Has coronavirus changed bookkeeping forever?
The global health and economic crisis triggered by coronavirus is a heavy burden for businesses. Even those for whom remote working is possible had to solve the problem of accessing the data they need in order to stay operational.
Traditional bookkeeping software is typically installed on a dedicated computer drive, only accessible by a licensed user through a desktop application on their machine.
Now take your bookkeeper out of the office, and ask them to work from home.
- They no longer have access.
- You can’t simply leave receipts or invoices on their desk to process.
- They can’t chase payments, because they don’t know who has paid, or not paid.
- And so on...
Fortunately, fintech has evolved to a point that cloud accounting software resolves many of these accessibility issues. Bookkeeping software has, in most instances, been moved to the cloud, and what a relief that is in unprecedented times like these.
The global spread of COVID-19 has contributed enormously to the sudden surge of businesses moving over to cloud-based bookkeeping software. It’s an industry that had been seeing robust growth anyway, but the necessity of making changes in order to continue functioning has pushed some business owners off the fence.
But what is the difference between cloud and traditional accounting software?
There are three major differences between traditional accounting solutions and their newer, cloud-based accounting cousins: how accessible they are, how easy it is to grow, and how much it costs.
Accessing bookkeeping during lockdown
Cloud-based software essentially means that your bookkeeping data is stored on a remote server, and accessed through a highly secure online interface, anywhere with an internet connection. Unlike traditional accounting software, users are not restricted to a single machine from which to access what they need, so access doesn’t stop when the building closes.
It means that data is no longer stored locally, and instead provides multiple authorized users with round-the-clock access to real-time information. Managers, accountants, clients and bookkeepers can all even be in different places and time zones and yet continue to monitor and control the business’s financial health.
Growing the bookkeeping with the business
Growing the business can be an expensive business for users who rely on traditional accounting software. Hiring an additional bookkeeper? Better buy more computer storage, upgrade the local server, and increase the bandwidth access to it as well. If you don’t, things can slow down, and suddenly two bookkeepers are working at the rate of one.
The impact of COVID-19 on bookkeeping practices has forcefully demonstrated the sheer versatile scalability of cloud accounting. It’s up to the software provider to manage server space, speed and performance, and usually for the cost of a monthly subscription, which is much more financially flexible.
And that brings us to cost
Fewer local servers mean less real estate is needed to house them. That’s certainly one way to reduce the expenses that come with a larger property footprint.
Most cloud accounting software providers offer access on the basis of a monthly or annual subscription fee, usually including all the server storage you could need.
The software is online and updates itself at the source. No more paying for the IT team to come out and install updates on everyone’s individual machine.
At times like these, businesses tend to either grow or shrink rapidly, whether that’s long or short term. Monthly subscriptions offer flexibility to businesses who need to furlough or hire staff on a rapid turnaround.