Cloud Accounting Explained: How It Works and Why You Need It

As technology continues to advance, businesses are constantly looking for ways to streamline their financial processes and increase efficiency. One solution that has gained popularity in recent years is cloud accounting. 

This innovative approach to managing financial data offers numerous benefits for employers, including increased accessibility, security, and cost savings. In this article, we will explore the concept of cloud accounting and how it works. 

We will also discuss some of the top cloud accounting software options available and how outsourced cloud accounting can help you find skilled talent from popular outsourcing regions like Latin America (LatAm). 

What Is Cloud Accounting?

Cloud accounting, also known as online accounting or web-based accounting, is a method of managing financial data through internet-connected software. 

This means that instead of traditional accounting software being installed and used locally on your computer, all financial information is stored and processed on remote servers accessible online. 

The main difference between cloud accounting and traditional methods is the use of the cloud to store and process data. 

With traditional methods, businesses would have to purchase and install expensive software on their computers, requiring regular updates and backups. This can be time-consuming and costly. 

With cloud accounting, you can access your financial data anytime and anywhere as long as you have an internet connection. This makes it easier for multiple users to collaborate and work on the same set of financial data in real time.

8 Benefits of Cloud Accounting Software

Replacing traditional accounting methods with cloud-based software offers several benefits for employers, including:

1. Access to up-to-date financial information

With cloud accounting, you can access real-time financial data from any device with an internet connection. This allows you to make informed decisions based on the most recent data.

2. Time-saving automation

Cloud accounting and bookkeeping software comes with automation features that can save you time and effort. For instance, some software automatically reconciles bank accounts and categorizes expenses, reducing the need for manual data entry.

3. Improved collaboration and accessibility

With cloud-based software, multiple users can access and work on the same financial data simultaneously. This makes collaboration between teams much more efficient and eliminates the need for data transfer or physical paperwork.

4. Scalability and flexibility

Cloud accounting software allows you to scale your usage and storage needs up or down, making it a cost-effective solution. It also offers flexibility in terms of the number of users and the type of features provided.

5. Cost savings

As mentioned earlier, traditional accounting methods require you to purchase and install software on your computers. With cloud-based software, you only pay for the features you need and can avoid costly updates and backups.

6. Security and data protection

Cloud-based accounting systems come with advanced security features, such as data encryption technology and regular backups, to ensure the safety of financial data. This can provide peace of mind for employers concerned about data breaches or loss.

7. Integration with other business tools

Most cloud accounting software offers integration with other business tools, such as CRM systems and project management software. This makes it easier to manage all aspects of your business in one place.

8. Green solution

Using online accounting software can also be considered a more environmentally friendly option, having been shown to reduce energy consumption and carbon emissions.

By eliminating the need for paper-based accounting processes and physical storage, you can reduce your carbon footprint and contribute to a greener future.

Is Cloud-Based Accounting Safe and Secure?

Data loss, data privacy, and accidental exposure of credentials are the biggest cloud security concerns. However, cloud-based accounting software is often more secure than traditional methods. 

This is because reputable cloud accounting software providers invest heavily in security measures such as encryption, firewalls, and regular backups to protect sensitive financial information. 

Furthermore, storing all financial data on secure servers remotely means that even if one computer is lost or stolen, the data remains safe and accessible from another device. This can provide peace of mind for employers, especially in the event of a natural disaster or cyberattack.

However, it is still important to be aware of cloud-specific security threats, such as unauthorized access, phishing attacks, and malware or ransomware. To prevent data breaches, you must choose a reliable and secure cloud software solution and implement robust security protocols and secure access controls.

The Top 10 Cloud Accounting Software Solutions for Small Businesses in 2024

Fully leveraging the benefits of cloud accounting requires you to choose the right software for your business. Here are 10 of the top cloud accounting software solutions to consider in 2024:

1. NetSuite ERP

NetSuite ERP is a comprehensive, cloud-based business management platform that enables organizations to streamline core operations and gain instant insights into their financial health and operational performance.

2. QuickBooks Online

QuickBooks Online is a service from Intuit that helps businesses of all sizes with their accounting needs through a mobile app, free expert assistance, and app integration, with multiple pricing plans to fit your budget and business requirements.

3. Zoho Books

Zoho Books is a cloud accounting platform with advanced features like foreign transaction management, automation, customization, collaboration, and multi-device accessibility, boasting high ratings on most customer review services.

4. Bonsai

Bonsai is a business management software platform that helps users with client, project, and financial management. It integrates with popular software, automations, and reports featuring KPIs.

5. Sage Intacct

Sage Intacct is a cloud accounting, payroll, and HR service that helps users empower their organization with an affordable cloud solution featuring AI-powered continuous accounting and ERP to drive growth.

6. Xero

The Xero cloud accounting software features comprehensive paperless recordkeeping, automated features, and smart data with valuable insights to help your business save time and money with flexible account plans.

7. FreshBooks

FreshBooks is an invoice and accounting software system with services tailored to small businesses, including payments, business expense tracking, time tracking, projects, financial reporting, and payroll, as well as invoicing and accounting services.

8. Wave

Wave helps you generate invoices, receive payments online, and simplify your accounting with its range of financial management solutions for small business owners. The company boasts 4.7 out of 5 stars on Google.

9. Kashoo

Kashoo creates finance and accounting solutions specifically designed for small business owners, helping them send their initial invoice, complete their first tax return, or transition to traditional accounting software with a customizable chart of accounts.

10. ZipBooks

ZipBooks provides the tools and insights its users need to bring their businesses to the next level, such as invoicing and billing, accounting, and intelligence, earning it 4.8 out of 5 stars on the Chrome Web Store.

How To Find Talent Skilled in Cloud Accounting

Now that you understand what cloud accounting is and how it works, you may be wondering how to find skilled talent to manage your financial data. There are a few solid options out there that can help you find the right talent for your business.

Hire local talent

The first option is to hire local talent. This means finding accountants or bookkeepers in your area who are familiar with cloud accounting software and processes. While this can be a good option, it may limit your pool of candidates, especially if you are in a smaller town or city.

Search on freelance websites

The second option is to search for talent on freelance websites such as Upwork or Fiverr. These platforms have large pools of skilled professionals from all over the world, including LatAm. 

However, you may need extra time and resources to sift through numerous profiles to find the right candidate.

Utilize professional networks

Another option is to utilize professional networks, such as Facebook or LinkedIn, to find talent. These platforms have groups and communities specifically for accounting professionals, where you can post job opportunities and connect with potential candidates.

This can be a great way to find talent who are not actively looking for work but may be interested in new opportunities, but it may take some time and effort to reach out to individuals and find professionals open to working with your business.

Partner with a staffing or recruitment firm

Lastly, you can partner with a recruitment or staffing firm to find remote talent from a compatible country. Firms like Near have a deep understanding of the local job market and can help you find highly skilled and qualified candidates for your specific needs. 

Working with an outsourcing provider not only saves time and resources but also ensures that you are getting top talent for your business.

Final Thoughts

Cloud accounting offers numerous benefits for employers, including increased accessibility, security, and cost savings. With the right cloud accounting software and talent in place, you can revolutionize the way you manage your financial data. 

At Near, we specialize in helping businesses find skilled talent from LatAm to fill their accounting needs. Our pool of finance professionals is well versed in various cloud accounting software and can provide efficient and reliable cloud accounting outsourcing services for your business. 

So why wait? Contact us today to learn how to outsource cloud accounting services with Near and take your business finances to the next level! Book a free consultation call to get started. 

Frequently Asked Questions

Is cloud accounting the future?

Yes, cloud accounting is quickly becoming the standard for managing financial data, as is cloud computing. Gartner predicts that 85% of organizations will embrace a cloud-first principle by 2025.

Is AI going to replace accountants?

No. While AI can automate certain accounting tasks, it cannot replace the expertise and critical thinking of a skilled accountant.

What percentage of accounting professionals prefer cloud accounting?

According to a survey conducted by Sage, 67% of accounting professionals believe cloud technologies make their companies more successful, improving service offerings and client interactions. This number is expected to continue growing as more businesses adopt cloud accounting solutions.

How big is the cloud accounting software market?

According to a report published on LinkedIn by TriadTech Solution, the global cloud accounting software market was valued at $4.03 billion in 2020 and is expected to reach $6.87 billion by 2027.