How the Cloud accelerates collaborative accounting (and why your business needs it).
(Read time – 4 mins)
Collaborative accounting is the process by which one or more interested parties can participate in the accounting machinations of a business or firm at once. As a business function this idea has been around for years, after all, transactions involve several people so it makes sense they all have a stake in it. Also it makes sense to have a system that offers checks and balances within any process. The reason the concept is gaining popularity is thanks to the proliferation of cloud accounting technology that is making collaborative accounting easier and more efficient.
Collaborative accounting requires that parties have unfettered access to the necessary data and be able to work on it efficiently. Those parties can include accountants, clients, customers, employees and anyone else that has a stake in the information. Cloud technology can facilitate access to data and files from anywhere in the world, all that’s needed is an internet connection. This connectivity makes working on simultaneous accounting practices as easy as logging in with a name and a password. Multiple parties can connect and work on a file in real time. This does away with the need for sequential processes in an accounting workflow, where each step would be time dependent on the previous steps. Everyone can work and communicate at once. Data is entered in real time and updates are made in real time, which all equates to better reporting and analysis.
Collaborative accounting saves on business costs thanks to the efficiency it delivers. No time is wasted because no one is kept waiting for information. Everyone is working in the same place rather than waiting for the work (or their role in it) to be made ready for them. The direct integration of people and work streamlines processes, improves communication, and minimises direct client queries. Cloud based collaborative accounting makes significant savings in capital outlay as no hardware or software needs to be implemented, and usually only a small subscription fee is paid.
Document sharing amongst parties is made simple with cloud technologies. Files can be uploaded, copied, sent and downloaded in seconds without the need for costly and time consuming snail mail or physical archiving services. Cloud technologies also improve security within a collaborative environment thanks to virus scanning, data encryption and layered security protocols. There can be no lapse in responsibility as all these functions are automatic. Permissions can also be set to effectively manage the actions of interested parties so no-one can interfere with data they aren’t privileged to. Each action in the collaborative space is logged which maintains a flawless audit trail for improved reporting features and functionality.
Cloud accounting enhances the collaborative work environment thanks to increased access to data in real time and significantly speeding up workflows. Cost savings are made in infrastructure and security is also improved. Our previous post on the benefits of cloud accounting more broadly than just collaborative accounting is available here if you’d like more information.