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Tips for Accounting in The Cloud

Cloud computing is one of the fastest growing areas of IT across the globe: it was the main investment area for IT departments in 2013 and 2014 and is forecast to continue as a priority in 2015. Accounting is one profession that is taking the move to the Cloud seriously. There is lots of scope for accounting firms to move their operations to the Cloud, and many practices, both large and small are taking this option.

Let’s start looking at the benefits of the cloud….

Benefits of the Cloud

Accessibility

Cloud computing in any form offers unprecedented accessibility. With operations hosted online, work can be done in any location, from multiple devices. This is a massive boost for companies with multiple work sites, but also means that if you are with a client and need some of their information, you won’t have to schedule another meeting, as you can access it on your mobile or tablet right then and there. The other plus is that if you are having trouble finding employees in your area, having your operations in the Cloud means that if you find someone suitable in another city, or even another country, they can very easily work remotely. Particularly, offshoring compliance work can be accommodated easily.

Reduced cost

One of the most talked-about positives of migrating to the Cloud is the reduced cost companies incur. This is because the cost of server maintenance, software updates, and the software itself all roll into the subscription of your Cloud service. Moreover with operations running in the Cloud, infrastructure and hardware costs are minimal, server failures almost a thing of the past, and system admin and other overheads are also absorbed into your Cloud subscription.

Scalable

The Cloud is scalable, which means as your business grows, or a large influx of work comes in (hello tax time) Cloud applications are built to cope with these changes, whereas many traditional applications may become sluggish, require updates, hardware upgrades etc., to cope with increases in demand.

Reduced Data Entry

Data entry can take a long, long time as most accounting firms know all too well. Cloud applications drastically slash the amount of data entry required, because Cloud accounting software providers typically link up with banks and provide live feeds of client transactions, automating all that time-consuming manual entry and upload of bank and credit card transactions, and eliminating the possibility of human error in the data entry process at the same time.

Real Time Data

Cloud accounting software give up-to-the-minute data, because changes, transactions etc are updated in real time. This means you no longer have to worry about which files are the most up-to-date, waiting for clerks or assistants to enter the latest data, or upload a clumsy CSV file. Client services also benefit, as information will be up to date, so when a client calls with a question, you will have all the right information to answer in full.

Concerns of Accounting in the Cloud

Data Security

The number one concern most people have with Cloud computing is security. Will my sensitive data remain secure? Who has access to it? Where is it stored? What measures are taken to secure it? These kinds of questions are often enough to make people hesitate about migrating to the Cloud, but in reality security is less of a threat than imagined.

It behoves anyone considering the Cloud as an option to investigate thoroughly the security policy of the company they choose, just as you would explore the security measure for data stored in traditional on-site servers. Check out our article for more on security in the Cloud.

Connectivity

Most Australian accounting firms will be in areas served well enough by ADSL to function OK. But beware of serviced offices with lots of other companies. The internet may be in heavy demand by other users and you should thus check your upload and download speed. We recommend checking mid-morning and mid-afternoon on two separate days using a tool such as www.speedtest.net. Make sure you pay attention to the slowest speed recorded with that tool.

If you have a need to upload large amounts of data in the cloud you will need close to 1Mb/s upload speed. You can run the cloud software on much less than that but uploading files will take time, so consider upgrading your plan with your (or the serviced offices’) ISP (Internet Service Provider). If in doubt about you internet speed, check with the cloud provider about your particular business demands.

What to Look for in a Provider?

For accounting firms, Software as a Service (SaaS) is where the Cloud has the most benefit. Platform and Server hosting are also available on the Cloud, but most find that the software services more than cover their needs as an accounting firm. Leveraging the benefit of the Cloud depends on choosing the right service provider to match your needs. You can find everything from the basic accounting needs to stream-lined accounting with links to clients’ banks, automated transaction updating, batching etc.

Some of the more well-known accounting SaaS providers include Xero, Saasu and Quickbooks Online. MYOB also has a Cloud offering known as MYOB LiveAccounts, and Reckon’s online versions is known as Reckon Accounts Hosted. There are many lesser-known providers as well, all with their own pros and cons.

You want to be able to fully replace your standard accounting software with the software provided by your Cloud host, so ensure it has all the basics, like the possibility of both accrual and cash-based accounting, efficient reconciliation, and a feature-rich chart of accounts. In addition, to really get the most out of the Cloud experience, ensure your provider has if not all, then some of the following integrated into their software packages: automated bank feeds, invoice emailing, payroll functions, automated tax lodgment, cheque deposit slips and in-depth, customizable reporting capabilities. Your individual needs as a firm will reflect your clients’ needs, so if applicable, check for multi-currency capability, sales tax integration, split transactions and client portals.

You also might consider looking into the add-ons compatible with the provider you are considering and how their mobile applications differ in functionality, if at all.

Other Considerations of the Cloud

Data security policy

It is imperative that you check the company’s data security policy before moving your data to their servers. You need to know who has access, how that access is granted, how many security levels are in place, what happens in the instance of a breach, where the data is physically stored and who has access onsite etc.

Multiple data warehouses in different locales

Check whether the vendor you choose has their services hosted across multiple zones, with multiple data warehouses. This ensures that your software services will not go offline should one host-zone or data center experience a problem.

Customer support

Customer support is a crucial element of a happy Cloud experience. As any problems will have to go through customer support, you want to make sure there is an efficient and qualified support team ready to help you out. This can easily be assessed before making any decisions, as most companies have user reviews online that give good assessments on customer support experience.

Intuitive and user friendly interface

Lastly, you want their user interface to be intuitive in design, and to be easily understood and navigable. Most accounting software on the Cloud is designed in the ‘dashboard’ style, with overviews, controls etc. easily viewable from the dashboard, and further functions a click away. You should be able to have a trial of the software and the backend setup before migration, to ensure that the design and functions are a good fit for your needs, and are easily negotiated.

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