The significance of cloud accounting and addressing concerns around security of information

In a relatively short period of time, there has been amazing progress in the area of cloud accounting.

Already, cloud based accounting is enabling business owners to do more and faster.

Cloud accounting refers to using cloud-based software to run the accounting function of a business.

In addition to being fast and being able to do more, cloud accounting also brings along with it a number of benefits.

Benefits of cloud based accounting

Live Access to financial information

Probably the biggest advantage of cloud accounting software is its ability to link directly to the company’s bank feeds.

By linking up with your bank, transactions are being pulled through from the bank straight into the accounting software.

This means no more uploading of bank statements, saving a lot of time.

It also means live access to financial information.

Because all bank transactions as well as all debtor and supplier invoices are captured within the cloud system, financial statements will always be up to date.

However, the key is to ensure bank reconciliations are conducted in a timely manner and executed in a proper fashion. As is always the case, having technology at your disposal is one thing – using it in the best possible way to boost productivity is another!

When used properly, cloud accounting allows business owners and management to monitor sales, cash flow, debtors, financial targets, payables and much more at any time.

Fast reporting and analytics

With access to live financial information, producing meaningful and more importantly, usable management reports can be as simple as pushing a button if set up correctly.

Cloud accounting systems have strong reporting tools that can generate graphs, variance reports, key metrics and many more financial snapshots to form a financial dashboard for the business.

This means the least financially savvy business owner or manager can understand and stay on top of the company’s finances.

Any device, anywhere in the world

No longer bound to a specific computer at the office, cloud accounting allows you to log in from any device with an internet connection anywhere in the world.

This has enabled geographic restrictions to be lifted for many business owners.

Direct link to your accountant

Your accountant is a trusted advisor and business partner.

With the ability to invite the accountant to access a company’s cloud accounting profile, both management and accountants have a full live view of company finances and position in order to give the best possible strategic direction to the business.

But is it safe?

Information security, privacy and control is probably the biggest concern for many business owners when considering cloud accounting or for that matter, any service that entails storing private and sensitive information ‘somewhere, out there’.

With cloud accounting, your information is stored on someone else’s computer.

Most cloud computing service providers go to great lengths to take measures that ensure that data is safe, including backup power supplies, firewalls, data encryption software and regular, third-party security audits.

They can also protect data against physical threat such as floods and fires by having multiple servers in different locations.

In general, professional cloud accounting service providers take security extremely seriously and as such, set up well constructed and robust fail safe systems as touched on above.

Cloud service providers take great care to protect sensitive and confidential data, but ultimately each business needs to consider its own attitude towards risk, the data being stored and the implications of a security breach.

If a business decides the benefits of the cloud outweigh the risks and they are happy to accept the risk then they need to ensure they choose a cloud provider carefully and implement robust procedures to mitigate the risk of problems, such as; controlling access rights, regular password changes and training staff on security risks.

Aperture Accounting can help your business decide whether to migrate to a cloud accounting system and which one is best for you.

We specialise in Xero, Quickbooks and Sage One.

Contact Aperture Accounting for a no obligation consultation on 02 8860 9660 or 0469 235 269.