Cloud Accounting 101: How Does Cloud Accounting Work?

The recent COVID-19 Pandemic, along with the fast pace of technological innovation, has shown that industries need to be adaptable to any situation to ensure continuous operations – that we must be able to mitigate any threat to the company.  

With this, cloud accounting is a welcome development in the accounting industry that allows finance and accounting professionals to continue their work despite any situation. It allows professionals to work from any time and any place and easily ensures that your accounting team’s operations are not disrupted.  

What is Cloud Accounting? 

Simply put, cloud accounting performs the same tasks as traditional accounting software, except that it runs through the internet and private servers and can be accessed using web browsers. 

Read: 5 Ways Cloud Accounting Improves Financial Efficiency 

How Does Cloud Accounting Software work? 

Business owners, accountants, and other employees who were given access can use cloud accounting software. Accountants use accounting software to perform their tasks while business owners and other employees can add the necessary documents and other files. These files and processes are all stored securely to help everyone access them and maintain a record of all transactions. 

What cloud accounting software is best for small businesses? 

QuickBooks Online 

Currently the market leader of cloud accounting software providers, QuickBooks Online is the cloud version of Intuit’s QuickBooks. 

Xero 

Xero was once a young and fast-growing cloud accounting software. Today, Xero has made a name for itself and is widely used in Australia, New Zealand, the United Kingdom, and the United States.  

FreshBooks 

FreshBooks is an easy-to-use software designed with startups and small businesses in mind. Like others in this list, FreshBooks also has its own mobile app to help users access the software on-the-go. 

Why switch to Cloud Accounting 

Access anywhere in the world 

Going abroad for a vacation? No need to worry! You can still check on your company’s finances anytime, anywhere as long as you have reliable internet access. 

Fast response and results 

Cloud accounting software provides real-time results. Through real-time results, business owners and other executives can make the right calls with the right numbers. 

Reliable security 

Keep your files safe in a digital location. Cloud accounting software, as well as cloud storage services, keeps your files in secure servers which can only be accessed by users who were given permission. 

Cost savings 

Saving time is saving money. Cloud accounting automates some of the most time-consuming accounting processes. In addition, you also avoid the cost of setting up and maintaining your own server. 

Cloud accounting’s adaptability and highly customizable functions allow companies to secure their data, remove any geographical hindrance and reduce operational costs in their financial management efforts. As you decide on whether it is time for your company to integrate the use of cloud accounting into your accounting processes, make sure to look into each software as different cloud accounting software have different tools and services available.  

Read Next: How to be a Paperless Company with Cloud Accounting  

Want to learn more about Cloud Accounting?  

We have a wide expertise in handling the numbers of businesses across various industries and broad experience in using cloud accounting software to help your company manage your finances and ensure success. Contact us today and we'll help you find the right solution for your needs.  

You can also get our free Business Analytics whitepaper for more information on how you can leverage data to drive your business forward. 

 This post was first published on 5 July 2015 and edited 6 October 2023. Edited by: Aly Tagamolila