Cloud accounting software has gained traction in recent years with many practices moving from traditional desktop solutions to cloud accounting solutions. Many have called cloud the future of accounting software, and there's no doubt that using cloud software can save you a ton of time. Let's dive into why.

If you're not very into tech, you can be forgiven for thinking that clouds are weather-related phenomena, floating up in the sky and darkening before a big storm. However, in recent years, the cloud has spread increasingly into everyday life, from common applications such as Apple's iCloud to other internet-based storage tools such as Google Drive, OneDrive, or DropBox.

In a nutshell, Cloud computing refers to the delivery of certain platform services, such as storage, data backup, servers, networking, software, and analytics through the web, i.e. the cloud platform. This can be useful to you whether you are a small business or a big one as it means that no one has to physically come in to operate certain software on your computer.

In terms of accounting software, a number of the big names out there offer cloud services. Think of Xero, QuickBooks Online, and Sage Business Cloud Accounting, for instance.

Cloud accounting software has a number of benefits for both practices and their clients. Let's break down a few of these.

1. Bank Feeds – arguably cloud accounting’s greatest strength. Clients can link their bank account directly into the software and automatically import transactions daily – no need for manual data entry or bank reconciliations.

2. Instant, anywhere access – no need to be onsite at the client or host a server in your office. You and your team can access your clients’ data from anywhere and in real-time.

3. Integrations – as the accounting software is in the cloud (on the internet), one can connect it to other online software – marketing, point of sale, reporting, e-commerce etc. This automates many manual, data-entry processes for you and your clients.

4. Ease of use – graphical user interfaces enable your clients to easily process customer and supplier transactions. Clients can even do most of the bookkeeping work themselves. As the software is on the internet, there is no need for downloads, installations or any PC related issues.

5. Data security – your data is hosted by the cloud accounting provider and not on your or your client’s servers – there is no risk of data loss or theft.

Cloud accounting is not all peaches and cream... As it is hosted on the internet, a fast, reliable internet connection is a must. If your setup is in the middle of nowhere where internet is hard to come by, this may not be for you.

We recommend a fail over from your fixed line connection to a mobile or 3G back-up. Your mobile phone can be used as a hotspot which reduces the need for additional expenditure.

Another drawback that comes with cloud accounting software is entity size. Large businesses with more than 5,000 inventory items or more than 5,000 transactions per month will experience speed issues on cloud accounting software. As such, we'd recommend a more enterprise grade solution at this level.

Overall, there's a lot of space left in which cloud accounting software can grow. Cloud accounting is still in its salad days - i.e. young - and there's scope for it to become more powerful and effective with greater capabilities. Cloud has forced many organizations to reimagine traditional ways of operating, saving them time and money in many cases.

The pandemic also accelerated the growth of cloud software and led to some great new developments. We are excited to be part of the cloud revolution.