The Value of Cloud-Based Accounting
By: Tracey Martin
Sharing information in real time among team members and outside advisors, including your CPA, is just one of many advantages of maintaining your accounting data on the cloud. You don’t have to give up the software features and files you’re accustomed to, but the days of sending your CPA a QuickBooks file at the end of the month – or having to log off so another member of your team can log on – are over with cloud-based software.
In addition to easier collaboration and immediate access, cloud-based accounting allows mobility. With a growing number of remote workers, data that can be securely accessed through smartphones and other mobile devices from any location is a practical necessity. You can review a file, reconcile an account, or share information with a team member from virtually anywhere.
As a cost benefit, data stored in the cloud rather than on the company’s server require less on-site hardware and networking equipment. Updates are managed by the software company rather than your IT staff. Although the initial cost or monthly fee may be higher, equipment savings and increased productivity typically make cloud-based software more cost effective than desktop software. The IT company Bitglass surveyed CIOs and IT leaders pre-pandemic, and more than half reported a net cost savings as a result of using cloud-based applications. That percentage has likely grown.
Users always want to know: Is the data secure? Cloud-based software vendors assume this responsibility and have fulltime resources to update cyber security. Your internal IT staff, meanwhile, must juggle competing demands, such as system maintenance, troubleshooting, and hardware issues. In the event of an emergency interruption, such as a natural disaster or power outage, software vendors can recover data quickly. Many user companies don’t have the same data recovery built into their internal systems.
Two things to keep in mind before you make the switch: You need a reliable internet connection to access the cloud, and your service provider will schedule downtime for maintenance on occasion, but typically overnight or on weekends when volume is low.
Transitioning from desktop to cloud-based with the same software vendor is seamless. For example, when moving from QuickBooks Desktop to QuickBooks Online, all data and history is imported into the cloud, and you have immediate access to your data. (QuickBooks, Xero, and Sage Intacct are popular cloud-based accounting software options.) Of course, if you are changing software providers at the same time, the process could take longer, and comparative reports may not be available during the first year.
If you’re still undecided about a move to the cloud, be aware that software vendors are nudging you in that direction by discontinuing desktop versions or limiting support for older versions. QuickBooks, for example, announced it would discontinue all versions of desktop services for customers in the UK as of June 30, 2023. Since the company took this step in the UK, it’s reasonable to expect a future solely in the cloud for US customers, too.
To learn more about this topic, please contact Tracey Flynn Martin, CPA, Partner, at (336) 232-4492 or tmartin@brccpa.com
Tracey Flynn Martin Partner, CPA
Tracey has over 30 years of experience as a CPA and is a tax and consulting partner in our Wilmington office. She applies her knowledge and practical ideas to meet the needs of firm clients from both a business and tax perspective. Tracey leads our Firm’s CAS service line (Client Accounting Solutions – a […]
The information contained in this article is for informative purposes only and should not be relied on when making any business, legal, or other decisions. This information may be updated without notice and/or may not contain the most current information that is available related to this topic. Please consult with your advisor to determine how this information applies to your specific facts and circumstances.