One of the most exciting changes in the accounting industry is cloud accounting. The concept is easy to grasp: cloud accounting simply puts your accounting system in a private space online so that it is fully accessible to you via a browser or a secure remote connection.
Two Ways to Be in the Cloud
There are primarily two ways to have your accounting system in the cloud. First, it can be “hosted.” This means that the current software you are using on your desktop, such as QuickBooks or Sage, does not change. Neither does your company file.
The only thing you do differently once your software is hosted in the cloud is to click a different icon to start the software. Once you log in, everything else is pretty much the same. There are a couple of differences in printer access, Microsoft Excel® access, and some of the other interfaces, but it’s essentially the same experience.
So if it’s the same, why would you want to move to the cloud? Because it completely eliminates the passing back and forth of the file among you, your CPA, your bookkeeper, and anyone else that needs to update or access your accounting file. No more restores. No more DropBox or YouSendIt downloads. No more emailing the accountant’s copy and importing changes.
Hosting saves a lot of time because the people you grant access to can login to your file from anywhere at anytime that’s convenient for them.
The second way to have your accounting system in the cloud is to switch to an online accounting system. In industry jargon, this is called SaaS, which stands for Software as a Service. Examples of online accounting systems include QuickBooks Online, Xero, Wave, and Kashoo. These systems have fewer features and will only be right for a company that needs a simpler accounting system.
When you switch from desktop accounting software to SaaS, it will likely require conversion, setup, and training. It’s a major change.
There are many benefits to moving to the cloud; here are just a few of the more common ones:
- Anywhere, anytime access to your accounting system. Companies with multiple locations will benefit significantly from a hosted solution.
- No more worrying about who has what version and whether the changes the accountant made were updated or applied. There is one central file, and multiple people can be accessing it at the same time as long as you have the right number of user licenses.
- No more software updates that you have to apply yourself or wait for. This is done by the hosting provider or the SaaS.
- Tighter security for your data. The data centers typically have multiple state-of-the-art data security controls and must pass a rigid audit, which is far more protection than any small business can afford to provide for their own data.
- Automatic offsite backup for disaster recovery purposes.
Clients’ two major concerns include security, which is covered above, and costs. When it comes to costs, the most important thing to look at is return on investment. Will the time you save be of greater value to you than the costs of hosting or moving to a SaaS? That answer varies for each company.
Curious About the Cloud?