Cloud Accounting refers to the Accounting data maintained at the online server with the third party by using the internet service at a reasonable cost. Accounting data is maintained at the server at a reasonable space with no extra cost in respect of the Infrastructure either as Hardware or software or Maintenance and Control Equipments.
Cloud Accounting is not like the traditional Accounting system wherein the user has to be responsible for each and every aspect of the Accounting data. Here need of Desktop office or software or hardware and even Maintenance cost at a high-cost one has to take care of these all factors at their end.
Characteristics of Cloud Accounting
1. Cost-Effective:-
Unlike the Traditional Accounting software wherein cost is heavy in respect of the Hardware, software, Anti-Risk Software, and Maintenance that takes the cost too high. Moreover, there is a need for one person who has to care of these aspects in a timely manner with extra caution.
If we talk about Cloud Accounting, nothing to be worried about when Accounting is maintained with the certified Third Party that can be called as Cloud Accounting. It is much cost-effective and Reliable and can be suitable for any type of business either Small of Macro-level with the same cost to each user irrespective of the size of the business.
Cloud Accounting work on the basis of the Pay-Per user on a use basis.
2. Anywhere 24*7
As the cloud accounting is done on the server using the internet which is available 24*7 with the public that is the cloud can be at any hour at any time. One can upload the data on the cloud at any time which is very reliable for the user to use the cloud services. In the business hours if the data can not maintain the data on the cloud then he can do after the business hours also.
3.Upgraded Accounting Platform
Herein, the Cloud Service provider itself updates the latest Software version wherein Accounting data will be maintained.
So here the user doesn’t take care of the Software updation and no cost will be levied from the user point of view when the user uses the system.
4. Secured Accounting data
When your accounts are maintained by the accountant and if you want to see your accountant working then cloud he accounting services are very reliable. The accountant shall share the passwords and u can securely see the working of the accountant. If he wants some advice or support from you then, it can be done by using the software and go forward.
5. Tax payment is easy
Payment apps like GoCardless can be connected to your online invoices and accounting information like financial statements and others and people can make payment securely and reducing the time wastage and also reduce the load on your staff admin.
6. Remotely working
Sometimes have the situations that the employees of the organization are not in the place of their office because of their reason and then, the situation arrives that it is compulsory to upload the data urgently and it is not possible to arrive the data immediately so in this situation the cloud services can be used by him by uploading the data using internet services from the remote areas.
7. Automated Bookkeeping
If you are using accounting cloud services on the server, when u pass entries on the server then automatically the bookkeeping shall be maintained by using the accounting software. Bookkeeping includes passing entries, posting to ledgers, then the balances of ledgers to the trial balances.
8.Provide gateway with Online Payment
By using various payment banks like Paytm wallet, BHIM app, and online net banking, RTGS or NEFT you can receive the payments and make payments on the server by using the internet at any time and at any hour.
9. Real-time Information:-
By keeping your financial accounts and reconciliation statement up to date, you can achieve real-time reporting instead of looking at the historical records and balances of days, months, or the years to know the real-time position of the business entity. It is necessary to know the cash flow position, planning future investments, and making future vital strategic decisions.
10. Access to third party apps:-
Open APIs mean that you can add a range of data of third-party apps and tools to expand the core business system. These are cash forecasting apps, online invoicing apps, industry-specific management tools. These tools further save time, reduce resourcing costs, identify further problems in advance, and reducing the unnecessary pain of admins.
Disadvantages of maintaining the traditional method of storage
Traditional methods include maintaining the records in papers files, within folders, and filing cabinets. This is the alternative of electronic maintenance of records to a paper-based system.
The disadvantages are as follows:-
1. Data security:-
The maintenance of records in paper form is kept in a separate room of records where all the records are maintained. There are some who have access to that records only but it can happen that those have access to that can manipulate that records or take away that while in maintaining the records in an electronic form access is not given of all type of records to all the employees there is a division of access of records to a very few people according to their departments only.
2. Complexity:-
In maintaining the paper records there is a lot of hurdles faced by the employee in the finding of record which is required while in case of electronic maintenance there is no hurdle faced by the employee he can simply search the file name and he gets it when required.
3. Editing and communication:–
While maintaining the records in the physical form there is a lot of cumbersome to edit the records and a change is to be done and update process. There is a long process to be followed for the updating of the data and communicate them to all. There is to be to replace the old papers replaced with newly updated papers while in case of electronic maintenance records can be easily updated through MS word or MS excel and the updated files will update to all the databases automatically.
4. Order of Data:-
In physical maintenance of records, if someone kept any file or any record in the wrong place then, it is very difficult to find it when required. If it does not find at the right time then it will not good for the business and various obstacle can be faced by it while in contrary, in electronic maintenance of records on the cloud we can easily find the file or record on the server by simply searching the file name in the system.
5. Memory issue:–
Although the room is huge to the maintenance of records at one it shall be full and no storage will be available but this issue is not in the case of cloud services there is no issue of memory there is no issue of storage as the data is not stored in the hard disk and by chance, it is filed it can be bought again by paying a minimal amount of charge.