What is Cloud-Based Accounting Software and its Key Benefits for Businesses
In today’s fast-paced, globalised world, businesses must stay agile to thrive in an ever-evolving landscape. Keeping up with change is essential as international trade and cross-border transactions become the norm. One key area is accounting, and modern accounting services are now leveraging cloud-based accounting software to optimise companies’ financial operations. But what is cloud-based accounting software? Unlike traditional accounting systems that require costly hardware and ongoing maintenance, cloud-based accounting software operates under a Software-as-a-Service (SaaS) model, giving companies internet-based access to their accounting tools. This article explains how cloud-based accounting works and outlines the features and benefits of cloud-based accounting software for small and medium-sized businesses.How Does Cloud-Based Accounting Work?
Cloud-based accounting uses secure web-based software that companies can access through the Internet. Financial records are stored in the cloud, allowing business owners and finance teams to access and view accounts from any web browser or mobile app on their own devices. This ensures that everyone stays aligned. In addition, companies can also perform accounting tasks, such as invoice creation and bank reconciliation, on the go.
Features of Cloud-Based Accounting Software
To ensure compliance, startup entrepreneurs must manage their business finances effectively and adequately. Cloud-based accounting is transforming businesses, allowing them to optimise their business operations. Here are some key features of this cloud-based solution:
Accessibility
Today, entrepreneurs are constantly on the move. Cloud-based account software allows them or other users to access financial data and perform accounting tasks from anywhere, anytime, using internet-connected devices.
Real-time data
Similarly, cloud-based account software provides real-time updates and synchronisation of financial data, which means users can access the most up-to-date information, such as bank transactions, invoicing and expenses. This is to ensure accurate and timely financial reporting.
Automation
Cloud-based account software can automate various accounting processes, such as bank reconciliations, invoice generation and expense tracking. This automation eliminates manual data entry, minimises errors and improves efficiency, allowing businesses to focus on more strategic financial activities.
Integration
One of the distinct features of cloud-based account software is its capability to integrate with other business tools, such as inventory management software, CRM systems, and other payment gateways. This enables seamless data exchange, reduces manual data entry and boosts overall efficiency.
Scalability
As businesses grow, so do their needs. Cloud-based account software is designed to scale with business requirements. It can handle more transactions, users and data without requiring significant hardware upgrades. This scalability ensures it can adapt to evolving business demands.
Security
Data security is crucial in businesses as the world shifts towards digitalisation. Cloud-based accounting software prioritises data security through data encryption, regular backups and advanced access controls. Many providers also have dedicated security teams and infrastructure to ensure data privacy and regulatory compliance.
Reporting
Another key feature of cloud-based accounting software is that it offers a range of reporting and analytics tools to generate financial statements, track key performance indicators (KPIs) and assess a company’s financial health. It helps businesses make informed decisions and monitor performance effectively.
Benefits of Cloud-based Accounting for Businesses
Managing your business accounts with cloud-based account software offers many benefits. If you’re unsure how it can help, here are some key advantages of cloud-based accounting:
Flexibility: One of the benefits of cloud-based solutions is that you can access software applications remotely through a cloud application service provider as long as you have an internet connection. This allows entrepreneurs to access accounting data at any time of the day and wherever they are.
Collaboration: A cloud-based accounting software makes it easier for you to collaborate with your finance team. You can generate financial reports that your accountant might need from you.
Accuracy: Managing accounts manually can lead to errors. Cloud-based accounting software reduces this risk by centralising financial data. That way, it can help you improve the accuracy of your accounting.
Paperless: Managing business finances often involves overwhelming paperwork. Cloud-based accounting software simplifies by allowing you to import the data from your paperwork into the cloud, offering real-time access to your finances without sifting through endless paperwork. It also reduces the risk of manual errors and data loss.
Non-installation: Unlike traditional accounting software, which requires installation and licences on each computer, cloud-based accounting software can be accessed online via a web browser or mobile device. This eliminates installation costs and saves money on software upgrades.
Popular Cloud-based Accounting Software in Singapore
With so many cloud-based accounting software in Singapore, finding the right one for your business can be challenging. From basic bookkeeping to full-suite financial tools, the options are endless. To make your search easier, we’ve compiled a list of popular cloud-based accounting software – so you can choose the one that suits your needs best.
Xero
Xero is a popular cloud-based accounting software for small and medium-sized businesses. It links directly to banking accounts, automatically importing transactions for easier tracking. With over 80 built-in reports, it offers real-time financial insights to support informed decision-making.
QuickBooks Online
QuickBooks Online is a well-established cloud-based accounting software for medium-sized businesses. Like Xero, it connects to banking accounts, but it places a stronger emphasis on enhancing financial accuracy to reduce errors and save time. It also integrates with various applications, streamlining the processes with payroll and real-time financial reporting.
FreshBooks
FreshBooks is cloud-based accounting software that automates invoicing, payment processing, expense tracking, and report generation, reducing manual data entry. It also offers customisable invoice templates to help businesses maintain brand consistency.
Zoho Books
Zoho Books is a versatile, cloud-based accounting software that offers comprehensive features, including support for tax filing and multi-currency transactions. It enables businesses to handle foreign transactions using both automatic and manual exchange rates, making it ideal for those involved in international trade.
How to Choose the Best Cloud-based Accounting Software for Your Business
With the various cloud-based accounting software in Singapore, here are some key factors to consider when choosing the best cloud-based accounting software for your business:
Volume of your business activities
When choosing cloud-based accounting software, consider the volume of your business activities. Small businesses or startups may need only basic features, but accounting needs become more complex as your business grows. It’s important to choose a solution that offers scalability and customisation to support future growth.
User-friendliness of the software
It’s important to select software with an intuitive interface because if it’s easy to use, your team will likely use it well. Make sure your staff can navigate the system confidently and efficiently.
Cost
Evaluate the pricing models when choosing the best cloud-based accounting software. In addition to the cost, consider what’s included. Are training and implementation fees part of the package?
Compliance
This is a crucial factor when choosing an accounting solution. Ensure it’s fully compliant with Singapore’s tax regulations, including tax filing requirements and GST filing.
Scale Your Business with Lanturn
Cloud-based accounting software is more than a trend – it’s a strategic move for businesses aiming to thrive in the digital age. While traditional accounting software has its place, cloud-based accounting solutions offer greater flexibility, efficiency and cost-effectiveness. Choosing the right cloud-based accounting software can make a meaningful difference to your business.
At Lanturn, we offer a cloud-based platform that integrates seamlessly with your business operations. Our clients – from startups to established businesses – appreciate the simplicity and ease of managing corporate documents in one place so they can focus on what matters most: growing their businesses. Trust us to support you in your entrepreneurial journey.
Book a call with us today to explore how our cloud-based accounting solution can support your business.
