The cloud came in a boon for dreamers who wished to witness new technological advances in the world. It has completely transformed our lives.
A few of these changes can be seen in the way we order food online, update our status on Facebook, pay our bills, and operate our bank accounts. All these wouldn’t have been possible without the cloud.
The cloud has touched almost every industry globally, helped businesses grow, and enabled organizations to reduce their expenses. The accounting industry isn’t an exception either. Cloud accounting software like hosted QuickBooks offers better functionalities and reliability than their desktop-based counterparts.
But what’s the technology’s role in accounting tasks during a tax season?
During the tax season 2020, it became a huge challenge for tax preparers, CPAs, and accountants to share data and collaborate with their clients to offer their services. However, firms that were already using the cloud were in a better position to overcome such challenges as cloud accounting offers anytime access, secure file sharing, and better data security.
With so many arrows in its quiver, how can cloud computing help your accounting tasks in tax season 2021?
Let’s have a look:
1. Remote Access
2020 has been a crucial year in determining the role of the cloud in the accounting industry, and the same will help you during the tax season 2021. Cloud computing allows you to host your accounting software and business data on a remote server and give you the freedom to access it from anywhere in the world (with the help of a stable internet connection).
3 ways by which cloud computing allows remote working:
A. Multiple Device Compatibility
If your favorite applications and business data are hosted on the cloud, it allows your employees to work from the device of their choice. For instance, your sales team can update order details while on the move using their iPads or smartphones. In short, they are not bound to a single operating system or hardware.
B. Saves Space
The majority of accounting businesses in the USA are small companies. This means that they do not have the funds and office space to deploy physical servers for data storage. The cloud gives them a way to store their data safely and remotely, where it can be accessed easily.
C. Better Collaboration
In 2020, the accounting firms have been forced to work from home due to the COVID-19 pandemic, causing a lot of trouble for accountants and CPAs to collaborate and with the clients. The same trend is expected to continue in 2021. However, firms that were already using the cloud, were better equipped to survive these tough times as they could share, edit, and access the files simultaneously.
2. Data Security
2020 has been an industry-changing year in terms of data security. The recent ban on applications like TikTok and WeChat proves the same. The users have become more concerned about how their data is used, and several companies have brought in multiple new changes in data security norms.
The same trend will continue during the tax season 2021, even for accounting firms. This is where the cloud can help firms as your data is stored in secure remote servers.
As accountants handle sensitive information such as credit card details, social security numbers, and more, a small data breach can be a significant roadblock to your accounting tasks and the reputation of your firm.
The cloud offers sturdy data security to safeguard all your data. Also, reputed service providers have a team of IT professionals monitoring the online security of data and CCTV coverage and physical security with biometric access for personnel authentication. Additional security measures include the use of the latest firewalls and antivirus, data encryption, and intrusion detection.
The cloud offers data security in the event of a natural disaster as well. It ensures that your business does not suffer any downtime, and your productivity isn’t affected. Your data is stored on multiple servers. As long as you have internet access, you can access the accounting data to complete your tasks.
The tax season 2020 has been hectic and unpredictable because of the COVID-19 pandemic. To limit the spread of the virus, people were forced to stay inside their homes and complete their accounting tasks. This put more than usual pressure on internet service providers and organizations to scale their network to the growing needs. This is where the cloud can help.
The virus is not going anywhere, anytime soon. So, tax season 2021 will also witness people working from their homes for their accounting needs. The cloud can easily accommodate the growing needs of accounting firms very quickly. For instance, firms can increase their storage capacity and processing power on the cloud by contacting their service provider. Another added benefit is that all these IT infrastructure changes are done without expensive hardware investments.
Because of such high scalability of the cloud, organizations are now relying on this revolutionary technology to prepare for the tax season 2021. Service providers usually have a team of cloud experts who understand your requirements offer quick and easy resource allocation. From small firms to big organizations, the cloud is here to help everyone in accounting tasks.
4. Business Planning
Another way in which the cloud can ease accounting is by offering proactive business planning. It can easily store large chunks of data, and when combined with technologies like AI and ML, the data can be used to draw meaningful insights. However, some may find it confusing to identify the areas in which the offered business planning can benefit.
The main objective is to understand the client’s requirements and figure out what the numbers mean. As most businesses are SMEs, their numbers are pretty straightforward to understand.
Do not try to overcomplicate things by thinking and analyzing too much and try to get answers to the following questions.
Is Business Profitable?
All you need to do is to analyze the break-even budget. It will reflect the sales required to cover all the expenses and move towards positive business growth.
What does the Cash-Flow Look Like?
Businesses do not make profits every month. There are times when they slip into the red zones. However, an in-depth analysis of the accounting data can minimize this slip.
The cloud has proved reliable in 2020, as most businesses were shifting to remote working. It is remarkable to see how this technology is ready to help firms and companies manage their accounting tasks during the tax season 2021 with offerings like scalability, flexibility, eased remote working, and in-depth business analysis.