Cloud Accounting Explained

Cloud accounting has definitely attracted much attention in recent times. This tax tip addresses some of the common questions that we have been recently asked.

What is cloud accounting?

Cloud accounting refers to accounting software that is accessed via your web browser over the internet. That means that your accounting data is securely stored 'in the cloud'. This differs from traditional accounting software, which requires you to install and access your accounting software on a local or network device.

Is cloud accounting secure?

In many ways, cloud accounting is more secure than traditional accounting software. Small to medium sized businesses are prime targets for computer viruses as they generally have fewer resources for securing computer data properly. However, with cloud accounting your data is stored on an offsite server with internet banking level security through which only an authorised user can access your data. This eliminates the need to send your data to your accountant through potentially unsafe means such as email, CD or USB stick as they can access the data directly on the cloud.   

What are the benefits of cloud accounting?

Cloud accounting offers a number of benefits for businesses including:

• Cost effective: Cloud accounting products are generally paid for on a monthly subscription basis, alleviating the upfront cost of traditional software, and include regular updates so you do not need to pay for costly upgrades each year.

• Accessible: As your data is stored in the cloud, multiple users can access the data at the same time, regardless of where they are located. All they need is an internet connection.

• Collaborative: As your data is accessible online, it is easier for your accountant to work with you. At any time your accountant, with your permission, can log in to your file, review your data, and provide you with proactive real-time advice.

• Efficient: Most cloud accounting products allow you to automatically download your bank transactions into the accounting file. Referred to as bank feeds, your transactions are sent from your bank directly into your accounting file, which means you can reduce the time needed to input your transactions and focus on what's important - running your business.

How do I get more information?

At Vantage Partners we are proud to be certified Xero Partners and a MYOB Connected Accounting Practice. If you would like more information about cloud accounting, the products available in the market, or assistance with getting onto the cloud please contact us.