Online accounting, also known as web-based accounting, cloud-accounting, or e-accounting, is essentially the use of the internet and other allied technologies to streamline day-to-day accounting tasks of a business. Like e-mail is the electronic counterpart of traditional mails, online accounting is the online counterpart of traditional accounting that is legally recognisable.
Online accounting software available in the market today is built with many essential features required for businesses to keep their accounting streamlined. These software are based on a monthly fee, and a zero-administration approach to help businesses keep away from unnecessary expenses and focus on more important tasks.
Accounting software represents a class of applications that process and record transactions via important modules like trial balance, general ledger, accounts receivable, etc. Being cloud-based, accounting software eliminates the reliance of businesses on physical, paper-based documents. With accounting software, all the accounting information is stored on the cloud, on one centralised platform, that can be easily accessed using the internet and relevant devices.
However, as is with every technological advancement, the presence of online accounting, too, has come with a plethora of myths that need to be debunked to get a clear full picture of what accounting software is and what capabilities they provide.
Let’s look at some myths around online accounts and try to bunk those!
Myth #1: Accounting software defeats the purpose of having accountants
This myth ties back to the age-old question (and scare) of machines taking over and replacing humans. However, the truth is far from this. In reality, machines and humans work in an augmented way to give the best results. So, while the automated accounting software is good for mundane and day-to-day tasks that help you stay on top of your accounts, your accountant will still be needed for making strategic decisions and choices. For the best functioning of any accounts department, there will need to be a collaborative effort of automation and manual labour. Just that the manual labour can be used for more strategic purposes while online accounting software takes care of the automatable, routine tasks that are extremely important but error-prone if done manually.
Myth 2: Small-scale businesses can do without cloud accounting
This myth is as far away from reality as possible. The truth is that all businesses require cloud accounting to ensure that nothing in their books goes amiss. The logic behind this myth is that mostly big businesses spend on tools and software.
However, the function of accounting is critical for all businesses – whether small, medium, or large. Furthermore, small-scale businesses generally have a lot to take care of. In that scenario, having accounting, too, is a real burden in that list of tasks. With accounting software, small-scale businesses can focus on scaling more while online accounting software takes care of most accounting-related tasks.
Myth 3: Cloud accounting can be expensive
There are numerous tools and software available for different causes in today’s world. The same is true for cloud accounting, too. Therefore, making generalised statements such as “cloud accounting is expensive” is extremely unfair.
The cost of your online accounting software will come down to the features and modules you require, and that ties directly to the stage of growth of your company and its vision for the future. Without addressing these things, you will not be able to come to the perfect accounting software for your business. In general, cloud accounting is not expensive but extremely customisable. And the cost that you finally pay depends on the feature you wish to avail and the modules you want to use for your business.
Myth 4: Financial data is not safe in the cloud
This is one of those myths that is really understandable since business owners are mostly anxious about sharing their financial data or storing this data in someplace that is not completely in their control. However, this fear goes out the window once you realise the amount of security and security measures online accounting software provides. Most accounting software of today comes bundled with strict security measures, including 2-factor authentication, access control, and more so that you get to decide who views and manages your company’s financial data.
In conclusion, online accounting software provides small, medium, and large businesses a lot more strength by taking control of their day-to-day accounting tasks. These software give business owners the freedom of knowing all their accounting information at any time, at any place. This freedom directly correlates with their ability to make more strategic decisions for the business and scale higher! If you wish to switch to online accounting for your business, check out Dext online accounting software!