Should I move to a Cloud Bookkeeping and Accounting Software Solution?

There has been significant growth in “cloud-based” bookkeeping and accounting software over the past few years. It was not that long ago that small business owners were trying to understand what the “cloud” meant and if they could trust their confidential financial to an outside provider. However, this is changing with cloud applications on the rise.

MYOB CEO recently said that over 70% of their clients are now choosing one of their cloud accounting solutions (Source: http://www.zdnet.com/xero-launches-volley-in-cloud-accounting-battle-with-myob-7000033995/). Further to this, Forrester Research (https://www.forrester.com/home/), a global research and advisory firm, stated that Australia would rise to the no. 2 market for cloud services consumption with cloud spending set to increase by 300% in 2014. Also, Gartner Inc. (http://www.gartner.com/technology/home.jsp), the world’s leading information technology research and advisory company, predicts that cloud computing will grow 10 times in the next 5 years to $150 billion globally.

Many small business owners are investigating and adopting cloud solutions. While some SMEs are still using hardware-based solutions and even paper-based in some instances, they are increasingly moving online and to the cloud. Even if you are afraid of this new technology or are concerned about the security of your data, the benefits cannot be ignored and include:

. The ability to work remotely on your data file or view your records e.g. record transactions into the system at job sites
. Your bookkeeper, accountant and staff can work on the data file at the same e.g. your bookkeeper can login and fix an error without delay
. IT tasks such as version upgrades and data backup are managed by the application vendor
. Real-time reporting and financial data available – books that are up-to-date can provide more accurate and timely advice
. Automation through bank feeds to ensure that all expenses are captured and claimed
. Store and save documents in the system such as receipts
. The availability of an App – 48% of small business owners think they will spend more time completing business tasks on their mobile devices in the next year with the the largest predicted uptake being “accepting payments” rising from 13% today to 31% and invoicing increasing from 12% today to 26% (Source: http://blog.intuit.com.au/mobileebook/)

On the flip side, some of the concerns in regards to cloud bookkeeping and accounting software are:

. The need for a good internet connection and a culture that accepts less control over your financial data
. If you have industry specific needs such as human resources, CRM or advanced inventory management, the current leading products on the Australian market may not meet your needs
. If you are in the retail or hospitality industry, your Point of Sales (POS) system will need to be integrated with the cloud accounting software
. Cloud services lock you into a paid monthly plan and switching between providers takes time and effort, not just the conversion but also retraining existing users, updating procedures and ensuring that your bookkeeper and accountant can work with the application selected
. Data and user limitations apply so ensure that you select the right product for your business and are clear on the price of this option
. Security although you are probably already using other cloud-based services such as internet banking and Gmail. You need to consider if your financial data is better monitored by a provider who employs experts as this is their core business or whether your data is more secure on your own computer which can be hacked or crash?

In looking at the various bookkeeping solutions available, or if you intend to move to the “cloud”, it is preferable to select the software that best suits your needs and plan to stay with it for several years. It is important to put the time and effort into the selection decision as well as consider what happens when your business grows. For example, look at the features you will require, the number of software users or transactions and select a system that can meet your current and likely future needs.

If you need assistance on a cloud bookkeeping solution, please give Irena’s Bookkeeping a call on 1800 733 497.