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The emerging digital technologies are making it easier for businesses to manage their operations and serve their customers more efficiently. Adoption of these technologies is important to develop timely financial insights and stay ahead of the competition. As organisations face mounting pressure to optimize costs, pricing, and efficiency, they are creating a “paperless office” within their finance functions. With the necessary regulatory frameworks in place, organizations only need to implement the right system and technologies, to start deriving benefits of the digitised business environment in finance and accounting. As for security, that is the responsibility of your cloud accounting software provider, and it’s not only in their interest to ensure their clients’ data is secure, it’s also their primary job and skill set.
There have been introductions of simple, user friendly online bookkeeping tools that allow you to store all your information in the cloud. For the ease of using traditional accounting system, it had a weighted general arithmetic mean of 2.80, indicating medium contentment, against the weighted arithmetic mean of ease of using electronic accounting system, which was at 4.54, indicating high contentment. This makes collaboration easy and helps businesses maintain transparency in their functions. Along with this, features like multi-person access and approval chains can make collaboration a piece of cake. This occupies server space, needs updates, regular maintenance, and troubleshooting.
The opposite is true of traditional accounting – while it provides a more accurate picture of your finances, it can obscure the view of your cash flow. This issue can be tackled by producing regular cash flow statements, but this involves more work. Cash accounting can provide a clear snapshot of your cash flow, so you can see exactly how much money you have to hand at any given moment. However, it can’t give a clear picture of your business’ overall financial health as it doesn’t consider accounts payable or receivable. If you’re able to choose between cash and traditional accounting, it’s important to weigh up the pros and cons of each approach. Under cash accounting, the £1,000 expense is reported on 20 October – the date the money leaves your business.
Business accounting has been hugely benefited by cloud-based accounting software solutions. This literally expanded the software market and groomed many law firm bookkeeping software brands into cloud SaaS platforms. On the other hand, consolidated cloud ERP platforms like NetSuite also incorporated accounting software solutions resulting in sophisticated financial and accounting process automation.
Traditional accounting software requires you to have a dedicated hard drive where your software is installed and financial data is stored. The end user accesses their data through a desktop application that can’t be accessed from any other device or network. In the COVID and post-COVID era, traditional accounting software would give rise to more complications as organizations are shifting to a virtual workspace.
When your data updates automatically and is always checked by both human eyes and the system it’s on, you know that you can trust that data. Maintaining your books manually is too time-consuming and ineffective to leave businesses room to gow or improve. That’s because every business that hopes to expand needs to have a firm grasp on its finances, which means having excellent accounting systems. Another huge benefit of a traditional accounting system is that when the power or internet goes out, this won’t prevent users from accessing and working on account data. For any company that needs to be able to access their account data, no matter what’s going on with the local power or internet, a traditional accounting system will fit their needs best.
