Goodie Gumdrop: Accounting Choice for Startups - Cloud vs Traditional

This report analyzes the accounting choices for startups, specifically focusing on Goodie Gumdrop, a wholesale business. It compares cloud accounting and traditional accounting methods, considering factors like cost-effectiveness, security, accessibility, and the potential for manual errors. The report recommends cloud-based accounting for Goodie Gumdrop, highlighting its ability to generate financial statements and reports efficiently. It references existing literature to support its arguments, emphasizing the advantages of cloud accounting for startups, such as ease of use and comprehensive financial reporting capabilities, while acknowledging the potential limitations of both approaches. The report aims to provide a clear understanding of the benefits and drawbacks of each accounting method for startups, enabling informed decision-making.

Accounting

In the present era, most organization are making an effort to automate their accounting system
because of ease of recording and storing accounting transaction, and very few startups are using
traditional approach of accounting.
Both the accounting approach is appropriate in their own way, but it is necessary to adopt a
better accounting which suits the organization best. Goodie Gumdrop is a startup, so it is
essential for them to work with a limited budget (Christauskas & Miseviciene, 2012). Thus,
potential advantages of cloud accounting software for them is that it is cost effective and more
secure because of its sustainability as compare to traditional accounting approach. However,
accessibility to software is affected if the business has to poor internet connection and employees
may not be well versed with updated software.
Despite lots of benefits of cloud accounting various businesses prefer traditional approach of
accounting because owners who want to control their data securely and do not require to access
data anywhere other than office can go for traditional approach of accounting (Dimitriu & Matei,
2014). Further, cloud accounting companies require an agreement of usage of their software
which is not possible for the business who has uncertain future. However, disadvantages of the
traditional accounting system are that chances of manual error are high.
On the basis of the present, I will recommend to Goodie Gumdrop who is a startup wholesaler to
go for cloud based accounting system rather than implementing a traditional accounting system.
Cloud based accounting system is capable of doing complex things in an easy manner (Daru,
2016). It has the ability to generate all the important details of the firm whether related to the
ratio or P&L account or position statement in seconds.

REFERENCES
Christauskas, C., & Miseviciene, R. (2012). Cloud–computing based accounting for small to
medium sized business. Engineering Economics, 23(1), 14-21.
Dimitriu, O., & Matei, M. (2014). A new paradigm for accounting through cloud
computing. Procedia Economics and Finance, 15, 840-846.
Daru, M. U. (2016). Role of accounting software in today scenario. International Journal of
Research in Finance and Marketing, 6(6), 25-34.