This article is a five-minute read post. In this post, you will find the main hurdles that classical finance management systems are unable to identify and recover. Besides, you will learn how cloud accounting software will help you overcome such challenges.
To understand this thing, let’s cast a picture of both classical and modern trends.
The on-premises software solutions have been working for many ages in accounts management. They have their advantageous perks. Like they are not dependent on the internet connection to be workable.
But they have many drawbacks as well. Their rigid architecture does not allow to manage finances of different locations from one place with ease and smoothness. Therefore, the older technology has many limitations. Such limitations lead to many challenges for the accounting department.
Old accounting software requires greater computing power to run different systems and greater storage space to save data. Also, they require a greater need for different systems to process accounting operations. Conversely, these factors play a great role in future costs.
Thus, you have to buy back up storage space, you have to pay for the power supply needed by the hardware. And what if you have a large business to handle? Hence, finance management gets even harder.
As discussed above, the higher demand for storage space and computing power leads to higher costs. As far as the cloud software are concerned, they may charge a monthly fee. But old on-premises software will cost you recurringly.
How recurring? The hardware and software updates would demand you to upgrade your whole hardware system. And on top of that, the upgrade needs are frequent; as the new versions, may require hardware changes, as they are released.
Plus, hardware configurations are tricky for a non-techie. This is why people often hire professionals to get this task done. And of course, these professionals don’t get you everything done for free.
Thus, with on-premises software, this loop keeps on going over time.
Classical solutions, at their peak times, were the best options for accounting management. They replaced spreadsheets at their times and won the race. But now in the modern era, they can not compete with cloud-based software solutions for finance management. Such software solutions have state-of-the-art features that are more flexible, scalable, and machine-independent.
Let’s read below how cloud accounting software helps you overcome the accounting challenges that old financial accounting software cannot.
Let’s understand how on-premise software configuration is harder to implement than cloud-based software. Think about building two chairs with two different things i.e. Lego and wood.
In the case of Lego, as each block is made of the same material so they are easily attachable and detachable. You can play with them and build them up in a shape of a chair of any size. Thus, these blocks are flexible enough to help you change chair shape and size by simply adding or removing blocks.
But when you have to construct a chair with woods, you need a hammer, nails, and wood. If you have to change the chair size, you may have to destruct and then reconstruct the whole structure.
This is the difference between both technologies. Cloud accounting software is easier to scale up as compared to machine-dependent software. They are not dependent on hardware configurations. All you need is a stable internet connection and any smart gadget such as laptops, tablets, or smartphones.
Centralization is the biggest feature that cloud-based accounting software offers. If your business has multiple branches in different locations, you don’t have to visit each branch to manage accounts individually.
However, a centralized repository of accounts lets you see any record from any branch on any device.
All machine-dependent solutions can present your data in a pivotal form called reports. But these reports are only of the data saved in that particular machine. There is no global reporting feature in these software solutions.
Well, again the topic revolves around centralization. When you have everything accessible due to a centralized approach, conversely, you can access every detail from beginning to date. These accounting details collectively come up as a report.
With the help of these reports, you can make effective decisions regarding future expenses to smooth the business operations. Plus, these reports help you make monthly budget comparisons to forecast the next budget precisely.
Consequently, these analytical reports help you detect patterns in sales. You can answer some questions like how much sales you made in this region or by this customer.
Thus, there are many such business parameters that you can put on these reports to generate analytics.
Modern cloud accounting software allows you to view transactions from each sales channel. You don’t have to reach the sale channel personally. Thus, no matter from which branch your sales are made, you can view them from anywhere.
Moreover, with such efficient features, you can view all of the transactions on one screen within seconds. However, the cloud-based software synchronizes transactions from every channel and helps you view them from a bird’s eye view.
For decades, businesses have been using old financial accounting software solutions that are limited in features. They convince finance leaders to do many operations manually.
So, by not investing in the right software, you could be facing terrible consequences with outdated technologies.
However, the advent of cloud technology has helped many businesses to implement cloud-based software for financial accounting management.
These software tools have broken the boundaries that were made by rigid and inflexible software. However, on the internet market, there are many cloud solutions available. You can pick one depending on your business nature and size. But there are some software systems like SMACC that are all in one and flexible for businesses of any size and type. This software is cloud-based software that is easily scalable. You can opt for this one if you are not willing to do research to find the best fit for your business.