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Cloud-Based Accounting… Is It Right For You?

It’s no surprise more and more business processes are migrating to cloud-based systems – including accounts, from invoicing to payroll. So the question is then asked, is this something you should be thinking about for your own business? Let’s take a look at a few pros and cons which may help you make that informed decision.

Floating On A Cloud
Most of us wouldn’t know what to do without the convenience of online banking… having the ability to know our financial temperature at a moment’s notice is quite liberating!! No longer do we have to take pencil to paper to track our spending down to that very last penny. Now, all we have to do is look to our mobile devices to know if we can buy that latest movie on iTunes. Not only that, but we can also pay any bill or send money to a friend in need simply by a few clicks on our phone.

According to Google, 61% of internet users are using online banking to manage their own personal finances and this trend is growing by the millions each year. With people becoming more comfortable online, it only makes sense that this trend would extend to the business sphere as well. Taking care of business accounting needs in the online world not only saves time but it simplifies accounting systems as well, making sure that every step is completed the same way every time.

It’s also a great collaborative tool which lets you work, in tandem, with your financial professional to ensure that all of the business financial records are in one location and well organized.

Finally, with technology changing at supersonic speed, having your accounting in an online account will ensure that you have the latest and greatest version of that accounting software at a lower monthly expense rather than trying to pay the full purchase price up front.

Stormy Clouds On The Horizon
With all of the positive buzz on cloud-based accounting, it wouldn’t be good business practice if we didn’t look at some of the reasons why you may not want to migrate all of your business accounts to an online account.   First of all, with the convenience and speed of moving around your own money… in the business world, you must consider your client needs first. Therefore any hasty decision could have dire consequences for both your clients and ultimately for your organization. Having a well thought out plan of action needs to be in place to prevent putting your horse before the cart.

The next thing to consider is that of online security. Before signing up with any service, you will need to read all of the fine print by checking the terms and conditions and finding out what service level agreements there are. Be sure to ask important questions like “How is your data separated from that of other businesses on the same servers – and what would happen to your data if that company goes out of business?”

And finally, we’ve all seen what happened to companies like Target and JP Morgan when their data was breached… face it, with this very real threat … you have to take a serious look at the risk for your own customer base because as your risk goes up, so does the possibility of a lawsuit. Striking a balance between the ease of access and sharing of information or completely lock-boxing your security to avoid problems is a very fine line that we all must face.

Partly Cloudy With Blue Skies
The good news is that this doesn’t have to be an all or nothing proposition. Whether you want to leap head first, into the clouds or simply enjoy it one cloud at a time, do what feels right for you and keep in mind these good business practices:

  • If your business has have an internet connection, make sure that you are operating behind a firewall and that your virus software is up-to-date.
  • There needs to be clear protocol in place so that decision makers take proper measure to not make a wrong decision
  • Have a contingency plan in place for any interruption in your internet, electricity or other extreme events that are beyond your control.

Even if your accounting processes are not online, they could still be at risk because most likely, you do have an internet connection (what business doesn’t) and since any system can be hacked then your accounting processes are vulnerable. It’s always wise to take proper precautions by consulting with an accounting professional who can help guide you through the murky waters of cloud-based accounting and at MJB’s Bookkeeping Solutions, we have the resources for putting the pieces together for your balanced bookkeeping solution.