{"id":17243,"date":"2023-09-13T13:20:00","date_gmt":"2023-09-13T13:20:00","guid":{"rendered":"https:\/\/synder.com\/blog\/?p=17243"},"modified":"2025-12-23T17:16:01","modified_gmt":"2025-12-23T17:16:01","slug":"unlocking-the-power-of-cloud-accounting","status":"publish","type":"post","link":"https:\/\/synder.com\/blog\/unlocking-the-power-of-cloud-accounting\/","title":{"rendered":"Unlocking the Power of Cloud Accounting: Benefits and Best Practices for Small Businesses"},"content":{"rendered":"\n

Proper accounting means paying employees on time, keeping financial records intact, and submitting business taxes accurately. <\/p>\n\n\n\n

The problem for many businesses<\/a> is adopting a more efficient approach to their central accounting. Luckily, there\u2019s a simple solution: cloud accounting.<\/p>\n\n\n\n

In this guide, we\u2019ll explain the power of cloud accounting. We\u2019ll also cover some benefits and best practices you can implement when taking this approach for your business.<\/p>\n\n\n\n

Let\u2019s dive in. <\/p>\n\n\n\n

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Contents:<\/b><\/h2><\/p>\n\t

1. What is cloud accounting?<\/a><\/p>\n\t

2. How does cloud accounting work?<\/a><\/p>\n\t

3. What\u2019s so special about cloud accounting?<\/a><\/p>\n\t

4. Top benefits of cloud accounting software<\/a><\/p>\n\t

5. Cloud accounting best practices to follow in 2023<\/a><\/p>\n\n\n\n

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What is cloud accounting?<\/span><\/h2>\n\n\n\n

Cloud accounting is the process of storing accounting software, reports, and financial documents on a remote server. Let\u2019s use Netflix as an example to drive this point home. <\/p>\n\n\n\n

With Netflix, you can watch your favorite movies and TV shows. Do you want to know why? <\/p>\n\n\n\n

It\u2019s because all of their content remains on remote servers. Whenever you select a movie, its content is pulled and broadcast to your screen.<\/p>\n\n\n\n

Cloud accounting works in the same way. Whenever you log into your accounting software, you can pull your company\u2019s data straight from a remote server. This nifty feature provides convenient and secure access to your financial data.<\/p>\n\n\n\n

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In other words, cloud accounting is the answer to solving the problems of efficiently maintaining your company\u2019s financial records.<\/p>\n\n\n\n

How does cloud accounting work?<\/span><\/h2>\n\n\n\n

Cloud accounting works by storing all essential accounting functions over a remote server. Remote access makes it easier for all members of a company to access vital financial documents.<\/p>\n\n\n\n

With the cloud, a company doesn\u2019t have to install (and set up) accounting software on every employee\u2019s computer.<\/p>\n\n\n

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That way, financial planning and analysis (FP&A) teams and accounts receivable teams can all work together across different time zones and locations. Getting everyone on the same page is beneficial for reducing time, costs, and accounting errors. <\/p>\n\n\n\n

On top of that, cloud accounting uses disaster recovery and data backup to protect your data in emergencies. Unlike traditional accounting methods, you store your data on a secure server, safe from technical problems, fire, and disaster.<\/p>\n\n\n\n

What\u2019s so special about cloud accounting?<\/span><\/h2>\n\n\n\n

With traditional accounting, data access is geographically limited. Financial records are usually stored on hand, on computers, or in old-school filing cabinets. <\/p>\n\n\n\n

This setup makes multi-user access and remote collaboration virtually impossible. Also, keeping physical and financial records can mean unauthorized access and possible destruction from natural disasters (like Hurricane Sandy which hit New York City in 2012).<\/p>\n\n\n\n

Top benefits of cloud accounting software<\/span><\/h2>\n\n\n\n

Are you still not convinced that cloud accounting is the right move for your business? Don\u2019t worry. Let\u2019s dive into a few of the main benefits this \u200csoftware can bring to your organization. <\/p>\n\n\n\n

Access your financial data anytime and anywhere<\/h3>\n\n\n\n

One of the biggest benefits of cloud accounting is 24\/7 access to financial data for all key collaborators. With cloud-based accounting software, you no longer have to worry about updating desktop software. <\/p>\n\n\n\n

Most providers also have mobile apps you can use to access important data on the go. The beauty of cloud accounting is that it removes silos by making financial data available anytime. <\/p>\n\n\n\n

Get a 360\u00b0 view of your financial health<\/h3>\n\n\n\n

Cloud accounting also helps companies gain critical insights into their financial health. Back then, companies had to flip through hundreds and even thousands of financial documents to create reports. <\/p>\n\n\n\n

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Nowadays, cloud accounting software can do all this work for you. That means you can make real-time decisions and improve the trajectory of your company. With this capability, you can focus more on meeting the rapid demands of running a successful business. <\/p>\n\n\n\n

Use workflow automation to save time<\/h3>\n\n\n\n

Some important accounting processes are time-consuming and take away from urgent business tasks. For example, many companies have to schedule payments to vendors and freelancers every month.<\/p>\n\n\n\n

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All of these invoices are for different amounts and on different terms. With cloud accounting software, you can create automated workflows to streamline these tasks. <\/p>\n\n\n\n

Here’s how this can work. You can set up each of your vendors with specific identification numbers. Furthermore, you can set up recurring payment dates for invoices for each vendor. <\/p>\n\n\n\n

For freelancers, you can use the digital timesheet a time tracking app<\/a> generates of all tracked work hours. Time tracking softwares can automatically organize all work hours on a digital timesheet that you can then export to your payroll software.  <\/p>\n\n\n\n

The result? You save a lot of time during monthly reconciliation. That\u2019s a huge win.  <\/p>\n\n\n\n

Improve workplace collaboration<\/h3>\n\n\n\n

Cloud accounting makes it easier to work with your accountant at any time. Your professional accountants can receive access to important financial documents and reports from wherever they are.<\/p>\n\n\n\n

If your CFO is creating shareholder reports, they can do so from your cloud accounting software. If your accountant is gathering financial reports to submit your quarterly taxes<\/a>, they can use your cloud accounting software. <\/p>\n\n\n\n

What\u2019s more, is that you can give employees access to your software, depending on their level of security clearance. For example, you can give HR officers access to your certified payroll software<\/a> and restrict them from accessing your bank information. <\/p>\n\n\n\n

Lower your margin of error<\/h3>\n\n\n\n

Cloud-based accounting software centralizes all your company\u2019s financial data in one place. Think of it as a single source of truth. It gives your organization the benefit of entering invoices, vendor classifications, and other financial data on the same platform. <\/p>\n\n\n\n

Since this data is coming from the same place, you can lower your margin of error when creating financial reports. <\/p>\n\n\n\n

Plus, accountants are notorious for using shortcuts and formulas in Excel sheets. Excel is a great tool and all, but it opens the door to errors and inaccurate reports. Implementing cloud accounting helps get rid of this obstacle. <\/p>\n\n\n\n

Use your cloud accounting software right away<\/h3>\n\n\n\n

Cloud accounting software doesn\u2019t require any download or installation. Since you host your data over a remote server, you can use your software right away once you purchase the subscription. <\/p>\n\n\n\n

Traditional accounting software requires the opposite. First, you need to download it. Second, you need to constantly check for updates. Also, if your company experiences any issues, your IT team will need to step in and offer support. <\/p>\n\n\n\n

Cloud accounting software is available wherever you have an internet connection. And it\u2019s more secure than traditional accounting solutions. <\/p>\n\n\n\n

TL;DR<\/strong> It\u2019s easier to maintain. And you can sleep well at night knowing your data is safe from bad actors. <\/p>\n\n\n\n

Receive available tech support right away<\/h3>\n\n\n\n

Although cloud accounting is more advanced than traditional software, there’s still a chance you’ll run into problems managing your data and accounts. Fortunately, most cloud accounting solutions have dedicated technical support teams on standby. <\/p>\n\n\n\n

You can reach them via telephone, email, or live chat whenever you have a problem with your account. And you don\u2019t need to hire an in-house IT team (which significantly reduces your overhead costs).<\/p>\n\n\n\n

Declutter the paper from your office<\/h3>\n\n\n\n

Handling your finances with a traditional general ledger can cause a significant buildup of paper (and books) in your office. <\/p>\n\n\n\n

Not only does reducing extra paper help the environment, but it\u2019s also beneficial for the following reasons:<\/p>\n\n\n\n