IS CLOUD ACCOUNTING THE WAY TO GO IN 2019?

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Whenever you use online accounting software, you’re virtually “working in the cloud”

By Victor Bett

Cloud computing is nothing new to most people. In this era of the internet, chances are you’ve engaged in one or more forms of cloud computing. In its simplest, cloud computing is the storage of information on virtual servers as opposed to using a computer or a storage device. Google Drive and Dropbox are some of the common examples of cloud computing tools. And so are online accounting applications.

Each time you use online accounting software, you’re virtually “working in the cloud”. So, whether you prefer cloud computing for flexibility purposes, streamlining workflow, or to simply improve collaboration, a lot of gains can be derived from it. Individuals and businesses rely on cloud accounting tools to boost accountability, efficiency, and effectiveness.

As at now, this mode of recording information has been adopted across all sectors, from banking to manufacturing to hospitality and so on. Today, courtesy of cloud accounting, you can access your bank statement from the comfort of your living room. But that’s not all – in a moment, you will learn some of the key benefits, as well as drawbacks of cloud accounting.

However, before that, here are some of the problems that can be attributed to conventional accounting applications Problems of Desktop/ Offline Accounting Applications

Problems of Desktop/Offline Accounting Applications These traditional systems are susceptible to serious data security threats. Information is mostly transferred using hard drives and USB drives. Anyone who gains access to such storage devices can easily infiltrate company information. • Desktop accounting applications are mostly accessed by single or a few users at a time. This brings about access constraints, a problem that can easily be avoided when using online systems. • Data stored in computer applications can easily be distorted by anyone who gains access to the machine. It, therefore, makes it simple to tamper with the integrity of such information. • Software upgrades are also common causes of disruptions when working on offline software. Some upgrades have been known to take a whole day, meaning the system may remain under maintenance for the better part of business hours. • If you’ve ever tried seeking customer support on desktop applications, you know too well how tedious it could get. It may take you time to identify valid contact information especially if the software version is old. But with an online tool, the Help button is almost always visible from any menu. Most cloud-based applications have live chats, direct emails, as well as phone numbers for faster communication. Unfortunately, this is almost never the case with their desktop counterparts.

The list goes on and on, but next, I’ll tell you why you need to be a part of the cloud accounting community today.

Why Cloud Accounting? Convenience If you think of it – cloud computing and cloud accounting are a perfect match. Whether you own 10 or more companies in different parts of the world, you can easily gain access to daily, weekly, monthly, quarterly, or even yearly reports from anywhere, using any internet enabled device. Gone are the days when you’d require to physically step into the office to access your business records. With cloud accounting, all key reports can be accessed from a single dashboard. And if you’re working with a part-time or distant accountant, you can conveniently collaborate with them without having to send files back and forth. Information Security Organizations value the security of their data, and online accounting tools help you do much more than setting LONG passwords for your computer. In the wake on increased cybercrimes, passwords and office padlocks might not be the best solutions after all. Cloud-based platforms are known to be the main targets for hackers and all manner of internet burglars. But it is for this reason that online tools continue to put in place very stringent measures to safeguard the data of their users. Other than setting strong passwords, most of these platforms have a special security feature known as a Two-factor Authentication. Now, what this feature does is that it allows you to connect your mobile device to your application account, and every time you sign in, you’ll be required to use both your login details and another verification using your phone. That means that for anyone to gain access to your accounting information, they’d have to steal your password and your phone. You’ll agree with me that that’s going to be a lot of trouble for anyone looking to gain access to your files. Lifetime Storage of Data In this digital era, the last thing you want is to end up storing your data in a pile of hard files. How long do you think files and papers can maintain their shapes? And what about the ink in the papers? As thorough as bank printers are, the details in the slips never last more than a few years if kept well, before fading away. This is why storing your files online offers you the best chance of maintaining dozens of files for centuries to come. The best thing about cloud storage is that your offline data is always backed up somewhere online in case something happens to your computer. So, whether you wish to retrieve files relating to fifty years ago or yesterday, all you’d need to do is “ask”. Affordability One of the main objectives of businesses is to keep costs at bay while pushing the revenues up. However, what many might not know is the cost of maintaining a desktop accounting application vis-à-vis using an online one. Let’s break down a few costs just to paint a picture of the situation. For fairness, we’ll use the same parameters to compare the cost of the two options – a desktop and a cloud accounting application. Categories of costs for desktop accounting software • Software purchase costs (Yes) • Set up costs (yes) • Maintenance costs (Yes) • License renewal upon expiry (Yes, for some) • Downtime (Very Common) Category of costs for cloud accounting software • Software purchase costs (No) • Set up costs (No) • Maintenance costs (No) • License renewal upon expiry (Monthly or yearly subscriptions) • Downtime (Very Rare) So, which way for you? I’ll leave you to it! Other than the above-mentioned benefits of cloud-based applications for accounting, there are a few cons to going the cloud way. Drawbacks of Cloud Accounting Accessibility Issues: Cloud accounting is limited to devices and locations with internet access. Although most parts of the world have full internet coverages, still, there are segments with either erratic or no internet access.

Therefore, people in affected areas might not find this mode of accounting that suitable. Insecurity: Each year companies set aside millions to budget for cybersecurity. The online space is under attack every minute that goes by. Unless a firm invests in sound security controls, hackers and attackers can easily manipulate or steal crucial company information.

Conclusion

There are a number of reliable cloud accounting applications including QuickBooks Online, Sage One, Xero, Wave Accounting, among others. As an accountant or a business owner, these applications offer you a high-level of flexibility – so, whether you’re at work, home, or on the go, cloud accounting applications have you covered. Meaning? You can sleep easy knowing that you have a full picture of the business operations. victorbett28@gmail.com

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