Traditionally, accounting management systems would be stored on local hardware, and data would be saved on each and every computer within the business. However, the use of cloud accounting is becoming more popular and has many benefits for accountants and their clients!
So what is “the cloud”?
“The cloud” is not a physical entity or location; it uses the internet to store data remotely. You can upload, download, and update documents from anywhere!
Why do we use it?
These are my top 5 benefits for using it for accounting services:
- Cloud accounting provides one single location for documents to be held, which means that they are always going to contain real-time, accurate information. Without the cloud, if you update a document on your computer and someone else updates the document on their computer, you will soon have several documents that are different! When you update a document, everyone will see those updates, and you will all be working with the same information and updating the same file.
- You don’t need to keep investing in and maintaining your own infrastructure as the cloud is constantly updated. So you’ll save yourself some time by not having to install regular software updates on your computer! It also provides a much bigger storage capacity than you would find on most hardware.
- The cloud can be accessed from anywhere; you don’t need to be in your client’s office or glued to your desktop computer. As long as you’ve got the internet, you can get access. And if your computer breaks, you can simply log on via another device!
- The cloud enables the sharing of information; you can invite individuals to have access to your documents, making collaboration easy! This could be with your clients, colleagues, or business partners.
- From an accounting point of view, my favourite benefit of using the cloud is how it allows many different apps and tools to connect. You can have a live bank feed going into your accounts, receipts coming in that you’ve uploaded, payments being recorded, and so many more, all coming together neatly in the cloud.
One question that often gets asked is, “How do we know our data is safe?”
It’s sometimes hard to get your head around sending data off into the cloud and not having it in a physical space. You wonder how the data is kept secure. How do we stop unauthorised individuals from accessing our cloud?
Cloud storage providers create many systems and controls to keep your data safe. They are constantly updating their security measures and firewalls.
When the data is stored in the cloud, it is encrypted using complex algorithms to protect the information. It also gets encrypted while it’s travelling to and from the cloud!
You control who has access to your files, so it becomes clear when someone is trying to access your data who shouldn’t be. Cloud providers have systems in place to detect unauthorised access attempts and prevent data breaches quickly.
Often cloud software will have multi-factor authentication, which means you don’t just have to enter a password; you have to set up a second step, another way to confirm you really do have permission!
A good example of two-step authentication is when I’m logging on to Xero. I log on using my password, and then a notification is sent to my phone asking if it really is me trying to log on!
So as you can see, there are many benefits to using cloud storage, and it has become a firm favourite with accounting practices. If you aren’t already using it, it’s likely you will be in the future.
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