If you’ve been wondering how traditional accounting differs from cloud accounting, and which option is right for you, here’s a summary of all you need to know.
If you use traditional accounting systems, you’ll have the software installed on the hard drive of a desktop computer that can only be accessed by the person who uses that computer on-site.
Cloud accounting, on the other hand, is an off-site form of web-based software that can be accessed by anybody, anywhere, provided they have an internet connection and secure login details.
Since cloud accounting isn’t restricted to use on just the device it was installed on, this means it offers greater accessibility compared to traditional accounting systems. Anyone can view the data anywhere, giving an accurate picture in real-time, just when you need it.
It’s easier to collaborate with others when reviewing accounting information using cloud systems over traditional ones, as you can all access the data at the same time from different locations and devices. This removes the need to have to meet up in person or even print off information and share it, which has positive environmental benefits.
On the other hand, if you opt for traditional accounting, one person would need to update the files manually on the computer. The information would then need to be sent to others or printed off to share these updates, making it a more time-consuming process.
The beauty of cloud accounting is that it offers scope for business growth or an increase in users. Traditional accounting systems, however, are restricted. If you wanted to scale your systems up to accommodate any changes, this would involve having to purchase a new package and getting it installed on your computer. This, therefore, makes cloud accounting a highly cost-effective and flexible option compared to its traditional counterpart.
If you use traditional accounting systems and the computer you use it on malfunctions, gets stolen or is involved in a fire, you could end up losing all of your financial data. This isn’t something you need to worry about with cloud accounting, as your data is held on multiple servers and not just one location or device.
Cloud accounting systems are also more secure than traditional ones since software and security updates are automatic. On the other hand, you would need to carry out essential updates manually using traditional accounting packages. If you forget or don’t keep on top of the latest updates, you could put your financial data at risk.
Here at Chippendale & Clark, we focus on using cloud-based applications to make accounting a less complicated process for you. If you want to learn more, contact us today.
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