So much is going on in the accounting world that it’s a challenge to stay on top of all these developments. Where we see a rise in remote workforce, there’s a heightened need for data security, automation, and data analytics to make informed decisions.
However, at the core of all these new developments is cloud computing. It’s the thread that ties almost everything new with the accounting industry. The cloud accounting software industry was valued at $3.5 billion in 2023, and it’s expected to reach a value of $7 billion by 2032, growing at a CAGR of 7.8%.
This shows the growth potential of the industry powered by the high adoption rate. Let’s find out what are the advantages of cloud-based computing and which are the best cloud accounting software in India.
Understanding “Cloud” in Accounting Software
Adding cloud to accounting takes the entire schematic of things one notch above as the same software you were using earlier on-premises can now be used without being fixated to a single location.
Deployed in the form of Software-as-a-Service (SaaS), the cloud accounting solutions are hosted on remote servers. All the data you enter into such a system is transferred to the cloud, processed there, and then returned to the users as required.
Everything happens on off-site servers, which means you don’t need physical servers present in the organisation. Cloud accounting software works with internet connectivity, which means access to the software is only possible through a stable connection.
A Brief History of Cloud Accounting
The first cloud accounting software was introduced by NetLedger (today known as NetSuite) back in 1999. Salesforce’s cloud accounting software followed after this, and these two together made the world realise that they can take accounting to more places at once.
In India, the integration of cloud accounting happened gradually and simultaneously with the penetration of broadband. The rising internet connectivity and the infrastructure on which it was built provided the foundation for cloud accounting to become a viable option.
Impact of Cloud Accounting on Indian Business Landscape
Cloud accounting has several advantages for businesses, regardless of where they are located. Since we are only talking about cloud accounting software for Indian businesses, the following benefits will only focus on the Indian business landscape.
1. Real-Time Access to Data
Cloud-based accounting gives you access to data in real time. This is essential for accurate financial reporting and analysis, which aids in decision-making. With access to timely information about economic performance, businesses can make changes in their spending and other heads on time.
This real-time data accessibility is even more crucial in a hyper-competitive environment where on-time monitoring can make a big difference. With this, businesses can track profitability, monitor cash flow, and even make strategic decisions to drive growth.
2. All Time Access to Data
Through the cloud accounting software Indian businesses use, they can access data via the internet anytime and anywhere. It’s as simple as logging into their accounting with credentials and start working.
This accessibility has become a game changer for businesses as now they don’t need company accountants to sit in the office or wait for them to fax reports. The flexibility allows business owners to always stay connected to their finances and make decisions on the go.
Then, there’s flexibility and scope of collaboration. It’s possible for multiple people to have access to the same information simultaneously. This means they can work together and stay on top of financial management, whether in the office or outside.
3. Automate Repetitive Tasks
Businesses that refrain from using automation are left behind as they waste time on doing repetitive tasks. Automation in accounting means the solution you use will;
- Reconcile bank statements;
- Update inventory;
- Produce recurring invoices;
- Schedule reports;
- Pay subscriptions;
- Post transactions in the correct ledger.
Automating all these words saves businesses money in salaries and also increases work efficiency. Moreover, every business can always benefit from a faster turnaround time, which leads to faster report generation.
4. Better Data Security
Believe it or not, saving data on the cloud is more secure than letting it rest on on-premises servers. Cloud service providers have multiple levels of security, including advanced encryption and access control.
While this ensures only authorised users have access to financial records, it can also back up your data on the cloud servers. Even in case an employee loses their system or runs into an error, the data will remain secure on the cloud servers.
5. Cloud Accounting is More Scalable
One of the most appealing aspects of a cloud accounting solution is scalability. If you are still using spreadsheets and balance sheets to maintain the accounts, the task gets highly complicated as the business grows.
Especially with startups and SMEs that experience a high growth rate they don’t want to be stuck with a system that they can outgrow, isn’t it? Cloud-based accounting solutions are essential in this scenario as they can scale according to the business needs.
6. Ability to Customise
Where cloud solutions can be scaled, you can also customise them according to your requirements. The way cloud accounting solutions are built allows you to tailor the features, processes, and workflows depending on how your company operates.
With a SaaS cloud solution like Mocha Accounting, you can also customise the dashboard, ensuring the most important information is always in front. The level of customisation in cloud-based solutions can vary, and some tools even allow you to customise the terminology.
7. Plenty of Integrations are Available
Online accounting solutions offer a wide range of integrated business applications that share the same central database as your accounting data. This means you can add more modules and functionalities to your accounting software as the need arises.
Developers of these solutions understand the requirements of modern-day businesses and how everything in an organisation ultimately comes down to high-impact accounting. So, within the core solution, you can integrate payroll, inventory management, and marketing, among others.
These are the advantages that separate cloud accounting solutions from the traditional ones.
| Feature | Traditional Accounting | Cloud Accounting |
| Accessibility | On-premises servers, which limit accessibility. | Remote servers allow access from anywhere. |
| Updates | Updates are to be done manually and it’s time-consuming and costly. | Automatic updates are provided by the developer. |
| Collaboration | Limited collaborations as two people cannot work together at one time. | Better collaboration with real-time and simultaneous access. |
| Pricing | Required upfront investments, which is particularly for startups and SMEs. | Subscription-based pricing, while some solutions also have free access. |
| Flexibility | It’s difficult with an on-premise software to adapt as per your needs. | With a cloud-based one, you can add and remove, which also adjusts the billing. |
| Maintenance and Backup | You have to run manual backups and updates as they arrive. | Updates and backup is automated. |
Which are the Best Cloud Accounting Software Indian Businesses Can Use?
It’s no longer a matter of convenience. But, choosing a cloud-based accounting software today has strategic importance as Indian businesses are gaining traction on the global landscape.
Even within India, access to cloud accounting means these businesses can benefit from scalability and flexibility of these solutions, as we have discussed above. Here are the top recommendations for cloud accounting software that Indian businesses must check out.
1. Zoho Books
A comprehensive solution boasting a wide range of features suitable for small and medium-scale businesses, Zoho Books has a user-friendly interface. The software is designed to make accounting simpler and accessible for everyone while streamlining financial management.
- Zoho Books features invoicing, expense and inventory management, project management, bank reconciliation, tax compliance and a lot more.
- You can use the in-built multi-currency support to handle international transactions and there are several integrations to choose from to custom-build a better accounting system.
2. Xero
Another popular cloud accounting solution with business-friendly features, Xero caters to businesses of all sizes. Known for its user-friendly interface and set of powerful features, Xero also boasts a ton of features.
- You will get the same package as all the other solutions, like invoicing, billing, expense tracking, inventory management, and payroll, among others.
- In addition to these, a set of advanced features is available, including time tracking, reporting, and payroll management.
- Xero has two versions, one for businesses and another for accountants and bookkeepers.
- You will als get tax compliance features built to calculate sales tax and income tax.
3. FreshBooks
FreshBooks is a cloud accounting software Indian businesses have adopted rather quickly due to its specific interface. Built for small businesses and freelancers with mind, it helps them take control of accounts and be self-sufficient in the majority of these tasks.
- Key features include invoicing, expense tracking, reporting, time tracking, and payment processing.
- You can also manage clients through FreshBooks, which means adding their information, communicating through the platform, and handling payments.
4. Mocha Accounting
Mocha Accounting is one of the few accounting solutions that is specifically built for the Indian economy. We say this because, where you get all the features like other solutions, Mocha Accounting offers a dedicated GST portal. So, where you can take care of your accounts, you can also ensure GST compliance with Mocha Accounting.
- Some of the key features you will get with Mocha Accounting include invoicing, billing, inventory, banking reconciliation, and reporting, among others.
- Wherever applicable, you will get in-built GST compliance features, for instance, you can create GST-ready invoices.
You can start using Mocha Accounting for free anytime and from anywhere. You can choose a plan that suits your business needs and scale it up or down as required.
One Last Thing; Does Cloud Accounting have Data Security and Compliance Risks?
Yes, they do. In addition to offering numerous benefits, a big challenge with their adoption is data security. There’s a lot at risk with cloud-based accounting solutions.
- Data Breaches: Unauthorised access to a cloud accounting solution can lead to data breaches and loss. It can also expose sensitive company information to hackers who can leverage it to dupe you out of money.
- Data Loss: For businesses losing data is even more dangerous as now they face significant financial losses. Not only can it cause operational disruptions but losing an account of what payments are made, which are yet to be made, and which ones are to be received can halt businesses altogether.
- Third-Party Vulnerabilities: 3rd-party integrations, while important, also pose a risk. A lack of security from the subcontractor’s side can expose the main accounting software you are using to unnecessary breaches.
- Regulatory Compliance: Businesses need to comply with various data protection regulations while using accounting software. However, if there are issues in the software regarding these compliances, the businesses using them have to face consequences.
While the issues are there, you can easily bypass them by running a few checks before choosing a cloud accounting software, including;
- Only work with a reputable software company or services provider.
- Always review the software’s security measures. Check their data encryption levels, access controls and disaster recovery plans.
- Perform due diligence into the service provider including running a background check, checking reviews online, and asking the community.
- Ensure the software you are about to use is regularly updated with the latest features and security updates that address vulnerabilities.
To Sum It Up
Cloud accounting is here to say, no doubt about that. But for businesses to stay relevant, they also need to grow and update themselves with the technology. While advanced cloud accounting solutions will continue to remain, it depends on your requirements on which ones are the best for your business.
The right cloud accounting software Indian businesses choose will ease financial management, bring forward hidden insights, and streamline the work.
Having said that, Mocha Accounting is one of the best choices you can make for your growing business. It offers a ton of business-friendly features at low prices and GST compliance in-built to further streamline your work.
Check out how it works as we take you through a free demo. Book yours today.
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