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Cloud accounting software is accounting software that is hosted on remote servers. It facilitates accounting capabilities to businesses similar to the Software as a Service (SaaS) business model. The data sent to the cloud is processed and returned to the user. Cloud accounting software can free the business from having to install and maintain on individual desktop computers. It also allows employees in other departments, remote or branch offices to access the same data and the same version of the software version.
Cloud accounting applications are offered typically in two formats. They are
1. Hosted Applications: They involve the desktop or client accounting application running on a remote server. A remote session via the internet allows gaining access to the accounting software. This solution allows using existing data and software.
2. Software as a Service: The accounting data and software are stored on the provider's servers and are accessible via a web browser through this format.
The cloud platform makes data and software accessible online anytime, anywhere, from any device. It allows business owners to stay connected to their data and accountants. The software can integrate with a whole ecosystem and is scalable, cost-effective and easy o use. The ways in which a cloud accounting software benefits an organization are
• Can provide a clear overview of the current financial position in real-time
• Facilitates multi-user access which makes it easy to team online with advisors
• Automatic updates
• Data is backed up automatically and everything is run online which provides instant availability
• Reduced business costs. Version upgrades, maintenance, system administration costs and server failures are managed by the service provider.
The cloud accounting software evolution is just in its beginning. It will take time to figure out whether they will be the next paradigm shift in the world of accounting. There is still much more to learn these solutions and their impact on business.