What is Cloud Accounting?
Cloud Accounting is the usage of online accounting systems with multi-user access, business automation, and safe online encryption and storage of accounting data on cloud servers. Some of the notable cloud accounting systems include but are not limited to Xero Accounting software, Dear Inventory, etc.
Globally, several businesses and organizations have embraced cloud accounting systems as a way of mitigating the major risk of loss of data when a system crashes which is common with desktop accounting systems. Regarding multi-user access on the cloud accounting system, group accounting is made easier for multi-national companies with a presence in several parts of the world where users from different areas can access the system whenever they have a secure internet connection.
Currently, up to 53% of multi-national companies in Africa have adopted cloud accounting systems to enhance the efficiency of project management, group accounting, and timely communications which was seen to greatly rise during the COVID-19 lock-down where company staff were unable to access office premises and resorted to remote working. This showed the limitation of desktop accounting systems as companies using them could not access the hardware on which these soft wares were installed.
Companies in Uganda are majorly leaning on desktop accounting systems which include but are not limited to Tally and QuickBooks. Desktop accounting systems users have been faced with major challenges which include loss of data and records upon crashing of a system, no audit trails for transactions posted in the system, limited access to the systems through only servers where the soft wares are installed, high cost of hard wares and maintenance among others.
7 Benefits Cloud Accounting Can Offer Businesses in Uganda
Companies in Uganda can leverage cloud accounting systems to achieve operational efficiency as the systems have distinctive benefits that include the following;
- Improved data security as there’s provision to encrypt and store data on cloud servers hence resolving the issue of the constant need for backups and the cost of data storage.
- Access to audit trails that avail detailed information of posted transactions in the systems by users that are edited, or deleted. This guarantees accountability of users, ownership, and authenticity of information posted.
- Access to Real-Time data processing and analysis as long as a user has access to a secure internet connection, alternatively the systems can be accessed through mobile phone applications which is an added advantage for SMEs. Notably, reports can be generated on a need-be basis and for cases of transactions in foreign currencies, the systems have up-to-date exchange rates hence the authenticity of financial statements.
- Access to the bank accounts where for some cloud accounting systems which give users access to the company’s bank information on a need basis such as bank statements to do bank reconciliations efficiently.
- Notable reduction in the need for IT infrastructure and maintenance costs of both software and hardware within the business premises as several users can access the system with different user names and passwords, no need to download soft wares and elimination of access barriers that require remote servers located at client premises for the case desktop accounting systems.
- Access to integration among several cloud accounting systems for users to access features of the different systems such as comprehensive reporting systems, inventory management, and manufacturing systems.
- Access to flexible and remote working as the finance team and other users can access the systems wherever they are as long as they have access to a secure internet source and valid login details.
Notably, the shift from desktop accounting systems to cloud accounting systems has met resistance however, this is being resolved with assistance from Certified cloud account system advisors in different countries through partnerships with the software developers. The advisors have taken the initiative to take a deep dive into the systems to see that the client’s needs and compliances as per the different countries are met, implementation, integration, and training of users is comprehensively done as well as provision of 24/7 annual support to ensure the clients are fully maximizing the benefits of the cloud accounting systems.
What are the Most Effective Ways to Use Cloud Computing to Achieve Business Goals?
- Remote Operations and Accessibility. With cloud computing, employees can access the required information and work from any part of the world to achieve goals and meet set deadlines without necessarily reporting to the office. Several cloud service providers have gone the extra mile to avail mobile apps which can be used to access work information and data through phones hence eliminating the dependence on a single device.
- Safe and Easy Data Security and Recovery. Cloud service providers provide safe storage of data in the cloud which eliminates the threat of data loss in case of emergencies such as the crashing of desktop accounting systems. SMEs are faced with high costs of disaster recovery systems which have been resolved by cloud computing by providing cloud-based storage solutions. In cases of loss of devices, there’s no time spent on and cost of data retrieval as the data is stored on the cloud.
- Reduced Costs of Operation and Maintenance. Cloud computing helps companies to cut costs in terms of purchasing expensive hardware. Businesses can use subscription mode which is more reliable in terms of budgeting and reduction of operational and infrastructural costs. The setup or support of cloud infrastructure does not require the presence of providers at the business premises as they can work remotely from where they are based hence minimizing operational costs.
- Timely and Free Upgrades. Businesses do not face the cost of the firmware and software updates and maintenance as the servers are off business premises and the cloud service providers are in charge of all the latest software updates and their maintenance thus no downtime resulting from software installation, backups, and other administrative tasks.
- Business Automation. Cloud computing avails businesses with the opportunity for automation of business tasks for example, accounting tasks, banking tasks, scheduling tasks, management tasks, payroll management, and leave management tax calculations for different countries among others, and guarantees the accuracy of data and financial reports by flagging any discrepancies.