Cloud-Based Accounting Software: Top 12 Features

If you’re in a hurry, you can start by learning more about the world’s #1 cloud accounting software here.

This doesn’t have to happen to your business, though. Below, you’ll find an in-depth exploration of what to look for in cloud accounting software so you can make an informed decision that sets your business up for success.

What is Cloud-Based Accounting Software?

As always, we’ll start with the basics: what is cloud-based accounting software?

Cloud-b1504sed accounting software is an online accounting solution businesses can use to manage their financial operations over the Internet. Unlike traditional accounting software (installed locally on a company’s hardware), cloud-based systems provide access to financial data anywhere with an internet connection. 

This fundamental shift offers undoubtable advantages in terms of accessibility, scalability, and collaboration.

Key Differences Between Traditional and Cloud-Based Accounting Software

It’s also helpful to consider some primary differences between cloud-based and traditional accounting software:

• Functionality: Traditional software requires manual updates and installations. Unlike cloud accounting software, which constantly updates with new features and improvements.
• Accessibility: Cloud solutions offer flexibility for remote workers and collaboration as they can be accessed through any device connected to the Internet.
• Security: Cloud providers usually keep your data safe because they commonly have advanced security features like data encryption and frequent data backups.

Top 12 Features of Cloud-Based Accounting Software

Now it’s time to get into the nitty-gritty of what to look for in cloud accounting software. Keep in mind that these features aren’t listed in any particular order. Evaluate and prioritize them based on your business’s needs and goals.

Accessibility and Mobility

Cloud technology facilitates web-based accounting. Users can access their financial data from anywhere with an online connection at all times. This means business owners, accountants, and financial managers can work remotely, check their accounts on the go, and collaborate with colleagues in different locations.

Examples:

• From hotel rooms, traveling business people can monitor their financial reports.
• A company’s bookkeeping department may update records remotely.

Real-Time Financial Reporting

Real-time financial reporting implies that all transaction data, including up-to-date balance sheets and income statements, gets updated immediately across the platform for timely decision-making and accurate forecasting.

Examples:

• Monthly financial reports are automatically generated using the most recent information.
• The cash flow statement shows recent transactions from a real-time perspective.

Enhanced Security Measures

Cloud-based accounting software has robust security measures to protect sensitive financial information, including data encryption, regular backups, and role-based access controls. These measures guarantee unauthorized users cannot access particular information.

Examples:

• Data is encrypted both during transmission and storage, thus preventing unauthorized access.
• Once a day, automatic backup ensures system crashes do not cause data loss.

Scalability and Flexibility

Your cloud solution grows with your business, allowing new users, features, or modules to be added without much change to infrastructure. This makes it flexible enough to accommodate your changing needs, which is a must-have feature at a time when businesses and entire industries are changing more frequently than ever.

Examples:

• A small business could start with basic functionalities and then scale up later.
• Software usage by seasonal businesses may scale based on variable requirements.

Cloud-Based Accounting Software Integration with Other Business Tools

Cloud accounting software can also seamlessly integrate into other popular business tools, including CRM systems, payroll services, and inventory management systems. This facilitates smooth data exchange between platforms and reduces manual inputs and errors they might have caused.

Examples:

• Financial reports on sales are adjusted based on the CRM system used.
• Payroll details are synchronized with finance records; hence, accuracy is achieved.

Cost-Effectiveness

Cloud-based solutions tend to be cheaper than traditional software since they eliminate the necessity of extensive initial investments in hardware, which lowers ongoing maintenance costs. 

Subscription pricing allows businesses to pay for only what they use, providing a flexible and scalable solution that grows with their company. When considering ROI, cloud accounting software is certainly worth the investment.

In addition to saving on their IT costs, companies will also gain from increased efficiency, better security, and real-time access to financial data, which leads to more informed financial thinking and overall business performance.

Examples:

• There are no additional costs for installation and maintenance of servers or hardware.
• Lower subscription fees compared to traditional accounting software. 

Automatic Updates

Cloud-based software providers handle updates, upgrades, and maintenance. This way, users always have the latest features and security patches without the hassle of manually installing updates. As a result, you can expect reduced downtime and peace of mind knowing your software is current.

Examples:

• New features are regularly pushed to users during their workday.
• Security patches are applied promptly for protection against new threats.
• Instead of buying expensive software once, a monthly or yearly payment is made.
• In-house IT staff requirements to manage and maintain it decrease.

Collaboration and Multi-User Support

Another advantage of accounting in the cloud is that it supports multi-user environments, where several individuals can work on a similar set of data simultaneously. Role-based permissions ensure each user only accesses what they require.

Examples:

• An accountant will prepare tax postings while a finance manager simultaneously reviews expense reports on a different screen.
• Concurrent input from various departments into financial data improves efficiency.

Enhanced Data Accuracy with Cloud-Based Accounting Software

Its impressive consistency reduces errors related to manual entries—automation creates more accurate records. This uniformity helps maintain the integrity of financial information. With more confidence in data accuracy, decision-making becomes less of a guessing game.

Examples:

• Automated bank feeds import transactions directly from the bank, thereby reducing manual entry errors.
• Consistent data processing ensures accurate and reliable financial records are maintained.

Compliance and Regulatory Support

Cloud-based accounting software updates itself automatically according to the latest financial regulations and standards. Detailed audit trails track all transactions and entries, simplifying the auditing process.

Examples:

• Automatic adjustments to match current tax laws.
• Comprehensive logs of all financial activities for more accessible audits.

Support and Training

Dedicated support teams and in-depth training materials help users fully take advantage of the software. This helps ensure implementation is done correctly and used continually.

Examples:

• Proactive customer support for troubleshooting and guidance speeds up adoption rates.
• Training materials and resources are available to them so people can learn how to operate the software efficiently.

Environmental Impact

Cloud-based accounting solutions help lower carbon footprints and promote sustainable practices by replacing physical paperwork requirements and on-premise servers.

Examples:

• Digitized records reduce paper consumption.
• Cloud infrastructure reduces the need for energy-consuming onsite servers.

Common Questions About Cloud-Based Accounting Software

We’re not done yet! Here are some common questions about cloud-based accounting software that you may also have:

How safe is cloud accounting?

Your financial information is shielded by strong security measures implemented by cloud accounting providers, including data encryption and regular backups. As long as you are careful to vet and select a reliable provider, it is considered a very safe and secure way of keeping sensitive data.

Is cloud accounting more expensive?

Cloud accounting is generally more cost effective than traditional software. It offers flexible subscription models and reduces the need for significant upfront investments in hardware. It’s also more affordable to maintain and update as the provider handles these tasks.

Is cloud-based accounting software easy to use?

Most cloud accounting software is designed for user-friendliness and efficiency. It often includes intuitive interfaces and offers comprehensive training materials and support options to help users quickly learn to operate it effectively.

When you choose Xledger, for example, you can reap the rewards of our world-class customer support. 

This support includes:

• Support videos and help files within Xledger
• Quarterly upgrades with supported documentation
• First-class support response and resolution times
• Live webinar sessions after every release
• Regular consultant-led webinars
• Hypercare priority support for new customers
• Zendesk support portal

What are the benefits of cloud-based accounting software?

Among the many benefits are: 

• Improved accessibility
• Real-time financial reporting
• Enhanced security
• Scalability
• Integration with other business tools
• Cost-effectiveness
• Automatic updates
• Collaboration support
• Data accuracy
• Compliance support
• Environmental impact

Xledger Cloud-Based Accounting Software

Cloud-based accounting software can benefit virtually any business of any size. By better understanding and leveraging these features, you can enhance your financial operations, improve collaboration, and keep up in competitive environments and industries.

Ready to take the next step? Book a demo to see Xledger in action and explore how our cloud accounting solutions can empower your business.

Did you learn a lot about cloud-based accounting software in this article?

Here are three more to read next: 

• The State of Accounting
• The Xledger Accounting Glossary
• Streamline Invoicing with the Best Finance Automation Software