The cloud accounting revolution. What it means for you

There is a big change taking place in the accounting software landscape. As in a lot of areas, things are moving away from storage and access on desktop computers (or even manual cashbooks!) and onto the cloud, a hosted internet space where data is stored and processed. This move is happening in many areas like photo and document storage, along with the proliferation of online solutions for every area of human need.

So what are the implications for users of accounting software? On one level the change is not so big as it may first appear. Transactions are entered on accounting software which manages this data in much the same way as traditional desktop applications would have done, producing reports and analysis and storing your data. It is in the area of storage that the key transformation is taking place.

Because the data is held on the cloud, it can be accessed anywhere that there is an internet connection. This can extend to other devices where the developer provides a phone app. This ease of access is a major benefit and enables users to access their accounting system for information or input at a time and place of their choosing.

The other key benefit of online storage is that data is backed up automatically by the provider. Assuming their systems are secure and well managed you don’t have to worry about the task of backing up and securing the storage of your precious data as this will be an automatic part of the service.

Keeping the software updated won’t be a problem either. Every time you log on you’ll have the latest version of the product. Viruses which can attack vulnerable desktop applications are another menace that you won’t have in the cloud, assuming your provider manages this area well.

Cost is another factor to consider. On line providers tend to have transparent ‘pay as you go’ models that charge you at monthly intervals, avoiding the big upfront costs and annual maintenance fees of traditional software products. If you want to walk away, you should be able to download a full audit trail and move your business elsewhere.

Finally, consumers are being given more choice with extended ranges of on line products and non cost trial periods to check things out so you can really test the market and choose the best option for you.

We’ve made number of assumptions about the correct management that the provider will deliver in this article. You should think carefully before moving to an on line accountancy solution as this is likely to be a long term relationship with people who will be handling your sensitive financial data.

If you do plan to migrate to the cloud, and that would appear to be the way things are going, make sure you trust the people behind the organisation taking your credit card details. Make the right choice and you will have a more flexible and accessible tool that should result in a significant reduction in your administrative hassle factor.