Update: This article was last updated on 10th Nov 2020 to reflect the accuracy and up-to-date information on the page.
In today’s time, you might have become habitual of hearing the word “cloud” and would be wondering what the fuss is all about. Well, the cloud is something that offers your business functions a unified platform, so you don’t have to go look for multiple solutions.
You can install as many applications as you want and store huge amounts of data on the cloud without worrying about its security and management. As an accountant, you can finally breathe easy and choose not to come to the office daily as you can access the data on your phones from anywhere in the world.
It will help you in managing your time better by cutting down the mundane tasks like traveling.
Consider cloud computing as an alternative for your local systems with more offerings than you could have wished for. All the applications and data that are in your local system can be hosted conveniently in the more versatile cloud.
Theoretically, you can deploy the cloud anywhere, including your office premises, but then you will have to take care of it yourself. You will have to deploy equipment for cooling the servers and will have to spend extra electricity.
Or, you can choose a cloud provider that will offer you these services. You can select the resources you need and pay them as per the plans available.
In this article, we’ll discuss what accountants and CPAs should know about cloud computing, what benefits it inherits, and how they should choose a reliable and good cloud hosting provider.
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What is Cloud?
Cloud is nothing but a group of servers clubbing their capabilities together to create a high-performance computing system. These cloud servers work as a part of one integrated environment.
The cloud environment can facilitate numerous applications and unlimited storage for users. Even if one of the servers malfunctions, the entire load of the server can be shifted to other servers.
Cloud Deployment Models
The cloud is a vast technology and so flexible that you can use it in a million different ways. But there are some basic models that you can opt for when thinking of taking your CPA practice to the cloud.
Now that we have a basic idea of the cloud, let us talk about the different models of cloud deployment:
A) Software as a Service (SaaS)
Under the SaaS model, you can access the applications of a third-party provider or store files on the cloud.
Who hasn’t used Google Sheets to store data or Google Drive to upload their files?
These are all examples of the SaaS model. Google lets you use its application and reserves space in its cloud for your data. You have complete control over your data, but the application is Google’s product.
B) Infrastructure as a Service (IaaS)
In this cloud model, you rent a part of the cloud for your business from a third-party cloud provider. In this model, you can utilize the resources of the cloud for whatever function you see fit. It can be used for hosting accounting software like QuickBooks, for creating a gaming server like Minecraft or hosting a website.
You can ask for the required resources from the cloud service provider, and they will charge you accordingly. You are provided with a virtual server that you can access easily with the right credentials.
The infrastructure is maintained by the service provider, and you don’t need to worry about the back-end processes.
C) Platform as a Service (PaaS)
This type of deployment model is more on the deployment side of things. On an application development project, you need the right platform to build an application from scratch.
PaaS offers you all the necessary environment for developing your software. This might include the operating system, database, and server resources, among other things.
Private Vs Shared Cloud
How many times have you wished for a cloud solution that is designed specifically for your accounting team? Generally, cloud architecture facilitates various applications and processes, and the resources are distributed as per demand.
You can have your accounting application sharing the same resources with other customers. This is what a shared cloud is all about. Multiple customers are accommodated simultaneously, keeping their requirements in mind. As the cloud is highly flexible, you can be given just a small part from the pool of resources.
However, wouldn’t you prefer a more private setting for the accounting application and data, keeping it away from the alien processes of other customers? This is where a private cloud comes to your rescue.
A private cloud is an environment where all the resources are solely for your use. You can customize it as you see fit, and no other external applications have any effect on your process whatsoever.
The private environment also means that your data has an added layer of security as along with all the security safeguards that the cloud providers deploy, your entire process is under a bubble of private cloud.
The Pain Points of Accountants Addressed by Cloud
The accounting process is hectic, and the accounting professionals constantly go through issues that hamper their process. Hence, to improve their productivity, it is imperative for them to look for options that can optimize their accounting process.
One such option is cloud computing. Once you know the offering of the cloud in its entirety, you cannot say no to it. Cloud simply frees you from all the restrictions that have been bringing you down so far.
Let us look at some of the issues that the accountants face on a daily basis and the solution cloud offers for them.
1. The Problem of Access On-The-Go
No one wants to sit behind a desk all day. Especially for the accountants, the tasks can become a little monotonous, and following the fixed office-timings can make their lives dull.
Don’t you yearn for a flexible work environment where you can give more time to your family and health? However, the accounting software and data installed on your local PCs can only be accessed by making long trips to the office.
Contrastingly, cloud technology gives accountants the ability to access their process from remote locations. This is made possible with the power of the Internet as the data can be sent back and forth from the remote cloud servers to the end-point devices.
You can access the accounting software and data from your smartphones, laptops, or even tablets. All you have to do is login to the portal with the right username and password.
You can go for a vacation and feel relaxed for once as the apprehension of leaving the work in the office does not exist anymore.
2. Cumbersome Data Sharing
The problem of managing the data and the means of sharing is as old as accounting itself. Earlier, it was the long trail of papers; now, it is the digital files.
Without the proper platform for it, you are dependent on emails to share the files which are edited, again and again, creating multiple files for you to deal with containing the same information. Also, the data is stored in the local systems of a user, and you have to request the files to access them.
Cloud gives accountants and their teams the ability to view, edit, and share the files on a common platform. Now you do not have to get lost in the endless maze of recurring emails.
You can share files with all the accounting professionals that have access to the cloud platform, and they can edit the files there and then. Real-time sharing of files eliminates data replication and increases your productivity.
You can also share the accounting data with the clients more conveniently over the cloud platform and keep them updated on the task status.
3. Needless IT Expenditure & Maintenance
Are you spending more than you need to? Does the IT budget go overboard every time you try to plan the strategy for your firm?
No business planning is complete without considering the costs involved. Well, the truth is, if a technology cannot help in saving you some bucks, you will be hesitant to accept it no matter how useful it might be.
The high-end hardware that you have installed in your office costs you more than any other aspect of the business. The hardware setup has a lifecycle and becomes obsolete with the latest applications. This forces you to change them regularly, investing more time and money.
First, the cost of the hardware itself takes a big chunk out of your pocket. Secondly, the resources required to operate the machines like power, cooling, and network equipment add to the cost. And don’t forget that you have to keep an IT team in the office premises all the time and pay them to maintain and upgrade the hardware.
However, with cloud hosting, the only infrastructure you need if the basic hardware required to access it. You can also access your process on your phones or laptops, eliminating the requirement of in-house hardware.
Since there is no requirement for extra hardware, power, or cooling equipment, there is no need for an IT team. Just pay the CSP what you owe and forget all other costs.
4. Local Hardware Restrictions
Do you have your accounting software installed on the PCs or the local server? These come with a fixed amount of resources. The resources of the server, that is, the RAM, storage, and processing power can be upgraded only by replacing the old hardware with the new one.
So, every time the system specifications need an upgrade, you have to go through the process of calling the IT professional who reconfigures the hardware – a waste of time and effort.
However, in the case of the cloud, you can alter the resources almost instantly. One day if you wake up and see that there is a requirement for more storage, all you have to do is call the cloud service provider, and you will get as much storage as you want. If you want to change from Windows to Linux, no problem, you will be provided a virtual machine with Linux on it.
Additionally, if your accounting firm needs an additional workforce during the tax season, more users can be added without breaking a sweat.
5. Security Concerns
Is your local setup capable of protecting your data? Most accountants show their deepest concerns over the security of their data.
The accounting data contains confidential information of clients, and it is your responsibility to protect it. But the local setup is not well-equipped with all the necessary safeguards required to create a secure environment for your data.
It is because the local hardware is vulnerable and meant to malfunction at one point of the time or another. When that happens, all your data in that storage device can be lost. To backup the data, you would need backup servers and set-up additional space to keep them.
Also, if any natural disaster like an earthquake hits your office, all the local IT setup can get severely damaged, even the backup servers. There is no way the data can be recovered in that scenario.
With the help of the cloud, you can achieve high levels of security like never before. For starters, your data is not on the local devices. Even if someone steals your laptop or damages your PC, you can just pick up another device and log on to the cloud with it.
The cloud hosting provider offers you advanced security and ensures that your data is safe from the cloud server right up to the end-point devices. You can access your data securely as data encryption ensures that all the data is transmitted in encrypted form.
With multi-factor authentication, you can rest assured that your login credentials cannot be used for any unauthorized tasks by a random user. Multiple firewall setup of the cloud infrastructure monitors the data constantly to filter any dirty traffic that can cause harm to your server.
6. Timely Support
Although the accountants have accepted the introduction of technology very graciously, there are certain issues with the digital setup that keep popping up. Your PC might be hanging regularly, or you might need an upgrade on storage or request to change the operating system.
Here is where a dedicated IT team comes into the picture. The IT team takes care of all these issues for you. But managing an IT team is a hassle in itself. Employing well-skilled men capable enough to take care of your infrastructure is no walk in the park. Don’t forget you have to pay for them as well.
You already have a million things going on in your head. Do you really want your day wasted in tackling these issues? What if you could utilize that time in concentrating on the more pressing matters like improving the customer experience and retention policies.
It has been made possible with the cloud. If you go with the option of hosting your accounting process on the cloud of the managed service provider (MSP), you don’t need to waste time on the IT hassles.
The MSP will take full responsibility for setting up, maintaining, and updating your process, as and when you need it. They make sure that you can access the cloud all the time without any interruption. You can finally breathe a sigh of relief and give more time on business optimization. Just contact them as soon as you face any issue.
7. Lack of Unified Platform
Accounting professionals generally complain about the various accounting applications they want to use but are unable to do so due to the compatibility issues with the hardware.
These applications, also called add-ons, can offer some utility functions and really ease up your daily tasks. But every time a new handy software surfaces, if the specifications of your local PC do not support the software, you can either upgrade your system specifications or learn to live without the software you wanted.
However, with the capabilities of the cloud, you can build a one-stop accounting solution for all your accounting needs. The cloud enables you to integrate various add-ons into your accounting process. As there is no restriction with the system resources, you can scale up the resources as you keep on integrating the add-ons.
Choosing the Right Cloud Service Provider
Choosing the best Cloud Service Provider (CSP) is a challenge in itself. Some providers offer you cost-efficient options, but lack in offering satisfactory services. Some offer advanced security, but their pricing is out of your budget.
There are some vital parameters that you should look for in a CSP, which makes your selection convenient. These parameters are –
- Infrastructure Design
- Private Server
- Help in Transition to Cloud
To read more about these critical factors, you can check an in-depth article on how one should choose a cloud service provider.
Cloud: The Future of Accounting
To keep up with the pace of transition in the accounting industry, every firm should look to migrate their process to the cloud. In this day and age, the role of accountants is not limited to just crunching numbers but also to advise their clients and help them grow their business. Cloud technology can enable CPAs and accounting professionals to be more agile, productive, and stand out in the competition.
Are we missing something? Would you like to add anything? Please share your thoughts in the comments section.
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