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Cloud Accounting System OZ Assignment Help
In this topic, the learner will discuss on the various feature of traditional accounting system and a cloud accounting system and hence a company can apply the required structure based on the theory.The discussion consists of information about the traditional and conventional computing, popularly known as cloud computing. The learner has elaborated the essentials that combine the information from different secondary sources. With the help of the information deciphered, the learner has discussed the elements of accounting standards that are required by the organization to grow.
In this modern world, the cloud-based accounting system is gaining more popularity over the traditionally based accounting system. One of the main reason behind this is that the cloud-based accounting system is more flexible and with the help of internet connection any information can be accessed from anywhere on any mobile device (Chandrasekaran, 2014). Cloud accounting helps the accountant to enhance the productivity of the firm. However, cloud accounting also has the various shortcomings.
Cloud accounting system- Cloud accounting system is software which provides accounting capabilities to businesses in a similar fashion as of saas (software as a service) business model. In these resources is made available to the users on demand via the internet as the data stored in “clouds”.
Traditional accounting system-Traditional accounting system is software which requires a hard drive to store an accounting data(Chatfield & Vangermeersch, 2014).
Comparison between traditional accounting system and cloud accounting system
Cloud accounting system
Traditional accounting system
In cloud accounting the software stores the accounting data and account related information in the “cloud” making it available to owners via an internet connection (Oliveira et al. 2014).
In a traditional accounting system, the software has a drive on which the data is installed and the information can be fetched.
In cloud accounting system there is no need of hard drive as the information can be derived from anywhere with the help of an internet
In traditional accounting system the data cannot be derived from anywhere else, so in this case, the hard drive becomes necessary.
Cloud accounting is generally cheaper as it functions at more than one platform and one can access the information from anywhere.
Traditional accounting is not cheap as it requires a hard drive and it can function at one platform only.
The license of the cloud accounting system remains with the service vendor (Toosi, Calheiros & Buyya, 2014)
While the license of the traditional accounting system is with the company installing it (Oliveira et al. 2014).
In cloud accounting system one does not has to be in office to get a required information or data. The person can access to information from anywhere via the internet.
In traditional accounting system to get information, the employer or an employee has to be in office to review the paper-based records or the desktop based records. In traditional accounting system, 24/7 accessibility is not available
Cloud accounting system automatically backs up the data, minimizing the risk of forgetting it and minimizing the possibilities of any errors.
In a traditional accounting system, someone has to manually backup the recent accounting information.
In cloud accounting when new data is entered, it populates each location where the adjustment is required (Oliveira et al. 2014).
In traditional accounting system when one figure has to be changed, it meant manual recording of the figure where the changes have to be made.
Risk or limitation of a cloud-based accounting system:-
1.Cloud accounting may not support all the application that you have; they will only provide what they have. Some of the requirements that you are looking for may not be available in the cloud accounting.
2.In cloud accounting, as the software utilizes the cloud to store all accounting data so, in this case, there is an issue of loss of control. There can be a challenge to store the data on an unknown server.
3.Cloud accounting is more reliable on the internet connection. So if the internet is offline then the business also becomes offline. In cloud accounting, the internet connection has to good while the poor connection can frustrate the user. If the internet service suffers from the regular server down then the cloud accounting may not be suitable for the company (Lakew et al. 2014)
Businesses that should install the cloud-based accounting system:-
If a company wants to operate 24/7 then the company should go for the cloud accounting system as through cloud system one can access the information from anywhere through internet by setting up the password. If the company needs the regular backup facility then the cloud-based accounting facility will be best for the organization. Even if the company operates at a wide range and the data has to be shared then the cloud-based accounting system will be appropriate for the company. Small companies or the start-ups who needs to work with the employees that reside in the remote areas should go for the cloud accounting system as the system saves the time and funds while installing it (Jones & Smith, 2014).
A company which is looking for quick and fix solution should go for the cloud accounting as the data is stored in the “cloud” and in which any physical mishaps cannot hamper the business. The users can get all the information from anywhere through a good internet connection and he does not have to be present in the office all the time. Going for the cloud accounting also gives the user to get the accessibility 24/7.Cloud accounting is also low in cost as there is no required of a hard drive and if there are any mistakes in the data then the cloud accounting software will automatically make the required adjustment.
On the other hand, if the company is looking for more security of the business then the owner of the company should go for the traditional accounting system. The reason behind this is that the data will be on the premises and it will not be stored on the unknown server. The small organization should always go for the traditional accounting system.
Hence, both the accounting systems have their own benefits. Therefore the company should figure out the particular benefits they want to get from the required accounting system.
Chandrasekaran, K. (2014). Essentials of cloud computing. CRC Press.
Chatfield, M., & Vangermeersch, R. (2014). The history of accounting (RLE accounting): an international encylopedia. Routledge.
Jones, M., & Smith, M. (2014). Traditional and alternative methods of measuring the understandability of accounting narratives. Accounting, Auditing & Accountability Journal, 27(1), 183-208.
Lakew, E. B., Xu, L., Hernández-Rodríguez, F., Elmroth, E., & Pahl, C. (2014, September). A synchronization mechanism for cloud accounting systems. In Cloud and Autonomic Computing (ICCAC), 2014 International Conference on (pp. 111-120). IEEE.
Oliveira, A. C., Chagas, H., Spohn, M., Gomes, R., & Duarte, B. J. (2014, June). Efficient network service level agreement monitoring for cloud computing systems. In Computers and Communication (ISCC), 2014 IEEE Symposium on (pp. 1-6). IEEE.
Toosi, A. N., Calheiros, R. N., & Buyya, R. (2014). Interconnected cloud computing environments: Challenges, taxonomy, and survey. ACM Computing Surveys (CSUR), 47(1), 7.