Cloud Bookkeeping: What Is It and Why Is It Important for Small Accounting Firms?

The word ‘cloud’ has revolutionised the accounting world and has a whole new meaning to it. Businesses have long been using desktop bookkeeping software to maintain records of transactions. But with the advent of cloud computing, how businesses keep track of transactions and maintain their books has changed significantly, giving birth to cloud bookkeeping.

As the accounting industry undergoes significant changes in terms of technology and digitalisation, upgrading to a paperless, flexible, and secure bookkeeping solution is essential. Moreover, since accountants are often loaded with work, small and medium practices look for easy implementation solutions and make their processes hassle-free.

What is Cloud Bookkeeping?

Cloud bookkeeping simply refers to the process of saving your critical financial data on remote servers on the internet instead of your computer’s server or hard drive. This ensures increased flexibility and security for accountants as opposed to traditional paper-based or computerised bookkeeping methods.

Cloud bookkeeping has numerous advantages for bookkeepers, particularly for small and medium-sized accounting firms. Since these firms battle severe capacity issues, using cloud computing for core accounting and bookkeeping tasks can help save a lot of time and effort.

Although the technology is promising, some accountants remain averse to its benefits. This is orchestrated by several myths, such as the technology being highly cost-intensive. While it may initially take some money and effort to set up the process and train staff, cloud bookkeeping is ultimately a blessing for accounting firms.

Besides, accountancy practices that do not have the capacity and budget to switch to new technology can opt for profitable solutions such as outsourced bookkeeping services to give the process a head start.

Benefits of Cloud Bookkeeping for Small Accountancy Firms

When it comes to small accountancy firms, the challenges are abundant. But with it also come numerous opportunities to develop, scale, and grow business constantly.

Bookkeeping is a highly time-intensive and cumbersome task. Accountants at small firms are often caught up with these basic compliance tasks, which prevents them from focusing on higher-value services.

This is where cloud bookkeeping comes into the picture. It helps make accountants’ job simpler by automating strenuous tasks and reducing duplication of work. Considering its benefits, leading outsourced bookkeeping providers, too, use the technology extensively.

Efficient Backups

One of the biggest challenges accountants face with respect to bookkeeping is backing up data. Since bookkeeping software only saves data to your computer’s hard drive or server, accountants are at the risk of losing it. Therefore, they are often forced to invest additional time and effort in taking multiple backups.

Cloud bookkeeping, on the other hand, saves data on the cloud, i.e., on multiple remote and secure servers. This not only makes data easily accessible whenever required but also prevents it from getting lost or corrupted.

Enhanced Security

No matter how strong your IT security is, if you store critical financial data on your computer or local network, it is always at risk. With cybercrimes on the increase, you need a foolproof system to ensure complete security of your clients’ data.

Leading cloud solution providers employ strong security measures such as SSL certificates to protect your data from leaks and theft. This is also why top outsourced bookkeeping companies recommend cloud-based accounting.

Real-time Financial Reporting

Another major advantage of cloud bookkeeping is that it allows real-time financial reporting for accountants. Small accounting firms often have clients that are new to business. These clients do not have a set process to record transactions, which may result in significant bookkeeping errors.

Returning and revisiting each transaction to maintain clients’ books is challenging and time-consuming. With cloud bookkeeping, you can automate the cumbersome process of capturing data and thus record transactions in real time. Moreover, these transactions can be accessed or modified anytime, anywhere, as required.

Easy Collaboration

Post the pandemic, several businesses have adopted remote and hybrid work models. In this scenario, it is important that accountants and stakeholders be able to access and manage data easily for smooth collaboration.

Unlike traditional bookkeeping methods, cloud bookkeeping allows for the centralisation of data and facilitates easy collaboration, irrespective of location.

Improved Accuracy

Unlike manual bookkeeping, cloud bookkeeping helps improve accuracy by automating processes and minimising human intervention. Cloud solutions automatically capture and process data from linked accounts, thus reducing the scope for errors and making the process more efficient.

Need Support to Implement Cloud Bookkeeping?

We understand that transitioning to new technology can be intimidating. But considering the pace at which the accounting world is evolving, technology is the future.

While cloud bookkeeping is highly beneficial, small accountancy practices may not have the budget and capacity to implement massive technological changes. This is one of the reasons accountants in the UK outsource bookkeeping services to reliable service providers like QXAS.

Outsourcing is a surefire way for small and medium-sized practices to bring about technological changes at reasonable costs with the help of skilled outsourced staff. It also helps free up your internal teams so that they can focus on skill development and higher-value services.

To learn more about cloud-based bookkeeping and how outsourcing can power your firm, book a free consultation with our experts today or drop us an email at [email protected].