Nowadays, Finance is one of the major business functions to get serious about adopting cloud technology. Despite the possible cost efficiencies, the risk-averse nature of many financial organizations puts CFOs at risk of being late to the cloud technology.
However, with the changing business needs, business accounting has become a complex and challenging undertaking. Here, with an inherent ability to fulfill these needs, cloud accounting has gained huge popularity over the traditional accounting, especially among the CFOs.
We enumerate the following reasons behind this scenario:
1. Better cash flow management. The largest financial benefit of cloud computing, especially in these capitals constrained times, is avoiding taking on debt and saving cash in the company longer (see example). If a project uses a cloud-based service provider, then the CFO avoids writing a big check upfront. Alternatively, checks are written monthly or quarterly in alignment with the return.
2. Investment: Pay as you go rather than spend upfront. With a cloud-based system, you pay just for what you use, and you can terminate the contract easily. An on-premises system means spending money upfront for benefits that may or may not materialize.
3. Greater financial visibility. A cloud-based service provider can tell you how much it will cost to add a user or process another transaction. That visibility is a comfort to a CFO who must keep track of where the money is going. In most situations, IT is hard-pressed to deliver that same sort of financial transparency.
4. Return on assets. One of the advantages of cloud computing’s pay-as-you-go pricing model is that the cost is incurred in the same period that the value is delivered. For CFOs, this implies that the balance sheet doesn’t carry an ever-depreciating capital asset of hardware and software that lowers the important financial metric of return on assets.
5. Access Anywhere, Anytime : Perhaps, the most popular advantage of cloud based accounting is its support for mobility. You can access your financial system anytime and from anywhere, because it can be accessed from any mobile device with internet connection.
To know more about how cloud accounting can help your business run efficiently and grow rapidly, please contact us.
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