CLOUD ACCOUNTING

S.Enbazhagan| Sai Devesh U.V| N.A.C Syed Abdur Rahman

Department of Commerce

SRM University, Faculty of Science and Humanities

ABSTRACT: The cloud accounting is a rapidly developing technology, which has

brought significant changes and opportunities to various sectors in India. It is a
pervasive computing paradigm that has revolutionized how Information
Technology infrastructure and services can be delivered. There is a growing interest
around the utilisation of cloud accounting in the education sector . Cloud
accounting has become a relatively popular approach between those businesses
that would like to be agile, flexible and provident. For these purposes many
companies have started to transfer all or parts of their business processes to the
cloud platform. This paper explores cloud accounting and its merits and de-merits
which may help an organization in taking a wise decision either in favour of it or
against it. Cloud accounting is the buzz word now in the field of information
technology. It is the concept of where an organization has its data and application
hosted on a third party infrastructure. Sometimes the applications are designed and
developed by the service provider and the company using it uses that application
against its own data. There are several factors for deciding in favour of it as well as
several factors that raise strong questions for its acceptance. It is totally based on
the need of the organization, whether it leverages cloud accounting or not.

Keywords: accounting, accounting software, cloud, cloud accounting, cloud

technology

INTRODUCTION
Cloud accounting is Internet-based utility computing, basically shared resources,
software and information that are used by end-users hosted on virtual servers. The
user can use the modalities of cloud accounting boundlessly whenever demanded.
Instead of setting up their own physical infrastructure, the users ordinarily prefer a
mediator provider for the service of the internet in cloud accounting. The users have
to pay only for the services they had used. The workload can be shifted to reduce the

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Workload in cloud accounting. A load of service is handled by the networks which

Forms the cloud that's why the load on local computers is not heavy while running
an application so the requisition of hardware and software at the user side is
decreased. All we need to have a web browser to use cloud accounting. All we need
to have a web browser like chrome to use cloud accounting. The cloud computing
has many advantages with some limitations, both arising from the fact that all data
and applications are located on the Internet. Since the data stored and applications
on cloud can be access real time and online.

Reasons for Using Cloud Services:

There are a number of reasons that influence a company to use cloud services. These
are:

1. Maintaining Focus on the Business: Businesses are realizing that running an IT

department is not their core competency; they are better lawyers, doctors or
plumbers. Buying cloud services, either in the form of a single application or their
entire data center is often more cost effective, more reliable and lets them reallocate
their limited resources to growing their business.

2. Business Agility: Businesses with significant technology investments can find

themselves unable to take advantage of shifts in the market or respond to
competitive pressures because the capital, people or time are not available in the
measure needed to react. Cloud services remove these barriers, allowing businesses
to continually adapt their technology needs to their business without the costs that
would normally have to be considered with an onsite data centre.
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3. Reduced Capital Expenditures: Large capital investments can be minimized or

eliminated altogether in favour of small monthly payments. Capital can be protected
as keeping capital and operational expenses to a minimum can be very important to
small and medium businesses alike.

4. Scale: Businesses that have peak seasons or different seasonal staffing demands
can benefit from cloud services by letting them temporarily dial up more capacity for
the seasonal business peaks, without purchasing the hardware or software that
would otherwise go unused during the slower times of the year.

5. Access from Anywhere: Being able to do business without borders is one of the
major benefits of cloud services. Access to the applications and data is available to
authorized users anywhere there is Internet access.

6. Staffing Efficiency: Cloud services can help maintain an efficient technology staff,
outsourcing key technical specializations or technology staff as it makes sense for the
business.

Using cloud accounting software:

Cloud Accounting Software was mainly developed to solve the problem of portability of data. Earlier,
a file required to be accessed later was stored on hard drives or USB flash drives. Devices like Hard
drives, USB flash drives and other portable storage devices made transporting information between
multiple machines an easy process. However, these traditional methods of storage had significant
drawbacks. For example, data stored on hard drives are susceptible to loss of data through different
situations such as fire accidents, non-functioning of any of the tiny mechanical parts of the drive, etc.
In case an important document is stored on a USB flash drive there is always a chance of losing the
data during travel or due to damage occurring to the drive. The working of Cloud based accounting
software is similar to the other cloud based software. Files which are generally stored on a hard
drive are stored online. This ensures that the information is easily accessible.

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 Advantages of cloud accounting:

1. Accessibility:

By the use of cloud accounting software, users can access data from any place and
through any device having internet connection. This provides high amount of
flexibility to the small and large enterprises. Work groups and teams around the
world can access data and information and work together with no hindrance of
place. Data sharing becomes very easy with the help of cloud accounting. Users are
required to have access rights to the same system with their unique passwords

2. Security:

Security of data remains a major concern for any individual or enterprise. Cloud
Accounting has a similar mechanism of storing data as the traditional software.
Remote servers contain effective security protocols. In case of loss of the device such
as a laptop, data stored on remote storage is likely to keep the information much
safer than storage on device. The threat of data theft is eliminated in Cloud
Accounting as the user must log into the cloud account to access the software.

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3. Cost:

Capital investment is low as there are no servers at the client’s location. Enterprises
generally spend huge amounts on infrastructure required to store and manage data.
Also, this means there is lesser requirement of IT staff, so less labour costs and
significant savings

4. Easy to Use:

The software is very simple to use and contains the basic functions. For example, with
live feeds, the user has to carry out online banking and immediately the banking
transactions are uploaded.

5. Bandwidth

Bandwidth refers to the amount of data that can be transported from one point to
another within a given time period. Cloud storage does not require attaching of large
files to email. A link can be sent to refer to their colleague to the cloud.

6. Availability of vital information:

With Cloud Accounting, information is available to the user as soon as the

transactions are entered on the systems. This ensures timely management of
finances, better and quicker decisions.

Drawback cloud accounting:

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1. Risk of data confidentiality:

There is always a risk that user data can be accessed by other people. So data and
cloud protection must be good because if it won’t be dangerous for data
confidentiality.

2. Depends on internet connection:

The internet is the only way to cloud computing. When there is no internet
connection in your place, or the internet path to the cloud provider is in trouble,
automatically access to your cloud computing machine will be disconnected. Now this
is where the biggest obstacle is happening in developing countries and remote areas
that do not have good internet access, and the weakness of public cloud is where
everyone accesses the same server and server and will increase the risk of attack, and
down the server.

3. The level of security: Secrecy and security are among the most doubtful things in
cloud computing. By using a cloud computing system means we are fully entrusted
with the security and confidentiality of data to companies that provide cloud
computing servers. When you experience a problem, you cannot sue the server for
errors in the data. When you experience a problem, you cannot sue the server for
errors in the data.

4. Compliance:

This refers to the risk of a level compliance deviation from the provider against the
regulations applied by the user.

5. Vulnerable in the event of an attack:

There are lots of arguments against cloud accounting because the Cloud accounting
work system is online, each component that is on Cloud accounting can be exposed
to a wide range, and this is a wide open opportunity for attacks on data or activities
stored on the server. When an attack is carried out by hackers, the problems that
occur are data security, and data privacy.

6. Data Mobility:

It refers to the possibility of sharing data between cloud services and how to retrieve
data if one day the user makes a process of terminating cloud computing services.
And there is local storage where the data can be used at any time as needed.

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7. Technical problem:
Besides that the use of Cloud Computing makes you unable to manage it yourself
when there is a problem or a problem, you must contact customer support who is not
necessarily ready 24/7. This is a problem because for some support you also have to
pay more money.

8. Low Connection:

It does not work well if the connection is slow. The quality of cloud computing servers
is one of the most important considerations before we decide to provide cloud
computing server service providers.

Comparative Study of the Services Provided By 5 Cloud Accounting

Companies across the World

Cloud Accounting is provided by many companies across the world. These are Top 5
companies providing cloud accounting services on the global platform are:

I.FRESH BOOKS:

Fresh Books is a cloud-based accounting software service designed for small

enterprises. It basically sends Invoices and receives payment for their services. It was
founded by Mike McDermentand Joe Sawadain 2003

II.XERO:

Xero is a software company that develops cloud based accounting software for small
and medium enterprises. It was founded by Rod Drury and his personal accountant
when they felt that traditional desktop accounting software had become out-dated
and decided to create a modern cloud-based product.

III. ZOHO:

Zoho is cloud software and system developer for business management. The
company was founded in 1996 by Sridhar Vembu and Tony Thomas in Pleasanton,
California and has development offices in India.

IV.QUICK BOOKS:

Quick books are accounting software which is marketed and developed by Intuit. It is
basically used by small and medium enterprises for accounting functions and cloud
based services, which deals with payments, payrolls etc. Intuit was founded in 1983
by Scott Cook and Tom Proulx in Mountain View, California, USA.

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V.GO DADDY:

Go Daddy bookkeeping facilitates tools for tracking income and expenses. Their
services are directly Collaborated with Amazon, eBay etc. Go Daddy was founded in
1997 by Baltimore, Maryland, entrepreneur Bob Parsons.

Table showing the various services provided by the top 5

Cloud accounting companies
Company Fresh Xero Zoho Quick Go Daddy
name/parameter books books
Double entry - YES YES YES -

Mobile access YES YES YES YES YES

All major A/R - YES YES YES -

and A/P
transaction forms
Payroll - YES - YES -

Inventory - YES YES YES -

tracking
Live support YES - YES YES YES

Document - YES - YES -

management
Multi-currency YES YES YES YES -
support
Customer/vendo YES - YES - -
r portals
Training - YES - YES -
availability
Estimates - - - - YES
quarterly taxes
4 8 7 9 3

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 CONCLUSION
Cloud computing is recently new technological development that has the potential
to have a great impact on the world. It has many benefits that it provides to it users
and businesses. Cloud accounting software utilizes the Cloud to store accounting
data. It makes financial information accessible to owners and employees anywhere
with an Internet connection. Every day, more and more businesses are turning to
cloud computing. From connected appliances to Internet-based education programs,
people all over the world are utilizing the cloud as a way of connecting with
customers and making their own business practices more effective. For example,
some of the benefits that it provides to businesses are that it reduces operating cost
by spending less on maintenance and software upgrades and focus more on the
businesses itself. But there are other challenges the cloud accounting must
overcome. People are very sceptical about whether their data is secure and private.
There are no standards or regulations worldwide provided data through cloud
accounting. Users also worry about who can disclose their data and have ownership
of their data. But once, there are standards and regulation worldwide, cloud
accounting will revolutionize the future. 

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