Recently I attended the QuickBooks Connect Conference in San Jose, California.
As you might expect there were a variety of speakers, presentations, workshops, and other interesting events, but if there is one message that rang loud and clear, this is it …
Cloud computing generally, and cloud accounting software specifically, is THE future.
Before I talk about the benefits of cloud software, some definitions should be clear in case they aren’t already.

What is cloud computing?

First, it’s not really a cloud. It’s the use of computer hardware and software applications delivered as a service over the Internet. That’s where the “cloud” part comes in.
Using many different devices and from many different locations, it allows you to store files and use applications in a simple way. If you’ve used Internet banking before, you are probably familiar with this type of service.
There are a number of different ways that the Internet infrastructure can be used to provide services including accessing applications using a web browser. Applications delivered this way are sometimes referred to as “Software as a Service”, or SaaS for short.

What is cloud accounting?

Cloud accounting is sometimes referred to as online accounting or remote accounting.
Working essentially the same way as accounting software that you would install on your computer, cloud software runs on computer servers, hosted by a service provider and is accessed over the Internet.
Your data is securely stored and processed on the host servers or “in the cloud”. With a cloud service you are able to access your financial data from anywhere and using any device, as long as you are connected to the Internet.

The problems with traditional accounting software

• Typically, financial data in a company’s system isn’t up-to-date and neither is the software. And it can be expensive and time-consuming to upgrade the software taking you away from other core business activities.
• It also only works on one computer and data most be moved from place to place, for example, on a USB drive. This is neither secure nor very reliable. For example, your bookkeeper takes your database home on a USB stick to make some entries. You are unaware of this and make some entries at the office. Your bookkeeper returns updates the database from her USB stick and over writes all of your entries. This happens all too often and sometimes it is weeks before this error is discovered. Not very efficient.
• Only one person has user access at any given time, so key people can’t access financial and customer details.  And when it comes time to upgrade the software, it can be expensive, difficult to do and time-consuming. Customer support can often be expensive and slow.

And if any backups are done at all, (which usually they are not…when is the last time you did a backup?) they too can be costly and difficult to do.

The benefits of cloud accounting

• Being able to connect to your data anytime/anyplace and have a clear overview of your current financial position in real-time
• Team collaboration easier with multi-user access to information leading to less back and forth and real time collaboration
• Updates and maintenance handled by service provider – more time to spend on your core business activities
• All data online – nothing to install and automatic backups, free updates instantly available
• One active database – everyone working on the same data in real time with nobody over writing someone else’s entries.
• Upfront business costs reduced – version upgrades, maintenance, system administration costs and server failures managed by the cloud service provider

I truly think if you want your business to work smarter and faster, cloud accounting software is a smart investment.  Overall, using a cloud based system will give you a better overview of your finances and help improve working together with your team.
What have been your experiences with cloud based software if any? We have been using the cloud to do our client’s bookkeeping since long before it was popular. If you have a question about “Cloud Accounting” please give us a call we always look forward to and enjoy your comments.