Should You or Shouldn’t You? The dilemma about putting your accounts in the cloud

I know you’ve heard some of this before but it’s important. If businesses, and their accountant and lawyers (and other advisers) don’t grasp this opportunity, they’ll be left behind. Businesses of all kinds are storing content and data and accessing software applications via the global network of computer servers known as the “cloud“. IT analysts Gartner recently predicted that the total value of cloud-based systems would reach $210bn a year by 2016.

Safety is a big issue for everyone. So, just how safe is it to post your financial data to a server that is owned, maintained and secured by someone else, somewhere else? This was asked in an article by Ezri Carlebach on Guardian Business Network, here.

Mr Carlebach says that most of us are happily conducting day-to-day banking over the internet and, as Daniel Rissen of chartered accountants businessorchard.com points out, “the security issues are the same as with locally hosted systems – unless your business doesn’t have an internet connection. Any system can be hacked and it’s always wise to take proper precautions.”

Some tips Mr Carlebach offers are:

• carry out due diligence on potential providers and assessing their openness about the issues.
• check standard terms and conditions and find out what, if any, service level agreements are on offer.
• Are there user forums for the product you’re considering – you’ll want to check reputations of cloud providers through testimonials and online ratings.
• Ask pertinent questions about how your data is separated from that of other businesses on the same servers.
• What would happen to your data if the cloud company went bust or is sold.
• Where is the physical location of the cloud provider because that may affect data protection requirements.

Once you’re satisfied with security, the benefits are apparent. The ability to manage your finances any time or the day or night, anywhere, from pretty much any web-enabled device offers greater control over your time and significant cost savings.

But don’t get too excited:  paying a monthly subscription to a cloud-based system may not remove the need for your friendly and affordable accountant, whether on or off site, to help you get the most from the product. Daniel Rissen (see above) recommends specific cloud-based systems to clients and works with them throughout the year, including providing training.  “We can log in at the same time as our clients to streamline accountancy services, working together on everything from bank reconciliation to VAT returns,” he says. “This simplifies the end-of-year process too, saving time and therefore money.”

Some providers, such as QuickBooks and NetSuite, will offer a free trial or demo, so you can try before you buy. Where you have accounting software, you can be sure that Sage are there. Indeed they are – with Sage One, Sage’s online accounts and payroll product.

According to Dr Gerhard Kristandl, senior lecturer in management accounting at the University of Greenwich Business School, “cloud technology is an enabling technology – it should not govern how you do your business, but it should support your business”.

Kristandl and his colleagues are researching the impact of cloud systems on the role of the management accountant. They recently conducted an online survey with Irish companies that found that managers who have access to anytime, anywhere financial information tended to circumvent the accountant in decision-making processes. Try to follow what they’re doing if you want to get into the world of accounting and financial data in the cloud. Iris, the popular UK software company is now a leading provider of cloud services to the UK accountancy & payroll sectors.

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Martin Pollins

Managing Director at One Smart Place

Martin Pollins is a Chartered Accountant and MBA with wide experience in corporate finance and business management. He has served on the boards of several companies, including those listed on the London Stock Exchange, AIM and OFEX. He is Chairman and Founder of OneSmartPlace and was a Council member of the Institute of Chartered Accountants in England and Wales from 1988 to 1996. He was managing partner of PRB Martin Pollins, based in Sussex, the first Accountancy firm to advertise on British television.He went on to create and launch the CharterGroup Partnership (the UK’s first Accountancy network) and then LawGroup UK (at the time, one of the largest networks of lawyers in the UK). In recent years, he helped to raise several £millions to fund British films such as The Da Vinci Code, Bridge of San Luis Rey, Head in the Clouds and Merchant of Venice with actors such as Charlize Theron, Robert De Niro, Al Pacino, F. Murray Abraham. Kathy Bates, Gabriel Byrne, Geraldine Chaplin, Tom Hanks, Ian McKellen, Audrey Tautou, Penélope Cruz, Steven Berkoff, Lynn Collins, Jeremy Irons, Joseph Fiennes and many more.

He has written over 700 business publications (see Glossaries at https://onesmartplace.com/resources/glossaries/) and is editor of Better Business Focus (see https://onesmartplace.com/resources/better-business-focus-magazine). His Blog, on a wide range of subjects can be found at: https://onesmartplace.com/blog/

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