What Are The Benefits Of Cloud Accounting?

In today's technology-driven world, more and more businesses are moving their operations to the cloud. Cloud accounting is one of the most popular cloud-based services for a good reason! There are many benefits to using cloud accounting, which we'll discuss in this post. Keep reading to learn more about why you should consider switching to cloud accounting.

Accounting can be a complex and confusing process, especially for small business owners juggling a million other tasks. But cloud accounting can make the process easier and more efficient, providing several key benefits.

Cloud accounting is online software that allows you to do your bookkeeping from any device with internet access. This means you can access your account from anywhere, making it perfect for small business owners who are always on the go.

Cloud accounting is a great way to manage your finances. By using cloud accounting, you can access your financial information from anywhere with an internet connection. This can help you stay organised and stay on top of your finances no matter where you are. Additionally, cloud accounting can save you time and money.

If you're like most business owners, you're always looking for ways to save time and money. One of the best ways to do that is by using cloud accounting. Cloud accounting has many benefits, including saving you time and money. In this blog post, we'll discuss some of the main benefits of cloud accounting.

Let's get started!

What Advantages Are There?

The world wide web started out as a collection of online documents that were static and linked to each other. Now, 25 years later, that linked information provides us the numerous benefits of transferring some of your activities, software, and infrastructure into the cloud. These benefits can be found in shifting some of your operations, software, and infrastructure into the cloud.

1. Access

Applications and services hosted in the cloud can be accessed and utilised from virtually any device that has an active internet connection. They are also available on a wide variety of apps for mobile devices including smartphones and tablets.

2. Security

Cloud service companies commit a significant amount of manpower and resources to ensuring the safety of the apps, files, and data that their customers put in the cloud.

3. Collaboration

Moving to the cloud has many advantages, but one of the most important ones is the increased potential for collaboration. The ability to communicate instantaneously and contextually, take notes together, and modify files and data as a group are just some of the ways that collaboration is embedded into many programmes.

4. Productivity

There is a possibility that increased productivity can be achieved through the use of collaborative capabilities and calendar, task management, and project management apps.

5. Reporting

Users of cloud platforms have access to useful reports that can improve workflow, marketing, the effectiveness of teams, client/member engagement, and other aspects of security. Reporting and analytics are two areas that are frequently neglected by non-profit organisations, despite the fact that the use of these technologies can permit significant improvements in the organization's overall efficiency and effectiveness.

6. Value for money

The costs of using cloud-based services and products are typically far lower than those associated with conventional software, both in terms of the overall costs of operation and, in many cases, the initial outlay of capital.

The majority of a nonprofit organization's information technology infrastructure and software can be effectively outsourced, allowing the organisation to focus more of its time, money, and brainpower on its primary objective.

Cloud Accounting For Small Business

Accounting in the cloud is useful for businesses of all sizes. Accounting on the cloud is a must for all sizes of enterprises, including the smaller ones. Because of this, we have focused on the following three explanations for why a small firm requires cloud accounting:

1. Convenience

In this day and age, practically everyone makes use of a mobile device such as a smartphone or tablet in order to complete various business procedures or transactions. Consequently, adopting cloud accounting enables you to access your financial information from any remote place, including your home or office, while you are travelling, or while you are already there.

You will be able to receive real-time updates on the transactions that have been completed as well as those that are still waiting. The fact that you are required to deal with less paperwork is the icing on the cake, so to speak. You may simply handle the financial aspects of your company with just a few clicks.

2. Easy access

In addition to this benefit, cloud accounting solutions alleviate the stress associated with shifting files from one desktop to another. When necessary, any member of the involved employees or associates can quickly and easily obtain the relevant information. The time-consuming procedure of spending hours disseminating data to your employees or having to rush about with folders bulging with bills and receipts is eliminated as a result of this, freeing you from either of those obligations.

3. Safe and secure

Accounting on the cloud is more dependable and secure than maintaining your essential financial data on your local system (susceptible to theft, loss or damage). The data for cloud accounting is kept in encrypted form on remote servers and accessed via the internet. This is in addition to the routine backups that are performed.

Cloud-Based Software Options

1. Saasu

Saasu has spent his entire life living in Xero's shadow. Nevertheless, it is a very qualified application, and you ought to give it some thought.

It is extremely comparable to the other competitors in this industry in terms of its functional capabilities. The primary dashboard places some important indicators in plain view, allowing you to concentrate instead on managing your company.

In this section, you will find a summary of your Profit and Loss report, cash flow, and Balance Sheet, as well as a list of overdue items highlighted in red and outstanding invoices and bills that need to be paid. You can rearrange all of things to make sure that the information that is most relevant to you is in an area that is easy to view.

Access to frequently performed tasks by a single click is the one feature that is lacking from the dashboard. For instance, in order to add a new invoice, I have the option of either going to the screen for sales or clicking the "add" button that is located on the top menu and then selecting sales from the list of items that appears. A significantly more sophisticated option would be to include a button labelled "Add new invoice" on the sales summary displayed on the dashboard.

Payroll, bank feeds, and inventory management are all functions that can be managed with Saasu; however, the number of annual transactions, employees, and bank feeds that can be managed by your account depends on the subscription level that you have purchased.

You will receive three bank feeds, 1000 transactions for the year, and neither payroll nor inventory management for the price of $15 each month. You can receive 100,000 transactions, 20 bank feeds, 100 employees, and a whole host of additional services for the low, low price of $180 each month.

Users of mobile devices are not excluded because there is a pleasant mobile application that makes it simple to record sales and purchases. On the other hand, the inability to modify the GST code for sales was quite frustrating for me. I tried to sell an item without charging GST, but the mobile app wouldn't let me modify the code. Although I don't think that will be a problem for everyone else, it was something that I came across.

2. MYOB Essentials

If you had asked your accountant for recommendations about which accounting software you should get for your company before cloud computing became popular, it's a safe guess that they would have pointed you in the direction of MYOB in one of its many incarnations as the best option. Although it has always been very well-liked in the Australian market, the company took a while to develop a cloud-based service offering.

Since MYOB's initial ventures into the realm of cloud software, Essentials has gone through a few iterations of rebranding. However, the product that is currently available is both reliable and simple to operate. It is far more user-friendly than MYOB's previous "accountants first" manner of operation and has moved away from that model.

The dashboard that comes with MYOB Essentials delivers all of the data that you would anticipate, but it does it in words that are easily understandable, such as "Money in" and "Money out," "Invoices owed to me," and "Sales objectives." This kind of wording is incredibly helpful for those who are running a business but are not accountants, like myself.

Creating invoices, paying bills, and performing other frequently performed tasks are typically no further than a single click away on the top menu. The capacity of Essentials to save scanned documents is one function that I found to be useful. For instance, if a vendor sends me a paper bill, I can scan it, save it within Essentials, and then link it to the payment process. This way, the full audit trail of the transaction is contained within a single location.

There is a large number of ready-to-use reports in the application, including the essential GST report that you need in order to finish your BAS and Profit and Loss (with a graphical version that is currently undergoing testing), Balance Sheet, and Trial Balance, so that you can make your accountant happy.

Because so many accountants still recommend that their clients use MYOB, the programme has a straightforward export function that enables you to compile all of the information that your accountant need into a single file for transmission.

Essentials, in contrast to the other SaaS programmes that I tried, does not supply you with sample company data that you may experiment with. Because of this, the only way to make use of the free trial is to input your information into the application, which is a procedure that takes a lot of time if you are just beginning the process of narrowing down your choices.

In addition, there is a smartphone app available. Through the use of MYOB on the Go, you are able to send invoices and collect payments while you are travelling. It is designed to be compatible with the MYOB PayDirect Reader so that you may accept payments through credit card. In addition, you have the option of integrating a cash register solution thanks to MYOB's involvement in the point of sale system Kounta.

3. Intuit QuickBooks

The accounting software industry also features a mainstay in the form of QuickBooks. Similar to the other applications that I researched, this one has an appealing dashboard that displays essential information such as income (divided into open, overdue, and paid in the previous 30 days), expenses, and profit and loss as soon as you log in to the programme.

The procedure for creating an account was quite convenient for me because a verification number was texted to my phone in addition to being delivered to my email address. You can gain access to a sample account after creating a free account with QuickBooks, which does not involve the use of a credit card. This allows you to become familiar with the software before you enter any of your own data.

Access to the most frequent business documents, such as invoices, costs, and timesheets, may be gained with only two clicks by clicking the + sign that is located on the menu bar. Payroll is a possibility, but it is an additional feature that is only accessible through the more expensive membership packages.

The immediate visibility of my GST status was one feature that I particularly appreciated. I was able to get a quick estimate of the amount of money I would owe the government on my subsequent BAS by clicking only one button on the GST menu that is located on the left side of the dashboard. In a similar manner, QuickBooks provides a quick picture of the balances in your bank accounts as well as the number of transactions that have not been reconciled.

It was simple to generate invoices, accept payments, and complete a variety of other routine tasks. You also have the choice to incorporate PayPal into your invoices, giving you the ability to accept payments by credit card. Despite the fact that PayPal's costs can be on the higher end, a business that is just getting started and isn't yet ready to set up a payment gateway with their bank can benefit from using PayPal.

When used for the first time, the mobile app designed for iOS is dependent on two-factor authentication. It was simple to generate invoices, record expenses, and organise contact information. Because it is possible to download bank transactions, the app is considered to be one of the mobile applications that offer the most functionality.

Is It Safe to Keep Accounts in the Cloud?

Cloud-based bookkeeping has a questionable reputation when it comes to data protection. In the realm of cloud accounting, security is a problem that is of the utmost importance because of the sensitive nature of the data linked with cloud accounting apps (for example, sensitive financial data and banking information).

However, when we also examine traditional computer accounting software, which offers the potential of major problems if a corporate desktop is destroyed, lost, or stolen, then cloud accounting is comparably extremely secure. This is because traditional computer accounting software stores sensitive data on the computer's hard drive.

Encryption and multi-factor authentication are two examples of the forward-thinking security measures implemented by the vast majority of cloud accounting services. These safeguards ensure that sensitive data is kept private. In addition to this, cloud service companies frequently distribute backup servers across multiple locations. This ensures that you will always have access to your data, even in the event that a single server network experiences an issue.

As a result, the data stored in cloud accounting is relatively extremely secure, in contrast to the information that is kept solely on-premises, which runs the risk of being damaged or destroyed in a fire, flood, accident, or any other natural disaster, and may never be recovered.

Emerging Trends

The idea of computing via the cloud is still in the process of being developed thoroughly. However, chief technology officers have been a driving force in the development of cloud computing as they seek to lessen the risk of internal outages and alleviate the complexity of computing hardware and housing networks in-house. This is one of the reasons why cloud computing has become so popular.

Top cloud technology companies invest billions of dollars each year in cloud computing research and development, making this sector one of the most lucrative in the technology sector.

For example, in 2011, Microsoft allocated 90 percent of its $9.6 billion research and development budget on the cloud. In addition, the trends look to be gaining momentum as projections from Centaur Partners, which were revealed near the end of 2015, had anticipated that income from SaaS will skyrocket from $13.5 billion in 2011 to a staggering $32.8 billion in 2016.

Cloud Computing – Questions and Answers

1. Functionality

What advantages does cloud computing offer?

The cloud provides a number of benefits to companies, including the following:

• Cost: Using the cloud can provide chances to eliminate the expenditure of purchasing hardware and software, as well as the cost of establishing and operating on-site servers or, for larger enterprises, data centres. You are the only one who has to pay for the cloud services that you use, but you should be aware that the convenience of these services can result in higher expenses if you buy more capacity than you actually want.

• The majority of the services offered by cloud computing are of the self-service and on-demand variety, which means that you can gain access to your data nearly instantly. Because of this flexibility, you may be able to put your decisions into action more rapidly.

• Performance - The most popular cloud computing services are supported by a global infrastructure of safe data centres that are kept up to date with the newest iteration of computing gear, which is known for its speed and effectiveness.

• Reliability is improved with cloud computing because it simplifies and reduces the cost of data backup, disaster recovery, and business continuity.

How often should accountants and tax professionals check in to see if there have been any adjustments made to the terms of their contracts or the quality of the services they receive?

It is expected of tax practitioners to review any changes that have been made to the terms of a contract or service and to consider whether or not these changes are relevant to their obligations under the Code of Professional Conduct (Code), particularly item 6 of the Code, which is concerned with maintaining client confidentiality.

The Practice Note on cloud computing is a list of things for tax practitioners to think about when it comes to cloud arrangements.

The list would provide tax practitioners with a good starting point from which to consider whether or not a contractual term that has been updated is relevant to their obligations under the Code, whether or not the cloud arrangement continues to be appropriate, and whether or not additional consent should be sought from affected or relevant clients.

2. Security

How can we ensure that the basic cloud storage services we use, like Microsoft, Adobe, or Xero, adhere to the appropriate security standards?

The Small Business Cyber Security Guide that is provided by the Australian Cyber Security Centre (ACSC) will be of assistance to those who wish to have a better understanding of the safety of cloud services such as Microsoft Office 365, Adobe, and Xero.

We are working together with the Australian Taxation Office (ATO) and the Australian Corporate and Securities Commission (ACSC) to offer some further assistance to tax practitioners. Maintain a close watch on both our website and the TPB eNews during the next few months.

It has been brought to my attention that Virtual Private Networks (VPNs) no longer provide a secure connection; is this the case?

VPNs appear to be the most appropriate instrument for the task at hand because they encrypt and anonymize our data, thereby preserving its privacy and shielding it from prying eyes. However, things can become more complicated; any technology that is not properly deployed or maintained might generate security vulnerabilities that the user did not plan to have.

It is important to make sure that you have chosen a reliable partner to assist you with the implementation of cloud security solutions. Ask questions if you notice something suspicious or if you are unsure about the safety of either yourself or your client.

How does using cloud-based accounting software installed by a client that the tax professional then utilises relate to our security requirements?

If the tax practitioner is inputting (and consequently disclosing) client information, they are still responsible for obtaining the client's consent to divulge the information to the third party. This is the case even if the information is not being disclosed (in this case, the cloud service provider). Disclosure is permitted, and one ought to take into account the factors that are discussed in our cloud computing Practice Note when doing so.

3. Providers

Is there a particular cloud provider that the TPB favours or suggests?

We are unable to make a recommendation for a cloud provider at this time. This is a business choice, and as such, you will need to investigate several providers and think about aspects like the following:

• What safeguards against unauthorised access are in place?
• In the sad case that there was a breach, what would take place?
• Who is the owner of the data?
• Who is allowed to view the data?
• Where are the data being stored, and is there a backup?
• What kinds of services and assistance are available?
• Does the service provider adhere to the privacy regulations that apply in Australia?
• Under what conditions would the service provider have access to your data, and under what conditions would they reveal it to a third party?
• Will you be contacted in the event that your data has been lost, breached, or the security of its integrity has been compromised?
• What kind of fees are associated with using the cloud service?

If in doubt, you should seek advice from the Office of the Australian Information Commissioner.

Would you ever think about employing an outsourcing cloud document service like Google Drive, Dropbox, or Box.com?

We are unable to comment on Google Drive, Dropbox, or Box.com; nonetheless, any service that stores data outside of Australia and the territories administered by Australia is considered offshore data storage.

How much can you trust the security precautions of a third-party provider? How can we accurately assess their level of security?

Before you hire a software supplier, you might want to discuss this topic with a computer technology consultant or specialist first.

4. Compliance

Can we obtain customer authorisations via email or DocuSign?

Yes, this does offer you with security so long as the customer has acknowledged receipt and acceptance of the terms of your contract and the use of cloud computing.

According to the Electronic Transactions Act of 1999, confirmation sent by email can be considered proof that is "in writing."

Does a tax practitioner still need to obtain authorisation, and if so, how, if the cloud-based software they employ does not provide a feature for their clients to make a declaration?

When you submit an approved form on behalf of your clients, you are required under the Taxation Administration Act 1953 to have first complied with the requirement that you have received a signed declaration in writing from your client.

This only applies to the submission of officially sanctioned forms, such as tax returns and activity statements. It does not imply that you need authorisation each time you contact the ATO to act on behalf of your customer because it is not required.

Let's say you use cloud-based accounting software, but it doesn't have the capability for you to make a statement. In this situation, we strongly suggest that a separate declaration be issued via email or letter, explicitly explaining which document is being authorised for lodging. This declaration should state the necessary information.

Your customer needs to keep the declaration (or at least a copy of it) for the next five years. After that, we strongly suggest that you store a copy of the declaration somewhere safe for future reference. No matter how it was delivered, be it by email or on paper, the copy can be saved on an electronic device.

Is storing this information here infringing on TFN safeguards if the cloud servers are located abroad?

Because they are principally responsible for the administration of the laws governing tax file number (TFN) disclosure, the Office of the Australian Information Commissioner (OAIC) and the Australian Taxation Office should be contacted with any questions that you may have regarding these regulations.

What steps is the TPB taking to stop accountants from securing a lien on client data when a client leaves?

The terms of the engagement and the nature of the data at hand will determine whether or not a tax practitioner is permitted to keep client data after a client has terminated their relationship with the practitioner. The circumstances under which it would typically be permissible for a tax practitioner to keep client property (including client data) by exercising a lawful lien are outlined in our Information Sheet on asserting a lien over client property, which can be found here.

Generally, to exercise a lawful lien:

• It is not enough for the tax practitioner to be acting merely in their capacity as an agent of a third party when they make their claim to the lien.
• The tax preparer needs to have actual or constructive possession of the client's property in order to complete the return.
• The unpaid debt or demand must have some sort of connection to the piece of property that is being used to secure the lien.

In addition, it is generally agreed upon that tax professionals can only stake a claim to a lien on the property on which they have personally spent time and effort improving the value of the asset.

As a result, a lien can only be placed on a piece of digital property, such as a software data file, if the tax practitioner has invested their time and effort into increasing the value of the item.

To Wrap It Up

In essence, cloud accounting is the new hot cake for organisations that want to handle their company finances in an environment that is convenient, efficient, and secure. This is because cloud accounting offers all three of these benefits. People were hesitant at first, but now almost everyone uses internet banking.

This is a great example to use since it demonstrates how attitudes can change. It is, in point of fact, the most secure route to take to get to the bank. In a similar manner, as the world continues its transition towards digitalisation, cloud accounting will help significantly to the success of both small and large organisations. So don't be left behind!