Cloud Based and Traditional Accounting System Assignment Help

Cloud Based and Traditional Accounting System Assignment Help

Cloud Based and Traditional Accounting System Assignment Help


This report studies in detail the traditional method of accounting and the cloud-based accounting method used in recent times. It discusses the benefits and drawbacks of each of the system used. It makes a suggestion regarding the type of businesses who will benefit the most by using these systems.

Cloud Based and Traditional Accounting System Assignment Help

Traditional Method of Accounting

The traditionalaccounting system is the method of accounting manually with the use of paper. In traditional accounting, the accounting is done in paper and saved in files. The traditional method of accounting is very cheap but it takes a lot of place to store. The files are saved by the companies and located and consulted at the time of requirement. The traditional accounting is used by any firm to calculate profit, expenses or costs and other such vital information that is to be kept by the company to consult at the time of need. Financial accounting is a must for all businesses and there are two ways of doing it. It can be done by using traditional accounting or by the recent practices of cloud-based accountings. (Königsgruber, 2010)

Cloud Based Accounting System

Cloud is an online platform where information could be stored and no physical space is required to store the data. No space in the computer is even required to save the data. The cloud-based accounting system is an online accounting system. Cloud-based accounting is done by using software. The software does all the calculation for the firm. The heads of accounting remain same as traditional accounting just the calculation is done by using software and the data is saved online. (Hwang et al. 2011)

The differencebetween the traditional method of accounting and cloud-based accounting system:

Traditional accounting


  • Traditional accounting system requires more physical space.
  • The traditional accounting system requires physical calculation which is subjected to human error
  • The recovery of data is difficult because the files have to be manually searched to recover data
  • The chances of the destruction of data are higher in the case of physically saving of the data. Physically saved data can be destroyed due to any accident in the office. Even if insurance is done it is not possible for the company to recover the data.
  • The physical data can be locked with keys which can be stolen by breaking in
  • Access to the data can be only possible by physically viewing the files
  • Cloud-basedaccounting system do not require any physical space, no RAM or any other computer memory space is also required to save the data
  • In a cloud-based accounting system, the calculation is done by using software, the accuracy of calculations by using cloud-based computer system is much more accurate than human calculation.
  • Recovery of data is much more easy, just by using keywords data can be recovered in cloud-based computer system
  • In the case of saving the data on an online platform, it is easy for the company to be secured to it. No physical accident can omit the data. Even in the case of destruction of the computers, the data saved in the cloud system is safe.
  • In the case of cloud computing, the safety of the data from undesired access can be checked by using various passwords. But the chances of hacking into the data remains.
  • The data can be availed at any point of time

Potential Risks and Limitation of using Cloud based Accounting System

There are various risks and limitations of the cloud-based accounting system. The cloud-based accounting is only possible if there is an adequate supply of internet. In case there is an internet failure the entire system becomes out of reach. By using cloud-based accounting the data can be accessed at any point of time and at any location, provided there is adequate internet supply. The chances of online hacking cannot be absolutely ruled out. Hacking is a cyber crime; it is possible for criminals to access vital information of a company by hacking. There are other types of criminal activities done on the internet like virus attacks which can also be used to destroy data. (Armbrust et al.2010)

Businesses that will benefit from Cloud Based Accounting System

The businesses which want to do the accounting easily and store it safely it is important for them to use cloud-based accounting. The small businesses can use this software to get rid of spending time on tedious accounting practices or saving the bills generated and keeping a record of invoices etc. Small businesses do not have a huge amount of data and yet they require accounting practices to judge their financial position. The data of the small businesses are relatively safer because there is no huge competition that is faced by small businesses which can attract criminal activities.  (Wang et al. 2010)


To conclude it can be said that cloud-based accounting system is the future of accounting. This system facilitates the accounting calculations much more easily than the traditional method of accounting. Though there are some limitations and security issues till now regarding the widespread use of the system but eventually the system is going to develop. The rapid growth of the use of the internet is one of the indications that the online cloud based accounting is going to spread more in the near future. For now, the small businesses are the ideal clients for using this system. In addition to the same considering the cost and the scale of operations big organizations are also suited for cloud-based accounting systems whereas the smaller organizations are more suited for the traditional system of accounting.



Königsgruber, R. (2010). A political economy of accounting standard setting. Journal of Management & Governance, 14(4), 277-295.

Hwang, J. J., Chuang, H. K., Hsu, Y. C., & Wu, C. H. (2011, April). A business model for cloud computing based on a separate encryption and decryption service. In Information Science and Applications (ICISA), 2011 International Conference on (pp. 1-7). IEEE.

Armbrust, M., Fox, A., Griffith, R., Joseph, A. D., Katz, R., Konwinski, A., ... & Zaharia, M. (2010). A view of cloud computing. Communications of the ACM, 53(4), 50-58.

Wang, C., Wang, Q., Ren, K., & Lou, W. (2010, March). Privacy-preserving public auditing for data storage security in cloud computing. In Infocom, 2010 proceedings ieee (pp. 1-9). Ieee.