What Is Cloud Accounting and Where Is It Headed in 2015?
Although cloud accounting is becoming more common, many business owners and professionals still aren't quite sure about what it is or how it could benefit them. Here's a rundown on what cloud accounting is and where it's headed in 2015.
What is Cloud Accounting?
Today, many applications are developed for use from different platforms — such as Apple's iOS, Google's Android, and major Web browsers. To ensure seamless user transition between these platforms, developers store data on the Internet, in a secure "cloud," rather than on the user’s physical machine. This allows users to access the same data from any location, on almost any device with an Internet connection.
Cloud accounting takes advantage of this flexibility, allowing business owners to access and update their financial and accounting data securely from anywhere. Cloud accounting also allows small-business owners to avoid the high costs typically found with traditional accounting software — including the initial purchase, installation, upgrades, routine backups, and disaster recovery plans — as well as the risks associated with loss of data or system malfunctions.
What Happened in 2014?
As a whole, cloud-based applications experienced a growth boom in 2014. Google Drive, for example, hit 190 million active 30-day users, while SAP reported a 32 percent growth in their cloud business in the second quarter alone.
Cloud-based accounting also had an impressive year, reaching $1.7 billion in revenue in 2014, according to Forbes. The reason for this growth may be due to users growing more comfortable with the idea of accounting services in the cloud. According to a survey run by SoftwareAdvice.com, over 50 percent of small-business owner respondents said their confidence in cloud-based accounting options were "moderate" to "high."
What to Expect in 2015
Look for continued growth in the cloud accounting industry over the next year — according to Forbes, the cloud accounting industry is expected to break $2 billion by 2016. The SoftwareAdvice.com survey also points to increased usage in the near future, with more than 50 percent of respondents saying they would consider moving their accounting to the cloud; 32 percent said they were "moderately likely" to move to cloud-based accounting, with another 16 percent saying they were "very likely" to do so.
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