Intro to Cloud Accounting Software

You can’t be too careful about cybersecurity these days. If some of your business’s major enterprise applications are stored in the cloud, security is exceedingly important. A hot choice among freelancers and businesses of all sizes is cloud-based accounting software. It combines features that make it a no-brainer for growing businesses with distributed workforces. It offers ease of access across multiple devices and for multiple users. This is complemented by the ease of scalability.

Keeping data in the cloud (as opposed to on-site) eradicates the chance of any localized risks. However, it can expose you to some global ones. With more and more cyber attacks happening every year, you might be hesitant to shift company data to the cloud.  After all, putting your sensitive information out there in the open can be a scary step.

So, is the luxury of owning business accounting software that’s cloud-based worth it? Is it worth endangering data related to your financial assets, liabilities, and cash flows so that anybody, anywhere can access it? In this article, we intend to help you figure that out.

What is the cloud, really?

The word “cloud” normally refers to a network of servers, storage devices, and systems that are under the maintenance and control of a cloud computing service provider. This network serves as the backend for a client application that is accessible to anyone via the internet.

There are many examples of cloud-based applications, including VoIP, word processing, and, of course, online accounting software. Open any cloud-based application, and it connects to its network to fetch its functionalities and data. There’s one simple difference between on-site and cloud-based solutions. With on-site solutions, your application’s backend is located on the premises of your business location. With a cloud-based solution, the back end is remote.

How does the cloud keep my data secure?

Some think that storing data remotely poses risks because your data is on servers accessible to anyone over the internet. But cloud-based accounting software can actually be a very safe reservoir for your data. You just have to make sure to choose the right vendor. Here are a few ways that cloud business accounting software can keep your data secure:

Backups

Data stored in the cloud normally has a lot of redundant backups. This ensures that even if data on the primary servers is compromised, you can always use the backup servers to reload it all.

Lack of physical access

When data is not on your business’s actual premises, it’s out of reach to any visitor or vendor. This lack of physical access makes it virtually impossible for third parties to inadvertently stumble upon or gain unwarranted access to your data.

Periodic auditing

Cloud computing service providers conduct periodic auditing to identify and remove any flaws within the system. This ensures the system is more secure.

What are some benefits of a cloud business accounting software?

You can mitigate the risks of choosing cloud-based accounting software for your small business by selecting a service provider that takes security seriously. For example, highly respected cloud accounting services like Freshbooks and Quickbooks offer top-tier security features on all of their products.

Some experts argue that cloud-based applications offer better security, availability, and data integrity than on-site solutions. In addition, these applications also provide businesses with a myriad of benefits. Some of them include:

Saving on hardware costs

When you purchase software as a service (SaaS) subscription, you save a lot of money on hardware costs. With an SaaS accounting software, you don’t have to purchase servers or storage devices for your local environment. It’s also relatively simple to set up the system. Plus, when you’re ready to scale up, you don’t have to add any new hardware.

Ubiquitous access

No matter your location or device, you can get instant access to the most important financial statistics and reports. All you need are the log-in credentials and an internet connection. This makes it a good choice for companies with remote employees or a distributed workforce.

Go paperless

When you shift everything to the cloud, you avoid printing invoices, expenses reports, or financial statements. Everything is generated online via your accounting software application. Whether you want to create a new custom invoice or log an expense, you can rely on the automation features of modern accounting software.

Integrate seamlessly

Most of the top cloud-based accounting applications integrate with third-party enterprise applications. This includes other cloud-based systems such as CRMs, data storage, and email servers. This allows companies to build a secure, online ecosystem across all cloud-based applications. The best part is that these systems can work in tandem.

What should I watch out for?

As we have already seen, the features of some of the best accounting software for small businesses are numerous. But there are also some things that you should be aware of. Ask these questions before purchasing:

Is there secure access?

Before you choose a vendor, make sure their application is protected by a multi-factor authentication scheme. Also, ensure their cryptographic techniques for encrypting data are compliant with current best practices.

Is the application highly reliable?

When you choose a cloud-based accounting application, you’re completely dependent on it for your accounting needs. This is why it’s important to ensure the service provider is reliable.

What’s right for my business?

No two businesses are completely alike. Therefore, there’s no universal answer to the question, “Is a cloud accounting software right for my small business?” In order to decide,  evaluate your needs and preferences. Then examine them against the cost and benefits offered by accounting applications.

There are tangible advantages to migrating to online accounting systems, like some of the ones we shared above. However, exposure to potential risks is possible. This is why it’s advisable to choose a service provider that has implemented vigorous security. Also be sure it’s compliant with different security certification authorities. Finally, verify that the cloud accounting software you choose is known for providing a high level of reliability.

Conclusion

When it comes to choosing accounting software for your small business, you have to be very careful. There are thousands of options available in the market, but not all of them come with the best features. Nor have all of them been rigorously tested for potential security flaws. Always choose software that keeps your data secure, implements multiple levels of authentication, and gives you the ease to scale as you please.