Cloud accounting

At Riley, we have always been enthusiastic adopters of both IT hardware and software and particularly cloud based software. We’ve blogged about it, been interviewed about it and debated it, we’ve also┬ápublicised our adoption of cloud services with Google but we should also talk more about bookkeeping and accounting on “the cloud”.

We have reviewed a large number of cloud-based accounting packages and have a substantial number of our customers as an installed user base on a variety of packages. In this section we will also set out some of the packages we use but firstly we should explain some of the advantages and opportunities provided by migrating your accounting and bookkeeping to the cloud.

So what is the cloud? According to Wikipedia, “Cloud computing is┬áInternet-based┬ácomputing, whereby shared resources, software, and information are provided to┬ácomputers┬áand other devices on demand, like the┬áelectricity grid.” So, instead of having software resident on the computer or server in your office, you access software through your internet connection – “Simples” as┬áAleksandr Orlov would say. Wow, is that all the difference and if so, why the big fuss?

Well, accounting software had been dominated by a small number of big players with huge installed user-bases. This meant that protectionism was rife, marketing huge and development of the packages relatively slow. The advent of a reliable internet service for many business users around the world and the widespread adoption of the internet as an easy to use service which gave flexibility and “knowledge” access to nearly all meant that a paradigm shift was possible.┬áDevelopers are now able to modify, enhance and roll-out improvements to software almost overnight. No more waiting for a CD to arrive in the post only to find that there is a bug in the software. No more “upgrade path”, unsupported versions or software risk.

In our experience the main advantages to users are as follows:

  • Back-up – we’ve lost count of the number of customers who have lost accounting data, forgotten to back-up their accounting entries, suffered corruptions, broken PC’s and consequently been adversely affected by not having a working back-up. The fact that data is saved off-site and should be carefully controlled by the vendor company, mirrored and subject to a number of layers of safety redundancy.
  • Visibility – a user can access accounting data, enter transactions and view reports from their PC, smart-phone and the internet cafe in┬áKazakhstan whenever they want.
  • Accessibility – instead of sending usb sticks through the post, e-mailing back-ups and copying data onto a CD to allow their accountant or other professional to access data, the system allows any authorised user, anywhere to see what is going on.
  • Automation – many cloud based systems allow the import of bank and credit card statements – as part of the process, entries can be tagged so that they are posted correctly within the system. Once tagged this becomes an automated process so that you don’t have to do it again. The further you take this idea the more likely it is that you can see the drudgery of day to day bookkeeping being removed by software automation. You may want to read about that here.
  • Improvement – cloud vendors accept suggestions as would any software provider. However, as there is a team of developers constantly working on agreed improvements/enhancements to the software and the software resides in one central server rather than on thousands of individual PC’s or networks, enhancements are made to the system as they are written and tested rather than once or twice a year. Software enhancement is therefore much quicker and able to be responsive to opportunities provided by other vendors.riley profile
  • Easy in, easy out – whilst we would not recommend changing your software provider constantly, most cloud based accounting software allows you to start or stop on a monthly basis – you are charged only when you are a user. There’s no annual support contract, no barrier to questions and nothing (apart from your energy and desire) stopping you exporting your data from one package and starting in an other .
  • Hunger – as growing businesses, cloud vendors are desperate for your ┬ábusiness. They are open, modern, keen to develop and enhance their product and appear to us to be much more focused on the end-user and their experience – that, as they is a refreshing change!
  • Cheaper, faster (and more reliable?)

Potential disadvantages of moving to a cloud based system:

  • Data security – cloud vendors say that data is secure but there have been a few cases of data loss. Perhaps that’s not surprising as vendors sort out their systems and competition knocks out those who don’t take security seriously. Data can normally be downloaded to your own machine and backed-up if required but that’s not normally why you would use the cloud. Having said all that, the incidence of data loss is low, lower than our experience of PC back-up systems, but then any loss of data is serious.
  • Access – As with any computer system, you have to be aware of software security. All systems that we have used are running under https security and are therefore encrypted. Caring for your access codes and ensuring that no-one knows passwords is important on all systems. we are always amazed that so many individuals are taken in by the spam e-mails asking for bank passwords and the like – obviously if you give anything like this away, your data may be hacked.
  • Speed – cloud computing isn’t for the broadband impaired! If your connection is slow, constantly drops out or is significantly flakey, cloud based applications are potentially more risky than software which is resident on your own machine or network.

Once you are on one of the cloud based packages you may need help on a particular entry, find you’re good at entering sales invoices but terrible at allocating receipts, ┬áknow you’ve entered all the payment and receipts from your bank account but you’re aware that you haven’t quite got the hang of the bank reconciliation process, perhaps you hate finalising the VAT return (and who doesn’t?) or you’re just going to be away on holiday and want the records kept up to date. The Riley team can help you with any of these problems.

So if you would like to see the improvements you can make to your accounting records by moving to a cloud based package, please give Jon (01752 203647), Val (01752 203652), Sue (01752 203657) or Mel (01752 203653) a ring.

Riley Chartered Accountants
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