Accounting software is a computer software mainly designed for accounting professionals to manage accounts and perform day-to-day accounting operations. Accounting is an organized practice, work, or process of communicating and tracking financial data. A business organization uses accounting software in their everyday accounting practices for various purposes, including internal and external audits, required reports and financial analysis, to comply with legal or internal managerial requirements
Before the “cloud” became a trend, accounting records were usually stored on a desktop, and managing day-to-day bookkeeping required someone to be in the office for recording transactions, paying bills, and invoicing clients.
- Easily Record Your Business Expenses
Is your wallet packed with expense receipts? How many of those will really make it onto your tax return at year-end? Unless you record every expense as it occurs, there are high chances of losing or forgetting about them when it is time to prepare your tax return.
Cloud accounting software enables you to easily keep track of business expenses. Most cloud-based accounting tools connect to your business credit card or checking account and automatically download transactions as they occur.
- Cloud Accounting Software on Mobile enables You to Work on the Go
What is the purpose of starting your own business? If you are like most businesspersons, being your own boss is about freedom and flexibility. For you, that might mean taking a working vacation at the beach, traveling, and not being tied to a desk or an office.
It is nearly impossible to keep running your business efficiently with desktop accounting software while you are away. Unless you are in the office, you cannot invoice clients, pay bills, or access financial reports.
- Make Quick and Simple Software Updates
The traditional method of working with accounting software involved purchasing an expensive software suite and installing it on a computer. When an update or a new version came out every year, small business owners would either budget for it or continue working with an obsolete—and often unsupported—version of the software.
In case the business needed to grant multiple access to multiple people, the business would have to purchase extra licenses. Along with the expense of multiple licenses, having extra users and upgrades becomes a pain as new releases had to be installed on each machine individually.
- Make a More Seamless Experience with Add-on Features
You may be using quite a few different apps or software solutions to get your accounting done. Do any of those applications complement each other? Integrated apps (or add-ons) can help you save a lot of time (and money) because they can easily transfer data from one application to another.
Think about how you can track your business miles. The traditional method involved keeping a paper log in your compartment and making a note of the miles and business purpose each time you drove. Today, many innovative apps can track those miles for you automatically.
- Collaborate with Your Team and Clients
Cloud accounting enables you to make it easy to share information with your accountant or tax consultant. This provides greater security and collaboration while reducing the traditional back-and-forth process. For instance, you are a contractor considering investing in a new piece of equipment. You are not sure whether it is the correct step for your business. Should you rent or buy? Will the monthly payments impact the cash flow? What will the impact be on your taxes?
With old desktop accounting software, you would perhaps call your accountant to explain the situation. Your accountant would request you to provide your year-to-date financials. You would either print them out or hand-deliver or email them—hopefully, you remembered to encrypt that email for security purposes.
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