What is Cloud Accounting Software?

March 30, 2017 by in category Blog tagged as , , , , , , , with 0 and 13

A brief look at how cloud accounting software works

Cloud Accounting image by Norawish Dittanet.

Software as a Service: the low maintenance and platform agnostic approach of cloud-based software means you can pay your taxes on any device with the correct login details. Clouds image by Norawish Dittanet (via Shutterstock).

Who remembers when software installation meant bulky manuals? Faffing about with CD-ROMs – or floppy disks even? For accountants this meant installing each PC with Sage Line 50, Quicken, or (now we’re going way back) Lotus 1-2-3. Each time you needed to update your software, this meant another set of disks and manuals. More clutter in the office. Thank goodness for cloud-based software. Now there’s cloud accounting software, this makes our job easier.

Instead of storing your accountancy software on a hard drive, cloud-based software is stored away from your computer. It is stored on centralised servers owned by the software publishers. Microsoft’s Office 365 and Google Docs work along similar lines. Instead of paying for a software package, you pay for a subscription, and you are given a certain amount of space for storing your files.

This is true with cloud accounting software. You can see transactions coming in and out: a bit like the online banking part of your current account. What’s more, like Google Drive and Office 365, all you need is a username and a password (and, possibly, some additional verification codes). The other beauty of cloud accounting is you can use any device: from a Windows PC to an Android smartphone.

Maintenance costs are considerably lower. With installed software, you would have needed a server in your office to store the additional data. The software publisher manages the cloud computing server and updates your desired cloud accounting package online. This is known as Software as a Service.

In accountancy services, cloud accounting packages include Salesforce’s FinancialForce, the Sage Cloud suite, and Clearbooks. The Sage Cloud covers Sage One Accounting and Sage Live packages. Cloud-based computing could be the norm for accounting, especially as the HMRC has favoured online tax returns over the traditional paper Self Assessment forms.

Peach Wilkinson Accountants, 30 March 2017.

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