Cloud Accounting: Benefits, Limitations, and Recommendations

This report explores the concept of cloud accounting, detailing its emergence as a result of technological advancements and its function in transferring data for processing. The report compares cloud accounting with traditional accounting methods, highlighting the reduced investment in software and increased accessibility. It outlines benefits for businesses and advisors, such as minimal infrastructure investment, easy information sharing, and data backup, and for clients, including outsourced accounting and real-time business updates. However, the report also addresses limitations, including costs, data security risks, and internet traffic issues. The report recommends the adoption of cloud accounting to expand client bases and streamline services, emphasizing its competitive advantages and the efficient management of client data. The report references key research papers on cloud accounting and its applications.

CLOUD
ACCOUNTIN
G

Concept of Cloud
• Cloud is the electronic platform where pool of computer
software is available to be used by the users of cloud
services.
• However, there is no exact definition of cloud and it is
merely used as the metaphor of internet.
• Cloud is intended to be accessed by large public in
general by using pay per use services of the cloud
service provider.

Cloud Technology
• The emergence of the cloud technology is the
result of one of the recent most technological
advancements.
• This technology allows the use of valuable
computer software by any cloud service users at
anytime and from anywhere across the world
through the use of internet connection (Aiton &
Russell, 2011).

Cloud Accounting
• Cloud accounting is the important concept of
cloud technology under which data is transferred
to the cloud platform where it is processed and
after processing it is returned to the intended
users of cloud services (Khanom, 2017).

Cloud Accounting vs.
Traditional Accounting
• In the firms that are providing accounting
services using traditional accounting software
approach, the accounting software is purchased
and installed on the individual desktops.
• Whereas, in case of firms that have adopted
cloud accounting technology, there is no need to
invest huge amount in acquiring accounting
software. Rather it can be used from the pool of
resources available on cloud.

Benefits for Business
plus advisor
• Minimum Investment in Cloud Infrastructure
• Easy information sharing
• Minimum storage
• Easy data back-up and recovery facilities

Benefits for Clients
plus business
• It will become easy for the clients to
outsource their accounting and taxation
function of the business to the service
providers who can collectively provide all
the services.
• Regular updates for business performance
through the real time information provided
by the users of cloud accounting
technologies.

Limitations for
Business plus advisor
• Involvement of huge cost to avail cloud
services because of use of advanced
technologies.
• Risk of data loss or manipulation because
data available on electronic mode is more
vulnerable to cyber crimes.
• Availability of high traffic on the internet
because of presence of large number of
users.

Limitations for Clients
plus business
• Data insecurity
• Huge traffic over internet

Recommendation
• It is advisable to Business Plus Advisors to adopt
the concept of cloud accounting in order to widen
its client base and to smoothen its service
operations.
• The use of cloud accounting technologies will give
the competitive edge over the rival firms of the
accounting industry.

Justification
• The use of cloud accounting technologies will
enable the accounting firm to provide more
accounting and other related services to the
clients effectively and cost efficiently.
• It will also allow them to maintain huge amount of
data of the clients in the appropriate manner.

References
• Aiton, W., & Russell, D. (2011). Cloud Accounting -
From Spreadsheet Misery to Affordable Cloud Erp
1st ed. eBookIt.com.
• Khanom, T. (2017). Cloud Accounting: A
Theoretical Overview. Journal of Business and
Management, 19(6), 31-38.