Rather than purchasing a software package and loading it up on the computers or server in your office, you can do all your accounting and keep all your accounting records online in an online “cloud” accounting service.
This is becoming a far more regular way for businesses to manage their accounting, but there are some pros and cons to doing this that you need to know before deciding whether cloud accounting is the right fit for your business.
The benefits of using an online accounting service:
You don’t need to make a large up-front purchase of software. Most (if not all) online software vendors will charge you a monthly subscription fee.
Your software and data are available on any computer or handheld device. You don’t need to purchase multiple licenses or software packages for multiple computers and users in your office. Both you and your clients can access the application and the data anytime, anywhere, which can be very useful and efficient when going over data with clients.
The supplier of the online accounting software is responsible for upgrading the software and doing backups. You don’t need to download new software patches and upgrades yourself (or buy a new version of your existing software); that should all be handled on the vendor’s end.
Data and software are always as current as possible. All work is done in real-time. An invoice or cheque entered by one person can be seen instantly by someone in another location.
There are options available to take your data processing completely out of your hands and all the responsibility of your bookkeeper/accountant. There are apps that can be used that can get all your information to your accountant without ever stepping foot in their office. It’s a great solution for business owners that just don’t have the time to deliver piles of paper regularly to their accountants office.
The drawbacks to using an online accounting service:
Security is the top concern for people using an online accounting/cloud service. Online accounting services first and foremost use encryption to keep data secure. From Penn State: “Cloud services utilize more complex security methods than the average computer owner is able to devise, giving your cloud-stored data an added level of protection.”
In spite of security being the top concern for most people, the more real danger is data being lost, rather than being hacked. One of the first steps when deciding to use an online accounting package would be to investigate how the company handles data storage. If they have a history of data loss, they probably are not a good choice for your cloud accounting needs. To limit the dangers of data loss, using more than one cloud-based system to back up your files is recommended (such as Google Drive).
Your financial data is stored with a third party. Regardless of how good their security is, you have no control over what they choose to do with that data.
An internet connection is required. If your internet is down, you’re not doing any accounting today.
Moving from an office-based accounting package to one based on the cloud is a big step for any company. Shaw & Associates Chartered Accounting can help you figure out if this is a good move for your company, and which service you should choose. They can make the whole transition smooth and painless, allowing you to continue with the work that you do best.
Contact Shaw & Associates Chartered Accountants to help you out with this decision. One complimentary meeting with us will put you and your business on a more profitable and positive path.