Cloud Accounting vs Traditional Accounting: What's the Difference?
In today’s fast-paced and highly competitive Singapore society, automation is increasingly being adopted by many businesses who want to embrace digital transformation. With new tools and platforms to become more efficient and productive, conventional methods of managing your business can cause you to fall behind – and this includes your accounting methods.
If you are considering using or switching to cloud accounting software, read on to find out more.
Problems of Existing Traditional Accounting Methods
1. Manual processing which can take up time
If you are handling your own accounting, you may have already realised that manual account entry requires copious data processing time. Coupled with already time-consuming accounting tasks, there are also tedious maintenance and backup procedures for your dedicated hard drive in order to ensure that your server functions properly to house your financial data.
However, as it may come with additional maintenance costs, you may overlook the need for software upgrades at times. As a result, this may weaken the efficiency of your accounting process. In the event of lost and deleted financial records, it may be difficult to restore them when your financial record storage is not thoroughly backed up.
2. Data access bound to office usage
With a desktop-based system, you are also unable to access accounts and important financial figures once you are out of the office. This can pose much inconvenience when you want to check on your financial records.
3. Limited responsiveness from traditional accounting firms
On the other hand, if you just started outsourcing your accounting to a traditional accounting firm, keep in mind that their responsiveness may not be as consistent when it comes to more complex accounting tasks. Accounting firms that have yet to leverage technology into their practices usually manage a large volume of paperwork and this comes at a cost – low visibility of progress to clients.
What is Cloud Accounting?
To overcome these challenges, this is why many businesses in Singapore make the shift to cloud accounting or outsource their accounting to a cloud accounting services provider. A modern, automated approach that allows an instant overview of your financial information, cloud accounting takes traditional bookkeeping online. To help you understand cloud accounting as a platform, we’ve summed up the top four benefits:
1. Automatic processing that saves you time
With financial information that’s updated in real-time, cloud accounting software like Xero eliminates the need for manually intensive accounting and bookkeeping processes. It is a seamless process that also frees your business of maintenance and backup procedures, which otherwise delays the progress of other important aspects of your business. With more time on your hands, you can better focus on increasing your company’s growth and productivity.
2. Increased accessibility
One of the top advantages of cloud accounting is, it allows remote access to your financial data anywhere at any time. You won’t have to wait for someone to email on-demand information whenever you are out of the office as you can now access the same files yourself. Additionally, as the system is digitalised, multiple users are able to readily access accounting records at a time.
3. Go paperless
Doing away with the paperwork, cloud accounting offers a more eco-friendly yet cost-effective approach for companies who are tapping on technology to streamline business operations. As your financial data is stored remotely in secure servers and backed up automatically, the information will always be safe and up-to-date at any point in time.
4. Managed by a team of Chartered Accountants
When working with a specialised team of Chartered Accountants, you can trust that any miscalculations, error of omission (i.e. transaction has occurred but no accounting entry is recorded) and errors of principle (i.e. incorrect accounting treatment for a business transaction) will be identified to ensure complete accuracy and completeness in your financial data – so rest assured you’re viewing reliable financial reports at the end of every month.
Be Constantly Connected with Chartworth
If you are planning to incorporate cloud accounting into your business in Singapore, it may seem daunting having to learn and implement it from scratch. To help you make a quick transition to cloud accounting, why not outsource accounting services instead?
Here at Chartsworth, we oversee these modern accounting solutions and do your accounting online on a real-time basis while ensuring that your financial information is accurate for peace of mind. With our in-depth knowledge and expertise, we get you set up on the cloud and tailor your Xero account to suit your unique business needs. No more delays in getting your financial information and missing deadlines! To increase the financial efficiency of your business, it is crucial to choose the right accounting service provider to better support your needs. Take the first step of change with Chartsworth and explore our services today.