In today’s digital world, almost everyone has heard the word ‘cloud computing.’ Some people know what it is, and some still wonder why it has become a buzzword. In simple words, the cloud offers businesses a platform to create a complete business solution.
You can store loads of data without buying any physical storage device, install multiple applications, not worry about system performance, and more. These are some of the perks offered by the cloud that make it an essential business technology.
As an accountant, you can get freedom from going to the office daily as the cloud allows you to access your data remotely (from any part of the world). The hours you save from commuting to the office can be utilized in other personal and professional productive tasks.
Cloud computing is a user-friendly technology that helps you conduct your business tasks on the web. It eliminates the need to invest in expensive IT infrastructure - data storage, servers, software purchase, and the like. It also eliminates the need to run and maintain this IT infrastructure. Your cloud provider creates a multitenant arrangement where multiple users share resources.
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What is cloud computing?
Cloud computing, in simple words, is the availability of physical systems and applications online. While traditional methods require a physical IT infrastructure, cloud computing infrastructure is the responsibility of the service provider to manage.
What is cloud accounting?
Cloud accounting is a better version of traditional accounting software. You need a web browser and an internet connection to access your accounting process; there’s no need to install any software, purchase licenses, set up an IT infrastructure - do not worry about software compatibility with your hardware.
All you need to do is login with your credentials (as simple as logging into your email account) and access the data stored in the cloud server. Cloud accounting has become the new normal for accountants to execute their tasks.
Cloud deployment models
The most common methods of cloud deployment are:
Software as a Service (SaaS)
Knowingly or unknowingly, every one of us has used this method of cloud deployment. Simply put, it allows access to third-party software or data storage over the Internet. Google Drive is the most common example.
Platform as a Service (PaaS)
It is most commonly used for software development. The developers need an operating system, database, and other resources. The vendor deploys the necessary resources for them on the cloud.
Infrastructure as a Service (IaaS)
In this deployment model, you rent IT infrastructure from the vendor for your business purposes. For instance, you can use it to host your website or accounting software like QuickBooks on the cloud and access it over the web.
How has cloud computing transformed accounting?
There are numerous ways in which cloud computing has evolved accounting. The most significant transformation has occurred in the flexibility to access data. Accountants have the freedom to access their accounting data from the device of their choice and any part of the world. Secondly, the cloud data is updated on a real-time basis, which means that all the reports generated provide the latest information.
Thirdly, the revenue required to scale IT resources has been reduced considerably. You do not need to worry about purchasing additional software licenses, data storage, RAM, etc. Also, you can hand over your maintenance worries to your vendor. Most vendors have a team of IT experts that looks after server maintenance.
Lesser-known benefits of the cloud for accountants
Seamless Document Management
Accounting tasks involve loads of documents - purchase orders, sales orders, invoices, account statements, payslips, etc. However, transactions are now done online, and e-documents are in trend. The cloud helps accountants and accounting firms to collect and manage these e-documents and use them whenever required.
Security and SLA Standards
Unlike traditional accounting, the cloud allows accountants to ensure that their clients' data is safe and follows the standard rules and regulations. All these security details are mentioned in the Service Level Agreement (SLA) of the cloud vendor. The cloud vendor has to adhere to the security measures - SLA is the guide to how the provider will offer the services and respond to the tickets logged by the users.
According to a study by Nature, there are almost 3 trillion trees in the world. Although, as per the experts, billions of them are cut down each year to fulfill human needs. One of these needs is the production of paper for various purposes (and accounting is one of them). However, the cloud promotes online transactions and helps store the documents of these transactions electronically, building a ‘paperless accounting’ culture.
Better Customer Relationships
Cloud computing is the perfect tool to build and enhance customer relationships. With role-based access and file sharing, you have the power to share documents with your clients. This way, you can offer better transparency to your clients and gain their trust. Cloud computing also offers remote access - it helps accountants gather essential documents for tax filing and other purposes. Thus, the cloud's overall impact is increased efficiency and decreased costs - accountants can also offer some discount on their services to attract the clients.
The impact of the cloud is in its initial phase in the accounting industry. However, its benefits will surely boost the wide adoption of the technology in the coming years. It will be interesting to see how and when this technology becomes mainstream. However, Gartner predicts that 60 percent of the organizations will use cloud services managed by an external provider by 2022.
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Sharad Acharya, technical content writer, Ace Cloud Hosting (opens in new tab)