It’s all in the cloud! (apparently…)

(22 /10 /2014)

The Cloud…to be honest, I’m still a little bit scared by the concept.  I mean, what is it?  Where does the information actually go?  Who can access it?  How can I use it?  Am I already using it?  The answer to this last question is yes!  If you have a Hotmail or Gmail account for example, then you’ve been using the cloud for some time, and apart from the odd time I’ve had to deal with one of my email accounts being hacked, the cloud has been working pretty well.  And recently, more and more business processes have been taking place in the cloud rather than on every physical computer in every office around the country.

Cloud accounting is simply using the internet to access accounting software rather than storing it on a local computer.  It was developed to help streamline small business and make accounting easier for business owners.  There are many brands on the market including Xero, MYOB, QuickBooks Online, Wave and Kashoo.  They’re all pretty similar and have been developed specifically for small business that generally have simple accounting requirements.  Using this software however, does mean that all your accounts and information are stored on a remote server and not on your desktop computer.

There are obviously a number of benefits of using cloud accounting.  Firstly, because you don’t have the software stored on your computer, you therefore save on computer storage space and are not required to manage the data nor maintain expensive computer hardware – your much-loved Dell laptop is perfectly fine for the job!  And because the data is not stored locally, provided you have a modem and internet access, you can access and update your accounts from any computer, anywhere in the world – imagine submitting your BAS statement from a Hawaiian beach or sending out an invoice from atop the Eiffel Tower?  Another key advantage is that only one ledger is kept in the cloud which improves accuracy and minimises errors at BAS and tax time.  You also have the ability to interact with your accountant in real time rather than sending today’s file to your accountant which becomes obsolete by tomorrow.  And you will also save cash!  No more paying for software and the subsequent updates and annual subscription fees – to use the cloud, you pay a monthly access fee and there’s no more tearing your hair out trying to update software on your computer as software updates occur automatically in the cloud.

It almost sounds too good to be true!  As with all technology, there are a number of things to consider before you ditch the QuickBooks and jump into the cloud.  A key concern for most people and certainly for me, is security.  Basically, any system that has internet access can be hacked – we’ve certainly heard many stories recently about compromising celebrity photos that have been stolen from the cloud.  And while the accounts of a small hospitality business may not command the same price tag as the aforementioned photos, before using cloud accounting it is important to assess the provider.  Key things to consider include the location of the provider as this may have implications for data protection requirements; regulatory compliance policies; privileged user access and who can access information; data recovery and separation; investigative support; and long-term viability of the company and what would happen to your data should the company go belly-up.

So how do you get yourself into the cloud?  It’s a simple matter of considering the various packages, doing your due diligence on the providers and working out what would work best for you and your business.  If this seems too onerous, talk to your business adviser or accountant; jump online and connect with people or businesses through social media to see what they recommend; or talk to your local café owner for example, for a recommendation.  Whatever you decide, cloud accounting certainly has its advantages and is very much here to stay – don’t be scared of it, embrace it, use it to streamline your business.  And that cash you save by not buying accounting software or spending on an over-priced accountant could be spent on that Hawaiian beach holiday!

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