The importance of cloud accounting cannot be discussed without first of all briefly discussing what cloud accounting is. Cloud accounting is one of the numerous business models of the SAAS (software-as-a-service) business models where vendors provides their clients access to all the features that they need in their accounting department. The idea is to move all the hassles of in-house accounting functions to a third party that specialises in delivering such services.
The client securely transfers raw data to the cloud vendor who then processes the data in order to produce the desired output as per the contractual agreement.
USES AND BENEFITS OF DEPLOYING CLOUD ACCOUNTING
Cloud accounting has both financial and non financial benefits that can accrue to a company if rightly deployed. This section of the article is dedicated to discussing the importance of cloud accounting which is by the way the main focus of this post. Sit back and enjoy the rest of the article- probably with a glass of wine like I do each time I am reading interesting stuff like this.
One of the benefits of cloud accounting is that by outsourcing accounting functions to cloud accounting vendors, a business can free up sizable amount of time. This freed time would then be channeled into other productive activities. Customized information that aids decision making can easily be downloaded from the server of the SAAS provider.
The costs that are saved by engaging the service of online accounting firm include; cost of updating traditional accounting software, cost of training your staff members on how to use accounting software (stand alone or Enterprise version). The figure become even bigger when you factor in the salaries of accounting departments that is maintained in house.
The level of motivation that your staff members will be working at will be different if they know that they can get financial data that is needed for speedy decision. The proliferation of high-tech mobile computing devices has made it possible for managers to perform their managerial functions from the comfort of their homes. The one serious issue here is the security of end point mobile computing. As part of the organizational policy, robust IAM (Identity Access Management) should be able to address this issue.
SCALABLE, FLEXIBLE AND ROBUST
One of the things I love most about using cloud accounting is that you have the choice of picking the features that you like to meet your unique requirements. This also helps you control overall running costs as you would not be charged for full range of package if you simply have little functionality selected.
CAN BE ACCESSED REMOTELY TO MAKE BUSINESS DECISION ON THE GO
You don’t have to be in the office to access your accounting information for strategic planning and decision making. All you need is an acceptable device to help you connect to the network.
COMPLIES TO REGULATIONS
You needn’t worry about keeping an eye on the latest regulatory requirement if you can trust the service you get from your cloud vendor. By default, providers of online accounting service should be abreast with the legal and regulatory landscape so as to deliver up-to-date accounting service to their clients. However, there are very many so called online accounting brokers that your small in-house accounting team might even have more knowledge of the regulatory framework.
We all clamour for greener business operations. This is one of the answers to the call of helping protect our environment. By housing many tenants on the virtualised servers, cloud accounting vendors help reduce the increasing pollution and high demand on energy.
CAVEAT OF IMPLEMENTING CLOUD ACCOUNTING
The major issue with cloud computing which cloud accounting falls under has to deal with security. By security, I mean: dealing with the confidentiality, integrity and availability of the accounting information assets. It is the responsibility of the clients to guarantee the CIA (confidentiality, integrity and availability) of the data that are moved to the cloud.
This is to say that the IAM (Identity Access Management) burden of the accounting information that is moved to the cloud still rests on the shoulders of responsible managers.
Another security issue that needs to be addressed is how to revoke the access of an employee that has left the county? Do we have an automated system that automatically disables remote access of an employee whenever our systems indicate that they are no longer with us?
This above caveat makes it obvious that cloud accounting shoppers really need to do their homework before signing a cloud accounting contract. This perfectly leads us to an aspect of cloud accounting that needs to be touched in this article.
HOW TO SELECT CLOUD ACCOUNTING VENDOR
Due diligence is the key issue is selecting the right vendor to host your cloud accounting. The major issues to be concerned about are briefly talked about below.
COMPLIANCE: make sure that the cloud accounting vendor that you which to trust your financial and accounting data with is in compliance with some of the most widely deployed data protection standards. For example, a cloud accounting vendor that does not compliance with the PCI SSD 2.0 as a security baseline would probably expose your organization to unwanted high risks.
SECURITY ARCHITECTURE OF THE VENDOR: you need to be sure of the level of security infrastructure deployed by the potential online accounting company you intend to contract. Engage the service of an IT Security Auditor to provide you with professional report on the level of security that the company employs.
CUSTOMER DATABASE: as for the list of their existing customers. Once you get this, randomly select some to get feedback from to see how satisfied they are with the level of service they are getting from the cloud accounting company you wish to subscribe to.
You don’t need an adviser to tell you to turn your back on any internet accounting company that fails to provide this list to you. Some might deny you this request on the grounds of privacy laws but that is the catch- good cloud accounting company should be able to include a clause that allows it to release their clients name to potential customers.
GEOGRAPHICAL LOCATION OF THE VENDOR: accounting and business operations including taxation are country specific. This is to say that the country where the vendor you wish to choose operates from can affect the quality of service that is rendered to you. Though the international convergence of accounting standards is working hard to reasonably reduce this kind of problem, but, it still exists.
A cloud accounting provider is based in Canada for instance would have some problem meeting the local accounting needs of a small business that is based in Germany or South Africa.
Virtualization of accounting department is made possible by cloud accounting companies. You need to subscribe to one today in order to allow your business leverage on the importance of accounting software that is based in the cloud.
Oladele Jonah says
NEW INNOVATION WITHIN ACCOUNTING PROFESSION.