Many accounting professionals and businesses are migrating to cloud platforms because they’ve started to realize the wide range of benefits it offers.
Cloud accounting increases productivity by providing features such as remote collaboration, all-time data and application availability, higher uptime, improved performance, top-notch security, and so much more.
Although many accounting businesses have started investing in the cloud, there are still many that prefer sticking to their traditional accounting software as they have some unanswered questions.
To answer some of those questions, we at Ace Cloud Hosting reached out to Randy Johnston, an industry expert who’ll help you clear all your doubts related to cloud hosting.
Randy Johnston is a nationally recognized educator, consultant, and writer with over 40 years of experience in Strategic Technology Planning, Accounting Software Selection, Paperless Systems and Network Integration, Business Continuity and Disaster Recovery Planning, Business Development and Management, Process Engineering, and outsourced managed services.
A lot of businesses are moving to cloud platforms. What’s your take on this?
When you have minimal or no internal or local expertise with technology, using cloud technologies provide you with convenience, scalability, and capability.
Cloud technologies enable work at home, which was important during the COVID-19 pandemic and other natural weather events like hurricanes and floods.
Further, when you have multiple locations, the need to work from client sites, or the need to collaborate on a single file or set of files, cloud technologies enable collaboration.
Finally, cloud technologies provide connections between multiple products and minimize your need to understand how to make the connections as well as how to maintain an appropriate backup.
In what ways do you think cloud accounting is better than traditional accounting?
Cloud accounting enables updates to be conveniently applied. Deploying accounting in the cloud allows your business to stay current on the software, which can have feature improvements, updates for compliance, and multiple integrations to third-party products to be managed by the implementation team.
On the other hand, traditional accounting frequently requires upgrades in place, systems must be taken off-line for maintenance work, and infrastructure often must be upgraded to support a new release.
The critical difference in the cloud vs. traditional accounting is recurring expense versus capital expenditure. The initial cost of entry may be lower for the cloud, and the total cost of ownership may be higher or lower when compared to traditional accounting.
Do you think cloud accounting can be turn out to be cost-efficient?
Cloud accounting can be very cost-efficient. If licensing costs can vary up and down with seasonality or with the addition or reduction of employees, businesses have much control over their cost of running an accounting system.
Further, the number of seats of cloud accounting required can be minimized by functional area. For example, the accounting department may only need a few licenses of accounting, but the sales department may need 10, 20, or more licenses of CRM.
Likewise, other modules for specific business functions, like eCommerce, do not have to be licensed by the user. Finally, there are minimal or no administrative costs related to cloud accounting software.
Why are some of the businesses still hesitant to migrate to the cloud? What are the challenges that they face?
The main hesitations revolve around performance, reliability, and costs.
Many small businesses still use paper and spreadsheets for their accounting. But for the firms that have automated with small business accounting software, they frequently install the product on a single machine in a single location.
Frequently, the software is only needed by a single person. Moving operations to the cloud can increase costs, reduce performance, and decrease reliability due to internet inconsistencies. Further, once the business is internet-connected, the company is more vulnerable to bad actor attacks.
How does the cloud ensure top-notch security?
Cloud providers have a much greater risk of a bad actor attacking their business. The bad actors recognize the value of all the clients’ files and confidential information.
If a company is trying to keep all this information locally, it must provide all of the security, including firewalls, antivirus, multi-factor authentication, and more.
On the other hand, when using cloud providers, more is spent on hardware and software security, IT professionals monitor and protect the infrastructure on a 24×7 basis, and the economies of scale allow for more sophisticated tools to be used. Further, most cloud providers employ people with security skills to minimize the risk to their own business.
Lastly, if a business decides to migrate to the cloud, on what factors should they choose a cloud service provider?
Cloud service provider quality and performance vary widely.
Most claim that providers make it difficult to verify or confirm. Critical factors include support response time, uptime history, performance measured in both latencies, and the speed of loading applications.
Security factors include the use of Multi-factor authentication, secured client access typically with Citrix or VMWare clients, strong firewalls with security services, and edge protection software, including antivirus.
Soft factors include ease-of-use, simplicity of submitting tickets, time to resolution, and applications that are stable and work properly. The reputation of the company, financial stability, years in business, and certifications such as SOC reports and SSAE reports verify that a third-party has reviewed the provider’s quality.
Cloud is by far the best thing that has happened to the accounting industry. With the rapid pace that businesses are adopting to cloud-based models, there will definitely come a time when you’ll have to switch to cloud, whether you’re ready for it or not.
So why not do it now and stay ahead of your competitors?
If you have any more questions, please ask us in the comments section below.