Accounting is a crucial part of every business. Accounting is important not only because it helps keep track of the business’s operations but also because it gives you a complete insight into how the business is doing in general. Things such as return on investment and net worth can only be figured out when the business’s finances are in order.
The latest trend in business accounting is moving the whole process to the cloud. Cloud computing and cloud-based accounting solutions have made accounting more accessible to small and medium businesses. Before you go ahead and start browsing through the available cloud accounting solutions, however, you need to know the important aspects to consider.
Before you go ahead and browse through features, accounting standards, and other details, take the time to go over the security features offered by the accounting solutions you are comparing. As mentioned before, a lot of detailed information about your business will be stored in the cloud; ensuring maximum security measures are in place means protecting your business’s well-being.
A 256-bit encryption and proper SSL security are among the basic security measures that must be in place for the accounting suite to be secure. Being able to set your own encryption key is a huge plus since this would mean only you can access the information; not even the cloud server administrators can open your books without the correct encryption key.
Methods of Accounting
According to articles published by Maryville University and its online bachelors degree in accounting program, there are two popular methods of accounting you can choose from. Accrual accounting is the more popular of the two since it suits most businesses better. Cash accounting, on the other hand, is simpler and easier to manage if you have a cash-based business or a low revenue business.
The cloud-based accounting solutions either use one of these two methods or offer both at the same time. Solutions that offer both methods usually let you choose between accrual and cash accounting when you first set up your account. Some also allow you to switch between the two methods, but it is best to select a method at the beginning and stick with it.
Accounting is a very standardized practice, but that doesn’t mean all cloud-based accounting solutions are created equal. If you use the services of a freelance accountant, for example, you want a cloud solution that supports multiple users. You can create an access credential for the accountant and maintain complete control yourself.
Other features such as reporting, automated transaction recording, receipt scanners, and support for account reconciliation are also handy to have. These features are usually geared towards making the whole process of day-to-day accounting easier. Once you go over the security features and accounting method of the solutions, you can focus on finding one system that meets your business’s (and personal) requirements best.