Accounting in the Cloud: Strategies, Benefits and Tools

Highlights:

• Cloud accounting offers firms a range of benefits, including cost savings, better data security and improved collaboration features.
• Accountants using the cloud can access their applications and data from any location with an Internet connection.
• Firms can shift to cloud accounting at their own pace. It’s not an all-or-nothing proposition.

Cloud accounting software is quickly becoming the new normal in the accounting profession. Our world has changed in the past decade, making most businesses at least partly remote, and the accounting industry has been no exception. Because of that, accounting firms need a solution that allows them to work smoothly with teams and clients in various locations. Local accounting software, bound to a computer in your office, is no longer sufficient.

The answer has come in the form of cloud computing. Cloud accounting software can be accessed from any device in any location, through a secure user portal. It can be utilized by your entire team and with clients so everyone stays connected and up-to-date on any pressing accounting needs. There are obvious benefits to this method, though some decision-makers still feel intimidated by the adjustment from on-premises software to the cloud. The good news is that it might be less complicated than you expect.

On this page, we’ll discuss everything you need to know about cloud accounting software: What benefits does it offer your accounting firm, what forms does it take and what does it look like to adopt it into your usual workflow?

What is cloud accounting? 

To start off, let’s go back to the basics and define a cloud-based accounting system. What is cloud accounting? It’s a method of accounting in which the firm is able to perform its work on a secure remote server. All data is stored in the cloud and can be accessed only through a secure user portal. Those who have permission to use that portal, however, can access the software from any device in any location.

What is cloud-based accounting software, then, and what are the different ways it can be used? The truth is that cloud-based accounting software can be used in many of the same ways that on-premises accounting software is, but the big bonus is that it can be utilized remotely. There are also added benefits, given that the software is in the cloud and can be accessed by those who aren’t in your office. Some cloud-based accounting software features include:

• Storing, reviewing and accessing financial statements and client data
• Protecting sensitive accounting information
• Creating invoices, reports and statements
• Organizing your workflow 
• Communicating and collaborating with clients, including deadline reminders

By February 2024, the staffing site Robert Half listed more than 5,000 remote accounting jobs, which speaks to the drastic change this industry has seen since the COVID-19 pandemic. New accountants getting their start in the field are often looking for hybrid or remote positions so they can have that flexibility. Because of this, more and more accounting firms have had to familiarize themselves with cloud platforms. 

Cloud accounting offers firms a comprehensive solution. With it, they can carry on with essentially all of the functions of their job through one secure remote server, accommodating remote or hybrid work for new accountants or more senior staff transitioning to spend more time at home. In the future, it might just be that we see even more of a need for cloud accounting. 

How cloud accounting differs from traditional accounting software

All accounting requires some kind of software. In the past, most firms used on-premises software, which means their software was installed on office computers. To serve an entire accounting firm, the software would need to be installed on every single computer, updated on every computer and maintained on those computers. A firm might also purchase an expensive local server in order to share files, or it might have to share files through email. 

This, of course, has its drawbacks. On-premises accounting software is expensive, for one thing. You need office equipment for every person who would use the software, an IT staff to maintain the office equipment and expensive software installed on every computer. Servers add an additional charge. 

It also takes a considerable amount of time. In order to collaborate with clients, files have to be emailed back and forth and then added back into the software. And if anything happens to the office computers on which the software is installed, teams could stand to lose all of their work.

Cloud accounting offers many of the same functions that on-premises software features. You can store and review documents, create reports and statements and draft invoices or notices through both. 

The key difference is that cloud accounting software is not installed on any one computer, but rather, it’s stored in the cloud and accessible through a remote user portal. Because of this, accounting teams don’t have to work in the same physical space. In fact, they don’t need a physical office at all, which means they don’t need the office equipment. 

Why use cloud accounting software, aside from the remote work benefits? The best cloud accounting platforms often have built-in technical support, so there’s no need for an IT team to maintain the software all on its own. You won’t need an office-wide server. And if anything happens to your office equipment or your power goes out, you don’t have to worry about losing your work. As soon as you’re back online, you can find all of your accounting resources, stored right there in the cloud and ready to use.

Benefits of cloud accounting

We’ve already touched on some of the benefits of cloud accounting software, but now let’s go a little more in depth. Cloud accounting can change the game for your firm, making it more efficient and flexible, and even boosting your team’s morale. Some of the chief advantages of cloud accounting include:

• Easy integration: With cloud accounting software, you don’t have to worry about installing it on every computer or setting up a dedicated server. It’s just a matter of purchasing the software and then establishing your team’s user portal. You can upload old legacy files with ease, saving time and avoiding the headaches that come with installing traditional software.
• Removing manual grunt work: You can use templates to automatically draft invoices and move data from your financial statements directly into your bookkeeping program. This eliminates much of the manual data entry, so your team can focus on what it does best.
• Easy collaboration, from anywhere: With remote access, your team and your clients can collaborate from any device. Instead of emailing documents back and forth, you can review them and make edits directly within the software itself. This makes for instant, convenient and efficient collaboration.
• Secure data: Because you’re using online software, you don’t have to worry about manually backing up your work. Everything is stored in the cloud and kept safe behind encrypted user portals. 
• Cost savings: One of the biggest benefits of cloud accounting is the cost savings. You won’t need to pay for constant training and updates, IT maintenance or office equipment. Instead, everything you need is built into the software itself and stored in the cloud.
• Data and documents in one central location: Instead of searching through files and emails, you can find everything you need in one central repository. Most cloud accounting programs also have a dashboard that is updated in real time, showing all of your analytics. 
• Enhanced security: Using the cloud eliminates the need for your staff to worry about installing the latest software patches and other updates that help to keep hackers and bad actors out of your data. With the cloud, these are handled automatically by your cloud provider.
• Recruitment appeal: Because you’ll be able to offer remote work, you can appeal to a broader range of talent, including Gen Z and younger millennial accountants.

Challenges with migrating to cloud accounting software

Any change can come with some amount of resistance, even when it’s a good change. This is certainly true in the business world, and cloud accounting software for accountants is no exception. While many firms are embracing cloud accounting software, others have lingering questions and concerns that can make the final step a challenge.

Which of the following statements concerning cloud accounting are not true?

• Cloud software is more expensive than on-premises software.
• It’s hard to migrate from on-premises software to cloud software.
• Cloud software is easy to hack and less secure due to being online.

If you answered “all of them,” you would be correct. These are all common myths about cloud accounting, but they can be easily disproved. 

Let’s start with the myth of cloud software being more expensive. Cloud software is typically purchased with a monthly or annual subscription. However, many of these programs have different plans, so you pay only for what you need instead of spending for features that you’ll never use. And since you won’t have to pay for new updates, maintenance, servers and added office equipment, you’re likely to save money. 

Change can be intimidating for many people, but migrating from traditional software to cloud software is actually easier than you might expect. Cloud migration processes leverage automation to help you migrate all of your files and information. You won’t need to install the software over and over, and many of these programs come with built-in tutorials, making training much easier for the whole team.

The most common fears about cloud accounting arise from cloud security myths. Because cloud software is online rather than on a local server, there’s often a fear that it will be easier to access and steal sensitive information. But is the cloud actually more secure than on-premises solutions? It depends on the program you use, but often, the answer is yes.

Cloud accounting software uses encryption to secure files – the same technology that banks use to protect digital information. This means that even if someone manages to hack into your cloud server, all of the data will be encrypted in an illegible code.

Features of world-class accounting software

Like anything else, cloud accounting technology can vary in quality. If you make the switch to cloud accounting, you want to be sure that you choose the right software. So what are the accounting software features that you want to keep an eye out for in world-class accounting software?

• A focus on collaboration: Collaboration is one of the most important benefits of cloud accounting software. The key is that you can collaborate from anywhere, at any time. So your platform should be built for connectivity and collaboration, including secure user portals that can be accessed from your device and dashboards that show your progress in real time.
• Comprehensive functionality for engagement and practice management: Your cloud accounting software should have a wide range of apps so you can manage your accounting practice and monitor your engagement directly from the software. A search engine is a must to help you wade through all of the different functions without wasting time.
• Flexibility and customization: No two accounting firms are the same, and what you need from your software may differ as well. Good cloud software will offer a number of application programming interfaces (APIs), so you can customize it to suit your own needs, including your workflow and analytics.
• Strong data protection and compliance: Again, most cloud accounting software uses encryption to protect data. Caseware, in particular, uses bank-level encryption to make sure that sensitive information is as safe as possible. A world-class cloud accounting platform will also have compliance measures built in so that you can always stay up-to-date with relevant regulations.

How to migrate your firm to the cloud

So perhaps cloud accounting seems like the right call for you, and you just need to get started with the software migration. With an accounting platform like Caseware, cloud computing implementation is a breeze. The cloud migration costs will be for the software itself, depending on how much functionality you need, and potentially to train your team. Caseware charges by user license, so the more users you need, the more you’ll pay up front. It’s a good idea to determine this beforehand so you can set your budget accordingly.

Here are the steps you’ll need to take:

• Choose your cloud accounting software, plan and features.
• Create user profiles and sign up your team and clients.
• Set up the platform in the way that suits your firm.
• Move old legacy files, statements and data into the new cloud software.
• Go through the tutorials or teach your team how to use the new software.
• Start working from your new cloud accounting platform!

You’ll also want to develop a change management strategy to help everyone on your team adjust to the migration from on-premises software to the cloud. Consider holding meetings where you can discuss the changes and answer any questions, and let your employees know whom in your firm they can speak with if they have further questions. This can also be a great time to dispel some of those myths mentioned above. 

The future of cloud accounting

We’ve said that cloud software is the future of accounting. But what is the future of cloud accounting? As we move further into 2024, let’s look at some of the accounting trends that speak to the future of the accounting profession with cloud technology:

• More AI and machine learning: AI is already used in many cloud accounting software programs to automate and optimize tasks and workflows. You can use AI for financial reporting, data entry and invoicing. But as AI continues to develop, we can expect to see even more advanced uses for it in cloud accounting technology.
• More data analytics: Data is essential for accounting firms today. In fact, more and more, practices that serve commercial businesses are asked to give insights into consumer behaviors and spending. This means accountants will need more complex, real-time data analytics to provide the best insights. With analytics dashboards and AI-generated reports, cloud technology is already rising to the demand.
• Big data: This concept refers to large and varied sets of data that are collected by organizations en masse. It gives you a breadth of information — but there’s also quite a bit to mine through. Accounting firms are likely going to look for cloud accounting software that can help them find relevant insights in both structured and unstructured data. 
• Remotely connected teams: Remote work has been on the rise since the onset of the COVID-19 pandemic. But four years later, remote work remains popular because many professionals have found that the traditional office space just isn’t for them anymore. With cloud accounting software being so easily accessible, you can expect more accounting firms to take advantage of that remote connection and even go fully remote.

Want to be a part of the future of cloud accounting? Get there with Caseware Cloud. Contact us today to request a demo.