Did you know that 50% of MSMEs in India are considering cloud adoption for expansion in FY2024? That’s right! According to a recent SME Digital Insights study, while 50% are prioritizing cloud adoption, 20% have already transitioned over half their workloads to the cloud.
Cloud accounting – A finance revolution
One of the key business areas impacted by the introduction of cloud services is accounting. Cloud accounting is a game-changing solution that puts all your financial data at your fingertips, anytime, anywhere. No more sticking to a physical place or a device to make those critical decisions.
With its affordable pricing and high-level security, cloud accounting software are now within reach for businesses of all sizes. In this guide, we will walk you through all you need to know about cloud accounting to prepare you for migration to cloud accounting.
What is cloud-based accounting?
Cloud-based accounting is the technology where all your accounts and records are saved on a remote server. You are no longer restricted by physical records or specific devices to access your books of accounts. This system helps you access your files from any location and work seamlessly.
Multiple users can log on to this remote server and work on these files simultaneously, improving your productivity considerably. Gone are the days when you had to save files on your computer and could access those files only from the same computer!
In your absence, it would be difficult for others to access those files, and your team would have to wait for you to report to work to start the next process. However, in the case of cloud accounting, all these problems are solved. All the files can be accessed by all stakeholders from a remote server at any point in time.
Why are businesses adopting cloud-based accounting?
Today, cloud-based accounting has become highly popular among all types of businesses, especially MSMEs. The speed and accuracy of data processing have definitely improved several notches higher than earlier, as cloud accounting offers the following benefits to MSMEs:
- Easy access to information
If you own a small business, you will benefit hugely when shifting to cloud accounting. You can safely access your financial data, tools and other confidential information from a remote server, irrespective of your location.
You don’t have to be physically present in the office to get access to this data. You can also coordinate with different teams real-time, and reconcile invoices or accounts without any unnecessary delays.
- Easy on the pocket
Usually, small businesses think twice before investing in any new technology. This is where cloud accounting pleasantly surprises them. With its cost-effective subscription model, a cloud accounting solution offers exciting features, automation and unlimited support for even first-time users to use this system effectively.
Conventional accounting software tools cost a lot, and you have to pay a considerable amount for software/hardware updates, licenses and support systems. You also need to pay extra in case of upgrading of the software versions. All of these costs can be avoided when you use a cloud accounting solution.
- Seamless coordination
For your business to succeed, you need to build excellent partnerships with your external stakeholders and your internal team members. Time is the key to your business, and a cloud accounting solution understands this perfectly.
It helps you collaborate seamlessly with all the concerned parties, by helping multiple users access and work on files simultaneously. This way, you don’t have to wait for someone else to complete their work to start yours, thereby eliminating red tape in your delivery.
- No manual intervention
One of the major benefits that you can enjoy when you switch to a cloud accounting solution is automation. Accounting, invoicing, inventory management and more – you name it, and the system creates automated templates for these operations.
All these automations ensure that manual intervention is kept as minimal as possible. Hence, the chances of human error are almost next to nil, thereby improving the overall quality of your goods/services.
- Flexibility
With traditional software, you may need to pay more to buy an updated software version when you grow or expand your business in the future. However, a cloud accounting solution is quite flexible, as it comes with impressive scalable features. These features help you seamlessly use the software, regardless of your expansion and growth plans.
- Data security
You can be assured of the safety of your financial data when you use a cloud accounting solution. Cloud accounting provides services like data encryption, frequent backups, authentication checks and more to ensure that your data is not compromised by anybody at any time.
- Real-time understanding of financial health
As an MSME owner, you would like to take stock of your financial health regularly to know where you stand, and make critical business decisions accordingly. Getting important business reports in real-time may not be possible when you use a traditional accounting solution.
With a cloud accounting solution, you can use customised tools and dashboards to get the metrics you need to understand your financials. You can check historical trends, and also make real-time forecasts based on the reports you get immediately.
As you can see, a cloud-accounting solution makes your job easier than you ever imagined. The efficiency of this solution encourages you to make the right business decisions at the right time for the overall benefit of your business.
Thanks to cloud accounting, you don’t have to do any manual or repetitive work anymore. The system will take care of most of your operations, and you will have a lot of time to understand more about your business and think of your future growth/ expansion plans.
How to choose a cloud accounting solution?
When looking to switch to a cloud accounting solution, here are some features you should focus on:
- Easy accessibility of data, regardless of time and location
- Remote server with at least double-layer security when logging in
- Software with an updated and user-friendly portal to manage the functions on the remote server
- Frequent, updated backups with updated security options like data encryption
- Selective data sharing option – this gives you the control to allow certain types of access to certain types of users
- Customised solution with easy and seamless access to updated versions
- Capability to integrate other business functions seamlessly
- Scalability features that don’t cause any performance issues when you grow or expand
How to deploy a cloud accounting solution?
The steps you need to follow to deploy a cloud accounting solution are:
- Choose the cloud accounting solution that you want.
- Visit the official portal of this software solution, and install the software, after you have made the necessary payment.
- Now, launch the installation file on your system.
- Log in to the file by giving your business-related credentials (name, address, phone number, etc.)
- Have an implementation plan ready – this will have all the details and deadlines you should follow to transition from the existing to the cloud accounting solution.
- Work on the data that is to be migrated – Analyse your existing data thoroughly to do away with unnecessary and repetitive data. Name the files properly, and consolidate all the relevant data in one place.
- Data migration – All the files (all formats) are now migrated to the new solution. At this stage, you can also add new users and stakeholders to this tool by assigning them different tasks.
- Make your team aware – It is important to give your team members enough training to work on the new cloud accounting tool, so that they are familiar with the tools available.
- Testing – Now, run the cloud accounting solution to test if it meets your business obligations. Make necessary changes/ updates as prompted by the software for a hassle-free execution.
Common challenges of adopting cloud accounting and how to overcome them
Here are the challenges you may face while adopting cloud accounting and some tips to overcome them:
- Not having a clear migration goal – Do away with this by creating a detailed migration plan with the list of tasks to be migrated, migration timeline for each task, training objectives, risk mitigation and the like.
- Overshooting the budget – Have a clear-cut financial plan for each stage of migration. This involves costs paid to cloud accounting companies, training experts, migration specialists, system transition and more.
- Not being clear on what to migrate – Having a phase-wise migration strategy will help seamless transition to a cloud accounting solution. At each phase, analyse your data carefully to remove the non-important and repetitive ones.
- Not having the expertise in cloud accounting – Though it may involve a professional fee, it is a good idea to hire a migration expert to help you understand how to use and navigate the new features of the cloud accounting solution.
- Inability to choose the right cloud accounting service provider - With many cloud accounting companies offering exciting features and discounts, you may find it tough to choose the right company. Always look for reputed names like TallyPrime, and have a thorough understanding of the features. Choose the service provider who offers you some of the best services at an affordable cost. Don’t fall for the bells and whistles that most newbie service providers may try to lure you with.
These are only some of the basic challenges that you may face when deploying a cloud-based accounting solution. However, you can overcome all of these and more hurdles that come your way with a little bit of planning and assertion.
A cloud-based accounting solution gives you the freedom to access your financial data safely from a remote server from anywhere, anytime you want. Since it helps you collaborate more efficiently with your stakeholders, you can rest assured knowing that this system will improve your productivity extensively.
The key to getting the most from your cloud-based accounting solution is to choose the right service provider. MSMEs can consider TallyPrime powered by AWS as their cloud service provider. TallyPrime is one of the established names in the field, and businesses can be assured of getting a cost-efficient, reliable and flexible solution with upgraded features like scalability, data encryption and more.
