The accounting industry is facing a significant shift from traditional pen and paper based practices to more automated and flexible. One of the most advanced solutions used to accomplish this is cloud technology. Detailed here are reasons why accounting firms must switch to the cloud.
Reasons Why Accounting Firms Must Switch to the Cloud – Overview
According to Verified Market Reports, the cloud accounting market is expected to grow from $2630 million in 2019 to $4320 million in 2024.
Cloud is deemed a game-changer for many businesses. It helps accountants drive innovation by providing mobility and scalability of resources.
Accountants, CPAs, tax professionals, and other stakeholders save time, money, and efforts by harnessing the power of the cloud.
Here are some ways how the cloud can help you build a modern accounting firm.
Reasons Why Accounting Firms Must Switch to the Cloud
Your local office desktop restricts the movement of accountants, and it often becomes challenging to accomplish their everyday tasks with this setup. However, in order to streamline the accounting practice, professionals need anytime, anywhere access to the business data.
Adopting cloud technology enables remote working, wherein all of the information can be accessed from any internet-connected portable device like a laptop, tablet, or smartphone. You don’t need to commute back and forth from the office to complete any task or send files to the client on an urgent basis.
Hence, it promotes modern-day policies like work-from-home and also improves productivity.
Communication is key to running a successful accounting business. But, in the case of a global team, collaborating for regular meetings and work processes is not feasible with a local setup. Moreover, building a team-client relationship is a necessity for establishing modern-day accounting practice.
Cloud accounting solutions provide a common platform for your accounting team to share files, documents, and other financial data. It eliminates the need to email data every time, which reduces the redundancy of various versions of a file.
Also, it offers transparency to the clients so that they get regular updates on the relevant task. It helps to build trust with clients and serve them better.
As a firm grows, the demand for hardware and software resources also increases. Housing on-premise infrastructure for storage and management of information requires a lot of investment in terms of time, money, and efforts. This outdated architecture might not be the best possible option for many accounting practitioners.
Moving your accounting practice to the cloud enables you to upscale or downscale different resources like the number of users, RAM, and storage space depending upon the business requirements. Even when a business expands, there is no need to purchase and maintain additional infrastructure.
You can directly contact your cloud service provider to change the configurations that suit your needs. Moreover, even when the demand for resources declines, especially after a busy season, your cloud vendor can adjust them accordingly.
The security of data lies at the core of building a modern accounting practice. However, the data is vulnerable to various cyberattacks, accidents, natural disasters, or hardware thefts that can compromise the availability and privacy of information.
Storing business data on the cloud helps mitigate these threats. Most of the service providers offer security measures at virtual as well as physical levels. Some of the essential standards implemented for the same include:
- 256-bit data encryption/TLS 1.3
- Multiple level firewalls
- Multi-factor authentication
- Antivirus and anti-malware software
- Intrusion detection and prevention
- DDoS attack Prevention
Additionally, at the physical level, a competent cloud hosting provider executes round-the-clock CCTV surveillance, security personnel, fire alarms, biometric scanning, temperature controls, etc.
This means that you don’t have to worry about the confidentiality and integrity of data and can focus on your core competencies for better efficiency.
The expenses associated with setting up a local IT infrastructure, in-house servers and equipment can cost a fortune to accounting firms. Moreover, the cost of maintaining and updating the system is also high.
The use of the cloud cuts down the capital as well as operational expenses for running an accounting practice. As the data and apps are hosted on the cloud of the hosting provider, you don’t need to worry about any hardware cost. It helps promote BYOD (Bring Your Own Device) policies within the system for smooth sailing.
Additionally, you don’t have to hire an IT team to manage these resources as cloud vendors take care of that. Therefore, you can invest more money in modern-day tools and applications instead of deploying costly infrastructure.
Control over the workflow is required for an enhanced accounting practice. Most of the time, it becomes challenging for decision-makers in an accounting firm to track and analyze the situation of their business. Regular reports on everyday tasks are required for seamless operations.
Cloud technology enables you to monitor the performance, billable hours, job status, leaves, and more of any employee from a centralized dashboard. It helps to track the progress in real-time and make better business decisions. It ensures the development of the firm to keep up with the modern world.
Traditionally, data is often backed up in local systems manually to mitigate the chances of any loss. However, it is ineffective in case of hardware accidents and natural disasters like fires, floods, earthquakes, etc.
When an accounting practice is shifted to the cloud, the reliable cloud hosting providers offer Business Continuity & Disaster Recovery (BCDR) plans. It ensures the redundancy of data by storing information at multiple data centers that are at geographically isolated locations. Therefore, even if one of the centers is down, information can be retrieved at any time from other servers.
Everyday usage of massive infrastructure emits greenhouse gases that are harmful to the environment. Therefore, it is crucial to look for solutions that help to overcome this issue. But, often, accountants find it difficult to adopt eco-friendly methods without compromising their business growth.
Cloud technology offers an apt solution to this problem. It enables you to choose paperless options by virtualizing the practice. Moreover, it reduces the chances of throwing away old devices that, in turn, reduces carbon footprints.
Reasons Why Accounting Firms Must Switch to the Cloud – Summary
Building a modern accounting practice doesn’t happen overnight. However, adopting cloud technology provides agility and flexibility to make it possible. It is a one-stop solution that will help you in gaining a competitive edge in the market.
Hopefully these reasons why accounting firms must wtich to the cloud shed light as to why you may want to consider migrating from an outdated IT infrastructure to the technology of today.
For more articles like this, check out our business tech section of the site.