Everyone seems to be talking about “The Cloud” these days!  Just a few years back, I didn’t dare use that term around a client; business owners were downright afraid of internet-based accounting.  The common misconception was that The Cloud wasn’t secure enough to host financial data, so data was best kept on a local drive at the company’s place of business. 

A lot has changed in a short amount of time.  I’d like to think the change of heart centers around the additional security and reliability cloud computing provides, but the real reason is simple: people are on-the-go, and they want their data and applications available when and where they need them.

“Cloud accounting” is a term used to describe the use of online applications to address a company’s accounting needs.  There are typically 3 components to a cloud accounting system:

1. Accounting Software – I use QuickBooks in my practice, but virtually any accounting software out there can be hosted in the cloud.
2. Document Management Software (commonly referred to as DMS software) –DMS software comes in many forms, but any good DMS stores digital images of source documents in a secure, offsite location.
3. Client Portal – The client portal is a company’s gateway to the information stored in the cloud.  It provides business owners secure, online, and self-service access to their information.

Companies are rapidly adopting cloud accounting because of the benefits it provides.

The Cloud lowers accounting costs.  Employees are expensive, work stations are expensive, and finding a good, part-time, on-site CFO or bookkeeper is about as easy as finding a four leaf clover.  Cloud accounting has given small and medium sized business owners access to more sophisticated accounting assistance and more affordable bookkeeping services at the same time. 

The Cloud increases your access to accounting expertise.  When an accounting advisor has 24/7 access to a company’s accounting data, he/she can quickly identify and fix problems that may have otherwise impacted productivity or profitability.  Remote training is also more successful when companies collaborate in the cloud. 

The Cloud ensures that your accounting records are kept current.  Accountants working in the cloud usually make a concerted effort to retrieve all needed documents from their clients.  This is partly an effort to personalize an online relationship, and partly an effort to keep the billable work coming in. However, the situation is a win-win, because companies can better respond to unexpected situations when the books are accurate and current.

The Cloud enables collaboration from multiple locations.  Data, accounts, and applications can be accessed from anywhere with an Internet connection.  Whether you run a fleet of catering trucks, or good help is just hard to find in your local area, the cloud is a way to bring people and data together.

The Cloud minimizes IT expenses and hassles.  Programs hosted in the Cloud are maintained and updated by the host, so there is no more need to perform or pay for software updates and server maintenance.  Of course, you’ll want to keep your office computer healthy and secure, but working in the cloud means your local computer is mainly used to access the internet.   

Almost any one of these points is reason enough to consider cloud accounting for your business.  Microsoft, Apple, Intuit, and other large players in the business world are investing in cloud computing.  Your company should be next.