Cloud accounting is becoming more and more a part of the business world, with its ability to access your data from anywhere, at any time. Instead of sitting on a local hard drive, your financial package is housed in the cloud — a centrally localized arena that everyone can access, based on his or her permissions.
“Just in my experience, I’ve moved 80 clients to QuickBooks online since June. The world is all going that way,” says Deborah Defer, associate director in the assurance department at SS&G.
Smart Business spoke with Defer about what you should know about cloud accounting.
What are the benefits of using a Web-based accounting program?
Owners that travel and/or have multiple locations have the ability to have everything at their fingertips, which simplifies things. When you’re moving around you can still access your real-time data, as long as you have an Internet provider.
The biggest benefit, however, is the ability to collaborate, whether internally or externally. For example, external accountants can work in the system from their location at the same time as company personnel, which increases efficiency. The ability for more than one person to drill down and see all of the details, rather than a piece of paper with the balance sheet or profit and loss statement, allows everyone to work smarter and faster.
At the same time, Web-based accounting separates and isolates different company duties, which improves internal controls. You don’t want your sales representatives looking at financial information; instead they can build sales estimates through the customer relationship management system that synchronizes to the accounting system.
You also have built-in accountability with audit trails that allow you to see who accessed what and when.
Finally, Web-based accounting can be more cost effective because you don’t have to worry about paying an IT staff to do back-ups; that’s already provided.
What about security measures?
This is a common concern, but all of these providers follow strict guidance regarding security. It’s very much on the forefront of their operations. That’s not to say nothing will ever happen. Like banking, the providers do everything they can to make the data secure because of strict regulations.
Web-based accounting programs are probably more secure than a desktop program in your office because cloud providers have stronger security surrounding their servers than you do.
Are there certain industries or business sizes where cloud accounting makes more sense?
It really doesn’t. The world is changing with the ability to scale and have add-on packages, going from small to big, or vice versa. You can customize it to where it makes sense for your particular company.
There are some industry requirements that could dictate which application your business uses, but that doesn’t mean you can’t go to a cloud environment. For example, although QuickBooks online today is a vast improvement on older versions, it might not be the best fit for nonprofits that need to do grant reconciliation. Instead, nonprofits could use QuickBooks desktop and place the file with a hosted provider, such as Right Networks, so you have a remote login. That’s why it’s critical for business owners to find the right approach to cloud accounting.
How do employers know how to pick the right program?
Reach out to a trusted adviser who is an expert on the different applications to give good guidance and direction. That person or team can come in and access where you are, while you share with them pain points and discuss where you’d like to be.
They also can help you understand the possibilities. It’s painful to see executives who go to their bank account and pay bills, and then go back to QuickBooks and pay the bills in QuickBooks. They’ve done it twice and there’s no reason for it.
When business owners try to do this by themselves, they often fail. Instead, with the help of experienced and trusted advisers, you can build and set up a system that complements other applications and accomplishes your goals. It’s just not done in a 10-minute phone call.
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