need to work from one central office-based computer all the time. What is, however, required is an authorized access to the hosted environment. Data and other documents are safe even if a user loses a computer or forgets to back them up.
The FinovatePro Experience
FinovatePro is a new and state-of-the-art cloud-based software meticulously crafted for innovation-oriented businesses. It is accessible around the clock from any location via the internet or mobile device. It is indeed reshaping the landscape of financial management.
Thus, FinovatePro enables businesses and organizations to handle their own books as well as empower in-house professional book-keepers to supervise multiple subsidiaries or related companies.
FinovatePro has integrated and seamless features for alerts and notifications, expense tracking, multi-user access with a strong security and privacy. It supports automated bank reconciliation, fixed asset and inventory management as well as account consolidation. FinovatePro, therefore, delivers unmatched convenience and efficiency.
Conclusion
Cloud computing in accounting operations cannot succeed just by adopting a new technological application. It requires a mindset shift of how to run your business on the cloud and to leverage on the capabilities at hand to upscale operations. This means that a business will need to adapt to a new ethos of managing financial data in the cloud.
A robust cloud accounting software solution is indeed revolutionizing the accounting processes and enabling organizations to gain instant analytical insights into financial data to make informed data-driven decisions so necessary for business growth.
BERNARD BEMPONG
Bernard is a Chartered Accountant with over 14 years of professional and industry experience in Financial Services Sector and Management Consultancy. He is the Managing Partner of J.S Morlu (Ghana) an international consulting firm providing Accounting, Tax, Auditing, IT Solutions and Business Advisory Services to both private businesses and government.
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