Cloud Accounting: Exploring Benefits, Limitations, and Business Use

This essay provides an overview of cloud accounting, contrasting it with traditional accounting software and highlighting its benefits and limitations for both businesses and accounting service providers like Business Plus Advisors. It emphasizes advantages such as reduced infrastructure costs, easy information sharing, and real-time business performance updates. However, it also addresses concerns like potential data loss, security risks, and higher service fees. The essay concludes with a recommendation for Business Plus Advisors to adopt cloud accounting to meet client expectations and attract new customers, while also acknowledging the importance of addressing security and cost concerns.

Running Head: Concept of Cloud Computing
Cloud Accounting

Concept of Cloud Computing 1
Introduction:
The accounting industry is undergoing drastic changes on the constant basis due to the
technological development. The evolution of new technologies has brought the new concept
of cloud computing which has actually resulted in increased expectations of the customers
and the accountants are also rethinking about the ways they must operate to fulfil the new
demands.
Cloud accounting:
Cloud technology is one of the prime technological trends in the recent times. Cloud is the
platform where any software can be accessed on the online mode anytime and from anywhere
in the world with the use of any compatible device that supports the internet connection.
Cloud accounting is the key concept of cloud technology under which data is sent to the
cloud platform where such data is processed and then returned to the intended users. In the
businesses where cloud accounting is being used, all the application functions are executed
on the off-site mode and not on the desktop of the users and this practice frees such business
from the need to install and maintain the requisite accounting software on the individual
computers.
Cloud accounting v/s Traditional accounting software:
In cloud computing, the accounting documents are dematerialised and various accounting
software are migrated to the cloud platforms that are electronic in nature. In traditional
accounting systems the accounting software is usually brought to the business as a product
and then it is installed on all the user desktops whereas cloud accounting is availed as a
service from the cloud operators who are the service providers (Aiton & Russell, 2011).

Concept of Cloud Computing 2
Benefits of cloud accounting
For Business Plus Advisors:
 Minimum Investment in Cloud Infrastructure:
To purchase and install the accounting software for the purpose of providing accounting
services, the firm has to invest a considerable amount and also the accounting software will
require regular maintenance of such software.
 Easy information sharing:
While using the cloud accounting, the client can easily share the financial information with
their clients.
 Minimum storage:
Since all the accounting data of all the clients that the accounting service provider is serving,
is stored on the cloud platform, it becomes easy for the accounting firm to manage and store
huge data so that it can readily be accessed anytime and anywhere (Khanom, 2017).
For the clients:
 Easy to find service providers
While using the cloud accounting services, they can easily find other service provider on the
cloud platform, when they are not satisfied with the service of one provider.
 Regular updates for business performance:
The clients using the services of accounting firm that has adopted the cloud accounting
technology can get real time information that allows them to check how their business is
performing.

Concept of Cloud Computing 3
Limitations of cloud accounting:
For the Business Plus Advisors:
 Large cost:
In order to avail the services of the accounting firms that are using cloud accounting
technologies, the clients will have to pay more fees than that of service providers using
traditional accounting software.
 Data loss:
When the clients use the accounting services of the firms that use cloud technology, there are
more chances of loss of important business data because of data or file misplacement. This
might affect the confidentiality of their sensitive financial information
For the clients:
 Data insecurity:
The use of cloud accounting will require the transmission of all the financial data of the
clients on the cloud platform which will involve various security challenges. When data is
kept on the online mode there is more exposed to the risk of loss, manipulation, hacking and
other cyber-crime practices.
 Traffic:
Since huge number of users are available on the cloud platform it sometimes becomes time
consuming to avail the services of the cloud operators.
Conclusion and Recommendations:

Concept of Cloud Computing 4
Business plus advisors must adopt the concept of cloud accounting in order to fulfil the high
end demands and expectations of their existing clients and to attract new clients. The
adoption of cloud accounting will allow business plus advisors to save huge cost and time in
setting up the entire accounting software. It will also save the storage of computers of the
service firm by maintaining the key data on the electronic platform called as ‘cloud’.

Concept of Cloud Computing 5
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.