As accounting professionals, we are often asked by our firms and our clients whi

Question

As accounting professionals, we are often asked by our firms and our clients which emerging technologies will impact accounting in the future. In this LIVE project, you assume the role of an accounting professional consultant who has been asked to make a presentation to a group of your firm’s clients. You have been asked to provide an informational session for clients about one emerging technology that may impact accounting in the next one to five years. Choose an emerging technology that you think will impact accounting significantly in the future. Become the expert on the emerging technology. Learn as much as you can about the selected emerging technology and then distill the information into an engaging, informative, and entertaining presentation for your clients.

Explanation / Answer

Cloud accounting software is similar to traditional, accounting software. It’s just that the accounting software is hosted on remote servers. Data is sent into “the cloud,” where it is processed and returned to the user.

All application functions are performed off-site, not on user desktop. In cloud computing, users access software applications remotely through the Internet or other network via a cloud application service provider. Using this software frees the business from having to install and maintain software on individual desktop computers. It also allows employees in other departments, remote or branch offices to access the same data and the same version of the software.

With cloud accounting, it’s also easier to get real-time reporting and visibility through out with greater mobile capabilities and collaboration. Subscription-based models are popular among cloud accounting providers, and in most cases these subscriptions are usage-based. Companies that pay a cloud accounting subscription receive updates to the software as soon as they arrive, with no additional software purchases required.

Difference between Cloud accounting and traditional accounting software

There are a several key distinctions between cloud accounting and traditional, on-site accounting.

1) Cloud accounting is more flexible. Accounting data can be accessed from anywhere on any device with an Internet connection, rather than on a few select on-premises computers.

2)The cloud accounting software updates financial information automatically and provides financial reporting in real-time. This means account balances are always accurate and less errors take place due to manual data entry.

3) The software can handle multi-currency and multi-company transactions more efficiently.

4)Each time a firm grows, greater software license and maintenance cost, new licenses and fees for database, systems management and other software expenses occur. The firm might also have to make expensive capital purchases of new hardware, such as servers.Cloud based businesses don’t get stuck with permanent, expensive equipment and licenses.

5)Cloud accounting requires far less maintenance than its traditional counterpart. The cloud provider completes the backups, updates occur automatically and nothing needs to be downloaded or installed on a company computer.

Security with cloud accounting

Cloud accounting provides secure method of storing financial information than traditional accounting software. For instance, a company computer or laptop with critical financial information could be lost or stolen, which could lead to an information breach. Cloud accounting, however, leaves no trace of financial data on company computers, and access to that data in the cloud is encrypted and password protected.

Sharing data is also less worrisome. With cloud accounting, two people simply need access rights to the same system with their unique passwords. Traditional methods often require flash drives to transport data, which could be lost or stolen.

Cloud providers usually have backup servers in two or more locations. Should one server network go down, you still have access to your data. Information kept just on-premises could be destroyed or damaged in a fire or natural disaster, and may never be recovered.

Cloud accounting maintainence

Companies that use cloud accounting require less initial server infrastructure to store data, and IT staff is not required to maintain it or update the cloud accounting system. Fewer overhead expenses and no new software purchases mean greater savings for businesses.

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