Cloud Accounting

Ajit Singh Sangar

Introduction
What Is Cloud Computing?

What is the cloud?

Where is the cloud?

Are we in the cloud now?

These are all questions you've probably heard or even asked yourself. The term "cloud
computing" is everywhere.
In the simplest terms, cloud computing means storing and accessing data and programs
over the Internet instead of your computer's hard drive. The cloud is just a metaphor for
the Internet. It goes back to the days of flowcharts and presentations that would
represent the gigantic server-farm infrastructure of the Internet as nothing but a puffy,
white cumulonimbus cloud, accepting connections and doling out information as it floats.

What cloud computing is not about is your hard drive. When you store data on or run
programs from the hard drive, that's called local storage and computing. Everything you
need is physically close to you, which means accessing your data is fast and easy, for that
one computer, or others on the local network. Working off your hard drive is how the
computer industry functioned for decades; some would argue it's still superior to cloud
computing, for reasons I'll explain shortly.
The cloud is also not about having a dedicated network attached storage hardware or
server in residence. Storing data on a home or office network does not count as utilizing
the cloud. (However, some will let you remotely access things over the Internet, and
there's at least one named "My Cloud," just to keep things confusing.)
For it to be considered "cloud computing," you need to access your data or your programs
over the Internet, or at the very least, have that data synchronized with other information
over the Web. In a big business, you may know all there is to know about what's on the
other side of the connection; as an individual user, you may never have any idea what
kind of massive data-processing is happening on the other end. The end result is the
same: with an online connection, cloud computing can be done anywhere, anytime.

What Is Cloud Accounting?

Cloud accounting software is similar to traditional, on-premises, or self-install accounting
software, only the accounting software is hosted on remote servers, similar to the SaaS (Software
as a Service) business model. Data is sent into "the cloud," where it is processed and returned to
the user. All application functions are performed off-site, not on the user's desktop. In cloud
computing, users access software applications remotely through the Internet or other network via
a cloud application service provider. Using cloud accounting software frees the business from
having to install and maintain software on individual desktop computers. It also allows
employees in other departments, remote or branch offices to access the same data and the same
version of the software.
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With cloud accounting, its also easier to get real-time reporting and visibility throughout your
organization, with greater mobile capabilities and collaboration. Subscription-based models are
popular among cloud accounting providers, and in most cases these subscriptions are usagebased. Companies that pay a cloud accounting subscription receive updates to the software as
soon as they arrive, with no additional software purchases required.

Whats the difference between Cloud accounting and traditional accounting

software?
There are a several key distinctions between cloud accounting and traditional, on-site accounting.
For one, cloud accounting is more flexible. Accounting data can be accessed from anywhere on
any device with an Internet connection, rather than on a few select on-premises computers.
Secondly, unlike traditional accounting software, cloud accounting software updates financial
information automatically and provides financial reporting in real-time. This means account
balances are always accurate and fewer errors take place due to manual data entry. They are also
better able to handle multi-currency and multi-company transactions more efficiently.
In the on-premises world, every time a firm grows, they encounter greater software license and
maintenance costs as well as new licenses and fees for database, systems management and other
software. The firm might also have to make expensive capital purchases of new hardware, such
as servers. With cloud solutions, businesses dont get stuck with permanent, expensive
equipment and licenses when your business contracts are up and, likewise, there are no big
spikes in costs when it expands a little.
Also, cloud accounting requires far less maintenance than its traditional counterpart. The cloud
provider completes the backups, updates occur automatically and nothing needs to be
downloaded or installed on a company computer.

Review of Literature

There is a buzz in the industry regarding Cloud Accounting and why there is need to replace the
traditional means of accounting. This was the reason why I under took the study to understand
and bring out the efficiencies of Cloud computing and cloud accounting.

There are inferences from the Cisco

"Cloud computing is a model for enabling convenient, on-demand network access to a shared
pool of configurable computing resources (for

example, networks, servers, storage,

applications, and services) that can be rapidly provisioned and released with minimal
management effort or service provider interaction."

Objective
The objectives of this project are as follows
1)
2)
3)
4)

To Understand the Traditional Accounting Software.

To understand What is a Cloud
To understand what is Cloud Accounting Software.
To Analysis which way of accounting is more efficient?

Research methodology
Secondary Data is collected from the Internet.

Traditional means OF ACCOUNTING

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Bookkeeping is the recording of financial transactions, and is part of the process

of accounting in business. Transactions include purchases, sales, receipts, and payments by an
individual person or an organization/corporation. There are several standard methods of
bookkeeping, such as the single-entry bookkeeping system and the double-entry bookkeeping
system, but, while they may be thought of as "real" bookkeeping, any process that involves the
recording of financial transactions is a bookkeeping process.
Bookkeeping is usually performed by a bookkeeper. A bookkeeper (or book-keeper) is a person
who records the day-to-day financial transactions of a business. He or she is usually responsible
for writing the daybooks, which contain records of purchases, sales, receipts, and payments. The
bookkeeper is responsible for ensuring that all transactions are recorded in the correct daybook,
supplier's ledger, customer ledger, and general ledger; an accountant can then create reports from
the information concerning the financial transactions recorded by the bookkeeper.
The bookkeeper brings the books to the trial balance stage: an accountant may prepare
the income statement and balance sheet .using the trial balance and ledgers prepared by the
bookkeeper.

There are also many Accounting softwares available which has proven to be more helpful as
compared to traditional book keeping method of accounting.
Computerized means of accounting helps the accounts because the possibilities of errors can be
kept under a check. The accounts can be organized in more systematic manner

The below is the Screen shot of Sage ERP 300

Sage ERP 300 is an accounting software which is non cloud based. It is installed on one server
and can be accessed on clients machines. These are the list of few modules of Sage ERP 300.

Problems with traditional accounting software

The data in the system is not up to date

The Accounting software is not up to date.

It only works on one computer and data bounces from place to place. For example, on a
USB drive. This is not secure or reliable.

Only one person has user access. Key people can't access financial and customer details.

It's costly and complicated to keep backups (if done at all).

It's expensive, difficult and time consuming to upgrade the software.

Customer support is expensive and slow.

Access to the data is possible only from one computer.

It is expensive to install the accounting software on all the computers of the office, to
provide access to multiple users.

Characteristic of Cloud Accounting

Cloud Accounting exhibits the following key characteristics:

Agility improves with users' ability to re-provision technological infrastructure resources.

Cost reductions claimed by cloud providers. A public-cloud delivery model converts

capital expenditure to operational expenditure. This purportedly lowers barriers to entry, as
infrastructure is typically provided by a third party and does not need to be purchased for
one-time or infrequent intensive computing tasks. Pricing on a utility computing basis is
fine-grained, with usage-based options and fewer IT skills are required for implementation
(in-house). The e-FISCAL project's state-of-the-art repository contains several articles
looking into cost aspects in more detail, most of them concluding that costs savings depend
on the type of activities supported and the type of infrastructure available in-house.

Device and location independence enable users to access systems using a web browser
regardless of their location or what device they use (e.g., PC, mobile phone). As
infrastructure is off-site (typically provided by a third-party) and accessed via the Internet,
users can connect from anywhere.

Maintenance of cloud computing applications is easier, because they do not need to be

installed on each user's computer and can be accessed from different places.

Multitenancy enables sharing of resources and costs across a large pool of users thus
allowing for:

Centralization of infrastructure in locations with lower costs (such as real estate,

electricity, etc.)

peak-load capacity increases (users need not engineer for highest possible loadlevels)

Utilization and efficiency improvements for systems that are often only 1020%
utilized.

Performance is monitored, and consistent and loosely coupled architectures are

constructed using web services as the system interface.
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Productivity may be increased when multiple users can work on the same data
simultaneously, rather than waiting for it to be saved and emailed. Time may be saved as
information does not need to be re-entered when fields are matched, nor do users need to
install application software upgrades to their computer.

Reliability improves with the use of multiple redundant sites, which makes welldesigned Cloud Accounting suitable for business continuity and disaster recovery.

Scalability and elasticity via dynamic ("on-demand") provisioning of resources on a

fine-grained, self-service basis in near real-time (Note, the VM startup time varies by VM
type, location, OS and cloud providers), without users having to engineer for peak
loads. This gives the ability to scale up when the usage need increases or down if resources
are not being used.

Security can improve due to centralization of data, increased security-focused resources,

etc., but concerns can persist about loss of control over certain sensitive data, and the lack of
security for stored kernels. Security is often as good as or better than other traditional
systems, in part because providers are able to devote resources to solving security issues that
many customers cannot afford to tackle. However, the complexity of security is greatly
increased when data is distributed over a wider area or over a greater number of devices, as
well as in multi-tenant systems shared by unrelated users. In addition, user access to
security audit logs may be difficult or impossible. Private cloud installations are in part
motivated by users' desire to retain control over the infrastructure and avoid losing control of
information security.

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Why move to the Cloud?

Benefits of moving to the cloud
There are major benefits in moving your accounting software to a cloud based product including:
Here are just a few of the benefits:

Easy to use
Saves you time
No IT headache
Flexibility
Data security
More informed decision-making

Easy to use
We will help you move to your new software and make the data transfer as automated as
possible. We will also provide you with training on your cloud accounting software so you know
how to use it efficiently and get the benefits as quickly as possible
Saves you time
Online accounting brings new working practices bank feeds that automate postings into the
software from entries on your electronic bank statements, the emailing of pictures of receipts
onto your system and the scanning of supplier invoices all reduce the time associated with data
inputting.
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Small business owners work extremely hard and regularly exceed the maximum 48-hour
working week recommended by the European Union, new research from AXA Business
Insurance has revealed. The study, involving 350 UK small business owners, found that one in
four small business owners routinely surpass working weeks of 51 hours or more, so its
important to spend your time growing your business not doing your paperwork.

No IT headache
The cloud service providers do much of the IT maintenance, such as the backing up of your data
and installing software updates and this in turn reduces the need for on premise servers.
Flexibility
The reality of life is that in todays environment people are mobile - working outside of their
usual office hours and away from their office locations - on mobiles, tablets or other devices.
Thus, it is essential that users can securely access business software and data as and when
needed, wherever in the world they may be.

Data security
Some people argue that storing your data on the cloud can be more secure than storing it on your
desktop or an on-site server. Most cloud computing providers take great measures to ensure your
data is safe, including backup power supplies, firewalls, data encryption software and regular,
third-party security audits.

More information decision-making

The beauty of cloud accounting software is the flexibility it gives you to run your business,
wherever in the world you may be. You can be confident that you have an up-to-date picture of

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your business allowing you to make more informed decisions regarding your business
operations

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Bank feeds automatically

This functionality automatically imports your bank statements into your cloud based software,
you are able to memorize repeating transactions and the software will automatically match
customer receipts and supplier payments to invoices raised. This results in a significant time
saving in data entry and in reconciliation of your bank accounts. The memorization functionality
also ensures the data is coded to the correct accounts.
The user just has to upload the Bank statement in OFX format.
The below is the screen shot of Sage ERP 300, where in bank statements can be uploaded.

Automatic Backup
No more backing up files and sending them to your accountant. Third parties can access your
data with your authorization, which is then saving you time.

Multi User Based.

Several users can access your file at once on most of the cloud based products. This means that
your staff can work simultaneously or your accountant can access your file and assist you with a
query you may be having all in real time.

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Real Time Data Available

Most importantly with your data being up to date this allows for real time collaboration with
your accountant to assist making business decisions based on current and reliable data.

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Recent New Article wherein the Government is taking initiative to use Cloud
Computing

Printed from

Cloud computing Centre to come up in Vizag

TNN | Feb 19, 2016, 01.27 PM IST

Visakhapatnam: Union minister for IT and communications Ravi Sankar Prasad announced here
on Thursday that a cloud computing centre for startups will come up in Vizag. Also, he said that
the central government is planning a mega cluster policy in which AP will play a major role.
Participating in the foundation stone laying ceremony of SAMEER (Society for Applied
Microwave Electronics Engineering and Research) centre in the city on Thursday, Prasad
announced that parcel hubs from the department of posts would be set up in Vijayawada, Tirupati
and Vizag. He also said that by the end of the current fiscal, as many as 1258 post offices will
adopt digital banking apart from the existing 11090 post offices making AP the first state where
all post offices would be digital.

The Union minister said BSNL has planned 87 additional wi-fi hotspots in AP apart from 294 wifi spots in the state. He also promised that a new telephone exchange would be set up in
Amaravati as and when the capital construction takes place.

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Earlier, chief minister N Chandrababu Naidu urged the Union IT and communication minister to
consider ITIR for AP and also sought an export manufacturing hub for AP. He said that if the
central government supports export manufacturing hub in AP, then the state would contribute to
nearly 50% of the manufacturing exports in the electronics segment.

Also, apart from laying the foundation stone for the SAMEER centre at Gambheeram, a
memorandum of understanding was signed between Visakhapatnam Urban Development
Authority (Vuda) and Software Technology Parks of India (STPI) for setting up of an incubation
centre in the city.

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Suggestions & Recommendations

There is a lack of awareness as to what is cloud based Computing, hence awareness

should be created.
In India, the access to reliable internet connection is limited to the urban regions, Due to
this there is a great difficulty in opting for cloud based accounting software. Therefore

there is a need to upgrade the infrastructure across the nation.

There is lack of server security policies framed by the government which does not allow
the users to have complete faith in the cloud accounting. The government needs to

promote more about cloud accounting and create awareness regarding its security.
Cloud Accounting is the need for the day to face the Cut throat competition. Small
business should also opt for Cloud computing so that they can concentrate more on their

core business activities and the Accounting software does the rest.
The staff using such accounting software should have knowledge of using Computer
device along with accounting knowledge. There is a need to have efficient skilled labor,

which can use computers.

Lack of interest of the business houses in investing for cloud based accounting software.
Reluctant users/accounts the users are not willing to transform themselves and opt an

advanced accounting package.

Commerce students should be given training for using such Accounting packages in
universities as they are going to deal with cloud based accounting packagers in the future
when they start working

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Conclusion
Cloud Accounting is the need of the Hour
There is a need of change from traditional accounting softwares to be replaced with the Cloud
based accounting softwares, because cloud accounting softwares provide real time data which
is needed to analysis the opportunity and to make the best use of the opportunity. The users
should also be trained for using computer as well as they should be aware about the accounting
policies.
The cloud accounting software are a great support to the management as it provides real time
data which helps in decision making. The flexibility to access your companys accounts from
anywhere gives an advantage to all the users.

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References
Webliography links
www.hawsons.co.uk/cloud-accounting
www.financialforce.com/resources/what-is-cloud-accounting
www.wikipedia.com
Images from Google.
www.google.com

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