Many business owners swear by the efficiency of Excel and vouch by the fact that they've had no problems with it. There's no doubt that Excel is a great product to keep complex financial records. But the biggest drawback of Excel is that it is not interactive, which can lead to a host of problems.
What is the problem of using Excel as an accounting software?
Imagine this: an accountant inadvertently moves one decimal point upward in the Excel sheet. Depending on the size of your business, this can snowball into a single account reconciliation that is off by thousands or even millions of dollars. Do you really want to be in such a situation? Why not set aside a few dollars for a cloud accounting solution that highlights such errors?
Let’s look at some of the flaws Excel has:
- Excel does not provide a balance control feature of an accounting system as it is only a medium to hold data and not analyze it.
- It often creates a problem such as over/understating profits or budget shortfalls. This is mainly because Excel is only as good as the user who is handling it.
- There is virtually no way a human error can be checked on Excel as it has no system of notifying error.
Advantages of cloud accounting software
An accounting software employs a double-entry accounting method which weed out human errors, giving you more accurate financial records. With the absence of cloud accounting software, accountants are compelled to mail across the newer versions of financial records with every small revision. This proves to be time consuming, tedious and often irritating.
1. Eliminating single ledger
Such wasteful tasks are completely eliminated when you opt an accounting software. Everyone who has access to this software would see the same information across the board, making this a very efficient tool.
2. Secure data
Your data also remains secure. You are no longer dependent on the health of your hard disk. Businesses can have devastating effects when financial information is lost due to viruses or computer crash-downs. You are insulated against such risks through cloud accounting as all your data is securely stored in remote servers.
The data communication is also done in a secure manner. There is no chance of financial information theft as all access to information is logged giving you an exact idea of who accessed what.
3. Timely and accurate information
Cloud accounting software converts data into actionable information, which can be used for business decision making. So, your financial records actually become a source of information rather than a mere requirement for tax purposes.
If you are contemplating a move to a proper accounting system in the cloud but are sceptical about it due to fears about technology, security, or any other concern? It's now time to take action.
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