Cloud Accounting Model and Its Impact on Accounting Process

Abstract
With cloud computing transforming the Information Technology industry, the business sector has
equally received a major boost coming from the creation of cloud accounting.With cloud
software, your data lives online on secure servers – as opposed to on your hard drive. In the event
of a natural disaster or fire, being in the cloud means business productivity doesn't need to be
affected because there's no downtime. All of your information is safely and securely stored off
site. Looking at the vicious competition in the market today, it has become necessary for
businesses aiming to achieve their goals in carrying out both internal and external analyses,
which enable a smooth transition with the ever-dynamic market trends. Accounting, as a critical
area behind the growth of any business, has not been left behind in this evolution, with
technological innovations availing accounting software that was unimaginable in the past years.
This is basically; a cloud technology based accounting system, which avails numerous services,
revolutionizing the accounting industry as all the traditional and cumbersome paperwork oriented
system is replaced by a more convenient and equally reliable cloud-based accounting set up. This
wake in accounting, despite being new in the market has received positive feedback with close to
half of modern business setups embracing the approach. This paper aims to revisit cloud
accounting from spectrum possible spectrum as illustrated herein.

Keywords: Cloud computing, Cloud accounting, Models.

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Introduction
The field of accounting has for so many years stood the test of time and remained
applicable to businesses in their regular operations. Accounting is an industry that is undergoing
so much change, largely sparked by vast advances in technology. The evolution of cloud
accounting is changing customer expectations and accountants are rethinking the way they
operate to meet the new, often heightened, demands. People are ready to not be tied to the
paperwork in their business; they want to focus on the things they are most passionate about.
Technology is helping them find a better work/life integration. With cloud computing,
businesses can have up to the hour, even minute, financial information that can be fully
accessible and managed by their accountant.

One of the biggest technological trends at the moment is the emergence of cloud
technology. The cloud is a platform to make data and software accessible online anytime,
anywhere, from almost any device having an internet connection. In cloud computing, users
access software applications remotely through the internet or other network via a cloud
application service provider.
cloud”, where it is processed and returned to the user. All
application functions are performed off -site, not on
the users’ desktop, which frees the business from having to install and
maintain software on individual desktop

According to Yonghong (2007), accounting is the area that manages essential business
procedures, like record keeping, this made accounting integral to many organizations, as
accounting strategists are able to tell whether the business is heading the intended direction.
Looking at the rapid technological advancements, which have created a complete turnaround in
everyday living, the business world has not been spared forcing organizations to make the
necessary adjustments in light of the ever-changing market dynamics. By this accord, the
innovation of cloud accounting, which is described as cloud-technology based advancements that
have spearheaded the formation of software, hosted on mobile servers, which enhance storage,
transfer, and access of information over the internet. According to Christauskas & Miseviciene,
incorporation of the same into business has revolutionized operations, as needed data can be
retrieved when, if and where required meaning accountants have been forced to rethink their
approaches as cloud accounting is the gateway to even more advanced future innovations. This
essay takes all the aforementioned issues into consideration seeking to point out how cloud

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computing is modelled scoring on its concept, benefits, delimitations and impact on accounting
among others.

Concept
It is important to note that cloud accounting has roots in cloud computing technology,
which facilitates networking; whereby resources are organized and attached to the internet over
terminals meaning users need only the internet to access the resources. The idea of cloud
accounting was put forth in the year 2011, where technological innovators merged their cloud
technology into business developing virtual accounting data storage and processing platform. To
garner insight on cloud accounting, note a number of factors that facilitate the procedure. To
begin with, it is of an essence to comprehend that cloud avails services in three formats which
include; SaaS (Software as a Service), PaaS (Platform as a Service) and finally, IaaS
(Infrastructure as a Service). SaaS is a type of service in which software sourced from the
internet is installed as an application availing the needed services to the consumer who renews a
subscription, as designed by the manufacturer.
On the other hand, PaaS allows users the cloud capacity to access resources they need for
application development and execution of software programs, thereby eliminating the need for
the alternative hardware-software approach, which is difficult to manage. Additionally, IaaS
which seeks to eliminate the purchasing and management of software for end users availing more
enhanced User Interface (UI) interactions between the service and the user. In other words,
installing software to facilitate command executions and relevant responses is no longer needed;
instead, everything is virtualized and hosted over networks to vail the services when and if
needed. Harnessing the skills of experts, these services are merged into an organizations process,
and inclined to function in accordance to accounting needs (Dimitriu & Matei, 2014).

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Deployment models for cloud in business

In this context, models are used to represent the various channels through which the
incorporation of cloud accounting into organizations can be achieved. There are four models
which include;

Private Cloud Accounting:

In this model, cloud resources are directed towards creating cloud services, which are sourced
and operated within the constrictions of a single organization. In other words, the single premise
structuring permits only internal access and management of the information stored over specific
channels. Significantly also, this method is regarded as the most secure as chances of third-party
compromise are limited.

Public Cloud Accounting Model:

As suggested by the name, this model evokes capacity for the larger public to access the cloud
services, which is made possible for organizations aiming to get more consumers as well as giant
institutions to efficiently manage accounting operations for instance; government agencies,
schools, hospitals and public service provider centres just to name a few.

Community Cloud Accounting Model:

The cloud service avails interconnections between different organizations. This enhances
exchange and storage of information over cloud channels which is critical in the creation of

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vertical markets. For like driven organizations cloud connectivity that mothers accounting makes
it easier for idea sharing, in turn boosting businesses as organizations get to learn to utilize
market analysis grasping want is working for the organization and what is not.

Hybrid Cloud Accounting Model:

Is the combination of two or more of the aforementioned models, which, is designed to avail a
wider scope of services to organizations. By use of cloud computing, it becomes easier for
organizations to manage portable media and other virtually enabling platforms.

Cloud Accounting Software Providers in India:

The issue of software provision is at the heart of the cloud accounting. The software sets
in motion the wheels behind the whole cloud accounting concept. Over time, technological
advancements have seen new software make way into the market, each with its own unique
element that sets is aside from competitors. This paper identifies the following software
providers;

1. Tally.ERP 9

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Tally.ERP 9 tops our list of accounting software as an end-to-end solution to GST statutory
regulations as current reformer changes get in the financial accounting system of India. Tally is
equipped with error detection capabilities that minimize any chances of rejection in GST returns.
Starting from creating invoices, creating ledgers, printing cheques, stock aging analysis, cost
estimates, profit analysis, auto bank reconciliation, or any critical overviews; Tally is your
business acquiescence partner. As your business grows, Tally helps in generating instant reports
and makes quick decisions. Tally is a simplified yet unique solution that allows the business to
handle accounting and manufacturing details by implementing minimum resources.

2. RealBooks – Online Accounting Software

RealBooks is second on our list, a cloud-based accounting software developed in India for
businesses looking to digitize their accounting processes through a scientific design.RealBooks,
the IndiaMart-funded company, offers a GST-compliant accounting solution, easy to use, and
designed to fit the needs of practicing Chartered Accountants, businesses such as Automobile
dealerships, Traders, and many more.

RealBooks offers unique features like attaching documents to the Transactions & Masters, Multi-
Branch Accounting with Automated Voucher postings, Automated GSTR2A & 2B Reconciliation,
insightful reports, real-time data sync, and a Mobile App that is available on Android and iOS
platforms, making it accessible to businesses of all sizes.

3. Zoho Books

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Zoho Books is a popular online accounting software in India, which acts as an integrated
platform for end-to-end financial solution. Zoho Books is GST compliant, automates business
workflow, and manages financial accounting and help in managing departments collectively
from one single source. According to finance expert, Zoho Books is one of the most preferred
accounting solutions for growing business. Right from maintaining sales orders and invoicing,
Zoho Books mundane GST invoices, bookkeeping, huge ledgers, and various accounting tasks.
Zoho Books is feature-packed to manage cash receivables, payables, banking, inventory,
timesheets, and business contacts and generate reports. Zoho Books is available at affordable
pricing to make you GST filing experience easier and error free!

4. MargERP 9+

MargERP 9+ is a GST enabled inventory and accounting software in India that makes GST
billing and filing easy. Generate batch wise invoice, get detailed information on a business
transaction, avail auto bank reconciliation, encode and centralize barcode, and push GST
transaction on the portal. MargERP 9+ helps in selecting the right GST slab and segregate
transactions accordingly. The software directs detailed and automates calculations of SGST,
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CGST, and IGST. MargERP9+ is a trade specialized solution that is highly affordable in price
and customizable in features. With more than 2500 software configuration and 500 tutorial
videos, the software is easy to implement and lets you build functionality to business support.

5. Vyapar

Vyapar tops the list of accounting software for small Indian businesses. The accounting software
is a free platform that allows maintaining invoice, getting inventory records, managing books of
accounts, and tracking daily business activities while focusing on business growth rate. The
software eliminates paperwork and helps business management to utilize productive time on
business development. Since most of the small sector business needs a digital upgrade, Vyapar
acts as an effective solution. Vyapar is GST compliant and allows error-free tax returns while
eliminating errors occurred with manual calculations. Vyapar takes charge to control individual
units of the business, creates customizable invoices, and automates payment reminders.

Factors to Consider When Choosing Loud Accounting Software

Machine Learning (ML): This basically refers to the software capacity to advance its algorithms
giving the software the capacity to auto modify. For instance when YouTube avails the
recommended videos based on user searches, the modification to facilitate such is what is
referred to as ML. For an organization, the fact that given software can advance with the
advancements in internal accounting structure is an added advantage. Artificial Intelligence (AI).
Artificial Intelligence capacity is what allows systems and machines to operate normally minus

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human oversight. For a growth-oriented organization to have software that solely avails market
trend graphs and information to an organization that has been picked from the internet, that is AI
in play.
Integrations and Extensions, this basically refers to the ability to integrate data sets from one
department to another, allowing instant conveying of information.
Expressively, for a company’s human resource department to be able to pull employees details
from their sale graphs over media and incline them in the HR systems to determine pay,
demonstrates integration and extension capacity.

Benefits of Cloud Accounting

Analysing the cloud accounting operations and services it is undeniable that it can foster a
number of advantages to the organization. They include;

Cloud Accounting is Less Costly

This is made possible by the many available annual and monthly subscriptions which
greatly save on costs, as compared to the traditional methods of accounting. Moreover, due to the
recent advancements in cloud computing, virtual User Interface interactions have been
intensified making it easier for persons with basic computer skills to access the services
(Pacurari& Nechita, 2013). To companies and small-scale business enterprises, this is critical as
it eliminates the need for technical experts who would have otherwise been expensive.
Additionally, by the mere fact that the tax waivers could be introduced in the future as well as
unstable hosting dynamics, the responsibility to incur set costs is incurred by the manufacturer
insulating organizations. All a company has to do is pay the required monthly or annual
subscriptions on the computing software’s and have the cloud accounting debt lifted off their
shoulders (Youssef, 2012).

Enables Real-Time Updates

Traditional accounting required the use of voluminous paper storage strategies to ensure
that data and information were recorded when and where it was required. Take up an instance
where due to unavoidable circumstance or forethought irregularities, a change needed to be made
and yet about fir hundred pieces had the error recur in them. Cloud computing is aimed at
eliminating hassles of this nature, whereby, by use of programs the service provider only has to
adjust the contentious variables and in no time have the host working as should. Furthermore, by
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incorporation of cloud computing services where organizations pay for software on a monthly or
annual basis, updates can be designed to accompany both manufacturers as well as end-user
organizational needs (Treves, 2017).

Access of information anytime anywhere

Cloud accounting allows storage of information, which is hosted on cloud, which makes
it easier for the authorized or required parties to retrieve the information that they desire. This is
as opposed to the traditional methods of accounting where single computers and users were
tasked with the mandate of enhancing information retrieval. This meant that in their absence their
colleagues upon needed vital urgent information had no alternative but to wait or summon them
from other activities, which may have been of importance to the organization. However, with the
coming of cloud computing technology, which was later merged into the business as cloud
accounting, companies can even go the extra mile of availing products to be showcased to
potential customers through utilization of the internet, which saves time on both parties
(Weinhardt, et al. 2009).

Security of the Information stored

Tales have been told of how critical information tom companies was lost, to the many
threats that information is susceptible to including; virus attacks, hard disk crashes and physical
human alterations among others. In many times, this unfortunate turn of events has created a
major problem in the system, zeroing companies that had made major steps (Rosten, Porter &
Drummond, 2010). This is very devastating especially for small business enterprises where it
happens the entrepreneurs invested a lot to guarantee the success of their businesses. Cloud
accounting aims to remedy all these challenges providing a guaranteed secure storage system of
critical files and information that the company cannot afford to lose. This ensures that even in the
unfortunate loss of information stored in the physical memories of hardware elements, the cloud
avails the information which can be retrieved setting operations back to normal.

Time-Saving
Think of a network, fully sufficient to the extent all authorized parties have been
connected through cloud induced networks to retrieve the information they need wherever and
whenever they may be. A person in point A for instance updates vital information like the market
analysis report directed to interconnected employees to utilize in strategic development. People
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in point B have travelled for a business convention but in their hotel rooms, they have been
availed with WIFI networks. Even if the meeting is scheduled, the next day it becomes easier for
them to instantly access the information, just like the people in point A. The next time all the
required members are meeting, the time that could have been used in shedding light on the
unformed can be utilized in strategy development as everyone is in the loop of what is going on.
This is the exact manifestation of the revolution that cloud accounting seeks to trigger, where
information remains the least of organization’s worries, availing more time for developmental
projects within the organization.

Prompt detection and fixing of bugs

In cloud computing, every bit of information is accounted for in a structured way. Unlike
the traditional paperwork accounting systems, where error detection leaves alone fixing took
ages, cloud accounting utilizes automated “Imonitor” services to detected irregularities and
unwanted fragments in the files stored over the cloud. In the event an error has been detected,
correction is prompts can be achieved, through updating of software and having IT experts
resolve the issue, which based on the Imonitor services is very easy to detect. Additionally,
looking at the protection protocols put in place by the server managers it is difficult for software
as through debugging, mechanisms ate put in place that detects and contain the bugs till the next
updates.
Improvements Efficient for organizational
Every futuristic organization seeks to maximize on strategies that will elevate it to the
next level in operations, starting from harnessing local, regional, and finally aiming for the global
spectrum. With this in mind, a strategy from all pivotal point is embraced in the quest to realize
the set visions alongside missions. Cloud accounting avails a number of services ranging from
storage to utilization of cloud technology to carry out market research and design on consumers’
feelings and needs. Furthermore, through the software companies that avail services on
subscription, it enables the company ample time to resolve financial challenges if emergent,
bearing in mind that despite being cut back from access, cloud account information is still. This
is as opposed to traditional methods whereby small businesses could be put on the edge due to
insufficiency in funds to cater for IT specialists. Concisely aside, cloud accounting availing
accesses to vast beneficial business resources, pay as you go software services eliminates stress
in financial difficulties.

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Enables Automated Data Back Up
Regardless of how careful people managing businesses are, the truth is mistakes are
unprecedented and unplanned for, meaning you never know when things will go wrong. Amidst
these challenges, cloud computing through its auto back synchronization alongside the user
initiated ones ensures that in the event primary stored data is compromised, other secondary and
tertiary back up locations facilitate recovery. Additionally also looking at the vast amount of
storage space that is available in the cloud, organizations can develop and embrace and upload
and management plans at specific times. For instance everyday midnight, when computers are
not in use, they can be set to carry out upload intricate information to the unlimited cloud space.

Cloud Accounting Related Drawbacks

Taking a closer look at the incorporation of cloud accounting some drawbacks were also
uncovered. It includes, one, due to the fact that cloud accounting is made possible through
networks, it depends heavily on internet connectivity scoring out organizations and enterprises
that may be lacking the capacity to have a stable connection, and due to factors they cannot
resolve. Additionally, despite the many efforts to safeguard data from third-party hijacking, the
truth is there are hackers who keep advancing their techniques using Trojan, Malware incision,
phishing among other unethical methods who through trial and error can be lucky to gain
unauthorized access to business information, crippling down organizations. Finally, on the part of
software developers, who are behind the creation of the cloud account services, hacking of
voucher codes for upgrades, in so doing causing major losses.

Conclusion
Cloud accounting utilizes software to avail immense accounting services to organizations
wishing to make the transition. Weighing on the above-expressed arguments, it is an undeniable
fact that cloud accounting is a “here to stay” concept. It stands as the gateway from traditional
accounting to the technologically advanced modern accounting, where considering the benefits it
has fostered so far, the future of cloud accounting looks bright. However, most businesses
clouded by fear of having their information compromised have shied away from embracing this
major milestone, this means software providers should work on strategies to address this

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shortcoming. The fact remains, cloud accounting will take over very soon, meaning businesses
should adapt if at all they want to triumph this vicious competition storm.

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