When it comes to freelance accounting, it’s all about working smarter, not harder. Using cloud accounting software is one way you can achieve this. Learn what cloud accounting is and some of the benefits it provides.
What is Cloud Accounting?
Cloud accounting software is similar to traditional accounting software. The key difference is that cloud accounting software runs on remote servers instead of your computer’s hard drive. Your data is transmitted to these servers – or the cloud – and then it’s processed and returned back to you. This means you can access your financial data anytime, anywhere with any internet-enabled device such as a computer, tablet, or phone.
What are the Benefits?
- Multi-User Access: You can access your data anytime from anywhere with the cloud. But what’s even more valuable about cloud accounting is that multiple users – your team, advisors, or clients – can access the data, too. They can check account balances, invoices, overall cash flow and more without the need for physical meetings or transferring data via email to one another.
- Real-Time Data: Unlike traditional accounting software, which requires tedious manual data entry, cloud accounting software automatically updates information, giving you a financial report in real time. This not only makes things more convenient, but it also provides an accurate look into your account balances since there is no risk of errors caused by manual data entry. Automatic updates also mean you can spend less time entering data and more time focusing on other tasks.
- First-Rate Security: You might be concerned with the security and privacy of cloud accounting software. But in fact, the cloud is a much more secure way to store financial information than traditional accounting software. Cloud accounting software services have high-security standards. Backups are routinely performed, the servers are regularly scanned, and your transferred data is encrypted. If your laptop gets stolen or place of work gets destroyed in a natural disaster, all your data is still secure, just so long as nobody knows your login information to your online account. If you were to do it the old-fashioned way by saving data on your hard drive or a USB drive, there’s the risk of the hard drive crashing or the USB drive getting lost.
- Lower Upfront Costs: Using cloud accounting software is generally more economical than traditional accounting software. You only pay for the services your clients need via a subscription, and you don’t have to worry about outdated software since version upgrades usually are free. There’s no need to buy expensive equipment such as servers and pay for their maintenance because the cloud provider manages that. There’s also no need to pay for new licenses or system administration costs.
- Accommodates Business Growth: Most cloud accounting software grows as your clients’ businesses grow. For example, if one of your clients makes around 100 transactions per month and then a sudden growth spurt causes that number to rise to 5,000 transactions per month, your cloud accounting software can easily handle this business growth.
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