What is "Cloud Accounting"?
I think most people have heard about Cloud Accounting, or at least have heard the term "in the cloud". But what does it actually mean?
Quite simply, when someone refers to storing data "in the cloud", it means rather than storing your data on a local computer, the good old PC or MAC, your data gets stored on remote server that you access via the internet.
In accounting and bookkeeping terms this means that you no longer need to install a desktop version of your bookkeeping/accounting software, all you need now is a web browser such as google chrome and your login details to access your files on the relevant provider's homepage.
Most of us will remember the yearly or even quarterly update disks sent out by MYOB, Quickbooks or whatever other software you were or still are using.
But for a number of years now, most of the traditional accounting and bookkeeping software providers have reinvented their products and have started to push customers towards signing up for their "cloud accounting" solutions.
Xero, Quickbooks Online, MYOB online accounting, Saasu, just to name a few, all provide very similar offerings: full double entry ledger supporting invoicing and bills, automatic bank data feeds from an increasingly large number of financial institutions, payroll, superannuation clearing, multi currency, expense claims, employee logins and control of access for each user, an ever growing number of report options to help you analyze your data in real time, live collaboration with other users within your organization as well as external advisors such as your accountant/tax agent.
In addition, most online accounting providers heavily advertise that their software can be integrated with countless "apps" & "add-ons" specific to the industry you are working in, for example inventory, POS (Point of Sale), Payments, Workflow management & CRM. All on one simple to manage platform, no more multiple databases for each specific task you need to do in your day to day schedule.
What about data security?
All the major players in the game state that your data is protected in the same manner as banks secure your data when you conduct internet banking. Of course being "in the cloud" means that the provider's data servers could be located anywhere on the globe, and most have duplicate servers in multiple locations to provide a fail safe environment.
In addition most provide multiple layers of login security such as two step authentication which means in addition to needing your username and password, one time codes are fast becoming the norm. And this is something that is actually becoming compulsory for all accounting firms who have access to their client's online data files. Every input and transaction created in the data file can be traced to the relevant user, time and location, as part of the full audit trail that is available in most of the online accounting systems.
What about updates?
As mentioned earlier, tedious was the process of updating each desktop installation of an accounting system with new tax rates, system updates etc, this became even more of a nightmare if you had a lot of staff and each workstation required updating, a very costly and time consuming exercise.
All that is a thing of the past as the online accounting solutions are updated directly to your online platform, most of the time you don't even notice other that receiving a notification that and update has been implemented and/or functions added/improved/removed.
How to I get started?
Pretty much all providers offer a free trial, mostly 30 days, with full functionality to allow you to really get a feel for the program. After that most will require you to sign up to a monthly plan, ie a set fee per month, usually per data file, with no set contract term, and generally depending on either the number of staff you employ and/or users.
Many providers will offer a "conversion service", essentially a service that converts your existing data file into their specific format, so you can import all your contacts, chart of account, inventory items, even transaction data etc.
When if comes to leaving an online accounting solutions, most of them differ from each other, some will allow you to download a full backup file, others will only let you export reports, CRM data etc.
G Henderson & Co is a Certified Silver Partner with Xero as well as Quickbooks Online ProAdvisors and MYOB Online Essentials Professional Partners. We can assist in the setup of almost any online accounting solutions. Give us a call or email us today to inquire!
Hope you enjoyed reading this article, let me know if the comments what you think and if you have any topics you would like us to cover.