Unless you have been living under a rock, chances are you have heard the term “Cloud technology.” It is becoming the new norm in many industries, including the accounting industry. Intuit predicts that 78% of small businesses will use cloud technology by 2020. Not only is it incredibly convenient, but it also provides a higher level of security than many people realize.
As a bookkeeper or CPA, you need to keep yourself in the loop with this new technology and its advantages. For your knowledge and so you can help your clients understand as well. Let’s go over the basics of using the cloud for accounting purposes and also some of those advantages.
What is cloud computing?
The short answer is cloud computing is a service that gives the ability to store, access, and edit your companies data from a virtual location as opposed to, in the past when we stored data at a physical location. It is moving computer services outside the company firewall and using the web to access their applications, storage, and other services. Using the cloud this way gives businesses the unique ability to work in or out of the office. It also allows office personnel the ability to share, edit, and publish documents quickly with each other, regardless if working in the office or remotely. As you can imagine, this dramatically improves communication among co-workers and overall enhances the daily workload and office moral.
Data is safe and continually available
On top of improving daily work tasks, another massive advantage of cloud storage is its constant availability. Data is available day and night, 24/7/365. Cloud computing providers use giant server farms, so downtime is rare or non-existent. These server farms are smart! They know how important the information is they store, so they have implemented fail-safe practices. They guarantee access to your data regardless of severe weather, power outages, or anything else you can imagine. (Zombie apocalypse anyone?) No more stress of a lost or stolen laptop that contains secure data or a fire at the office, destroying vital information. If there is internet availability, you can access your data from any mobile device or computer.
In addition to constant availability, cloud computing can scale to the size of your business needs. As your business grows, you are easily able to secure more space for your additional data. The opposite is also true so that you can downsize your space.
Think of cloud computing like the filing cabinets we have seen all our lives. Just like the cabinet, the cloud stores all your essential business data but off-site in a virtual setting. No need to find room in your office for yet another cabinet for additional storage!
Cloud Security
The idea of constant availability is a massive draw for many to switch to using the cloud, but the worry of how secure it is is an equally huge drawback. In this day and age, this is understandable, cybercrime is a real threat, do not make the mistake of taking it lightly. That is why security is a top concern of any cloud storage company.
As a CPA firm, not only is the security of the data mandated by compliance, it is also the law. A breach can lead to hefty fines, loss of business, and many other unappealing possibilities. While the cloud computing companies are well versed in security, it does not mean you are off the hook to sit back and assume everything is safe and secure. You need to do your due diligence.
It sounds simple enough, but a strong password is the best line of defense. No more Password123 or your bday or the street you live on. Hackers will have that cracked in seconds. Creating a different password for different accounts is also a good idea. Don’t create a situation where once someone has your one password, they have an open range to all your information. Accounting software is full of financial data which makes it a prime target for any hacker. Take that extra step and create a unique password; it will save time, energy, and possibly even dollars and cents in the long run.
Second, choose the right people to have access to your data. Let me say this again, choose the right people to have access to your data. Do background checks, create an environment of trust and, monitor the activity of those with access. A few simple steps, in the beginning, can save time, money, and heartache in the end.
Lastly, make sure your cloud company holds regular, scheduled external security assessments. Don’t just assume, follow up. Follow up is a KEY step; This will help ensure continuing compliance with the agreed-upon data accessibility parameters.
Cost
Imagine being able to eliminate the expense of purchasing the software and the hardware, the servers, the cost of utilities to keep it all running smoothly plus the IT expert you keep on hand. Those things add up quickly! Not to mention the peace of mind and less stress cloud accounting can provide, that’s priceless. While yes, the cost is relative, what one company thinks is too expensive can be considered a bargain to another. But after you run the numbers, unless your company is IBM or GE, chances are switching to cloud accounting is going to be a cost saver.
Going Paperless
A fourth and highly underrated benefit of using the cloud is the ability to “go paperless.” Going paperless creates a decluttered desk, organized office space, and saving a few trees along the way. That alone should convince anyone to switch to the cloud!
Working in the cloud reduces the chance of human error. It makes what you need to save easier to save and store and what you need to find more available and easy to find. No more lost paperwork or misplaced receipts. The ability to communicate quickly with your clients and co-workers improves your client relationships, no more “I will get that information to you when I get back to the office tomorrow.”
Cloud accounting is coming, and the more you learn, the easier it will be to understand and implement it into your firm’s workday. Don’t be left behind by burying your head in the sand, embrace the technology, and see how it can transform your business. There is endless information available about cloud technology and cloud accounting specifically, don’t let it overwhelm you, I covered the basics here but feel free to let me know of any additional questions you may have.