Should You Move Your Accounting System to the Cloud?

According to the RightScale 2017 State of the Cloud Report, 95 percent of respondents are using the cloud. In fact, 85 percent are using multiple clouds. But what exactly is the cloud, or cloud computing? What are the pros and cons? Does it make sense to move your accounting system to the cloud?

To be clear, LFL Veritas is not an IT consulting firm. However, we can confidently say that making any business decision or purchase without doing your due diligence is unnecessarily risky. Here is some very basic information about the cloud that can help you conduct your own cloud-related research before deciding if you should move your accounting system to the cloud

What Is Cloud Computing?

Some say the cloud is remote-access computing. Others say the cloud is simply a metaphor for the Internet. A handful of people believes the cloud means your data and applications float through the air.

The National Institute of Standards and Technology defines cloud computing as “a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

A simpler definition of cloud computing refers to the use of applications, services, and data that are remotely hosted in a cloud service provider’s infrastructure rather than your onsite data center. These resources are accessed via the Internet.

For example, popular email platforms such as Gmail and data-sharing tools such as Dropbox are cloud applications. Instead of requiring businesses to buy CDs with software downloads, Microsoft Office now emphasizes Office 365, the cloud-based version of its productivity suite.

The Pros and Cons of the Cloud

The cloud shifts IT costs from the capital to operational expense sheet. Instead of building or expanding an onsite data center, simply access a cloud service provider’s infrastructure and services.

With the cloud, you pay a monthly fee and scale services up or down according to business demand. This allows you to pay only for what you need and reduce your in-house data center footprint, along with the costs of managing, maintaining, powering and cooling that technology. You can focus on core business competencies instead of pretending to be an “IT person.”

Perhaps the greatest benefit of the cloud is the ability to access business tools and services – always the latest versions – from virtually any location and device. Anytime, anywhere access saves time, improves productivity, enables greater collaboration, and supports remote workforces.

Although security has been a longstanding cloud concern, the security tools used by a cloud service provider are generally far more sophisticated than in-house tools, and they’re managed by a dedicated security team. Data is constantly backed up, and cloud providers have a redundant infrastructure to minimize downtime.

Of course, the cloud has its downside. Cloud security may be better, but you’ll need to create and enforce strict policies to control access to cloud resources. This involves preventing sloppy password practices and ensuring the use of secure Internet connections. Most major breaches start when credentials are stolen or unknowingly handed over to a hacker.

If you have no Internet connection, you have no access to the cloud, so you have to make sure you have redundant connections. Compliance requirements often dictate how and where data can be stored and protected, and some industries don’t allow certain types of data to be stored in the cloud.

What about Accounting Software?

QuickBooks is far and away the market leader in accounting software and has been offering a cloud option for years. Emerging players like Xero and Kashoo also offer cloud-based accounting software. As mentioned previously, you’ll always have anytime, anywhere access to the latest version of your accounting software through the cloud. LFL Veritas does not endorse any software because every company’s needs are unique.

The question isn’t whether the software can be moved to the cloud. You have to determine if the cloud is right for your organization. The vast majority of businesses are hosting at least a portion of their applications, data, and workloads in the cloud.

The first step is to identify what business goals you want the cloud to help you achieve, what problems you want it to help you solve, what applications you think should be migrated to the cloud, and what features and functionality you need to support your business processes. Then look for a cloud service provider who checks all of your boxes instead of finding a provider first and adapting your business processes and goals to fit their services.

If you don’t have in-house IT personnel with cloud experience, consider bringing in an IT consultant to help you determine if the cloud is right for your organization and help you choose the right cloud service provider.

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