West Plus is an accounting organization situated in Broome, Western Australia, and this organization has a large client base that is spread over Western Australia i.e. from Kununurra to Warburton to Carnarvon. Partnership team of West Plus has researched and found Cloud Accounting System beneficial and are now moving towards this system and making also making their clients switch to a new system of Cloud-based Accounting. In the present time, customers of the organization are using the traditional method of accounting system in which accounting software’s are installed in their own systems. In this traditional system, reviewing of various files of accounts for filing tax returns clients’ need to back up their data and forward files to respective firms using means of email.
Cloud accounting is a software that is a bit similar to a previously used traditional accounting system that offered on premises accounting software which required self-installation of software similar to Software as a Service business model. In this new technology, data is sent and processed in cloud and accounting operations are performed off-site without disturbing the client’s system. This services can be accessed by the client through means of the internet or via application services provided by the cloud. Cloud accounting software is easy to access as they do not require any installation process and maintenance and it allows all the employees of an organization to have access to data stored at the platform of the cloud.
Benefits of Cloud Accounting
Various type of small scale businesses are benefited most by usage of cloud accounting and there are varied reasons for organizations to switch to the online facility of accounting provided by the cloud:
- Flexible: With the use of cloud-based accounting solution clients can have access to services by having access to internet connection. It provides freedom to have access to work-related files by using software like QuickBooks mobile accounting that can be accessed using mobile phones and tablets and also provide an option for modification.
- Economic: As QuickBooks software process on a subscription basis and users need to pay monthly fees and have access to it and if client plans for long term subscription they need to pay more which can be considered profitable for the cloud
- Efficiency: Firms using this service earns more for less work and can charge their client’s with more services charges on basis of service by them. Fixed pricing helps in having long term clients as they depend on these services as they charge for services used them. In this platform user of the firm and their client, both can have access to the same file at a time and it also prevents duplication of files.
- Anytime and Anywhere Access: Organization using this service need not stick to a particular system rather they can access it remotely by any means but with a working internet connection.
- Easy and Secure Sharing: This platform does not require sending of individual files through email rather it provides privilege of easy and secure sharing of data.
- No Capital Expenditure: Cloud accounting software requires a monthly subscription and hence no capital expenditure is required and it helps by providing an option to change existing software if the client is not happy with its services.
- Saves Time with Automation: This software does not require timely manual posting and chasing to keep the system updated rather it automatically updates and generates statements and reminders on a regular By merging this system with HR and other applications like Payroll it can automatically generate HR documents and salary slips.
- Keeps Information Secure: As the cloud is a platform that assures security to data saved in it by providing timely updates of information present in its servers and data here remains safe even if the system These systems are always up to date as they are agile in nature and updated automatically with no extra charges.
- Real-Time Information Updation: Unlike traditional methods where updating of accounting information is done manually, it provides a platform in which new information is added into the system and all records using that data are updated automatically without any kind of manual addition.
Challenges Faced by Cloud Accounting
- Identification of Leader: Challenge faced in this type of service is that it becomes difficult for an organization to assign a leader for a project. So assigning a leader with influencing attitude and having appropriate knowledge about the technology becomes a difficult task for the organization.
- Shifting Mindsets: It becomes difficult for the organization to shift from assurance to advisor and hence this act has an impact on the mindset of the organization. Thus, it has been found that service like advisory provides more opportunities than the traditional method of services.
- Service Level Agreements: It is found that larger is the business organization more factors like services will be required by suppliers and customers. This kind of difference delay the services provided by various IT firms that are commonly known as service providers of the cloud.
- Managing Changes: Managing changes has always been hard as it needs to make changes in processes, software, and Cloud Accounting hence involves the transformation of various services as it requires a variety of changes that are upcoming with a change in technology and management of these changes.