Cloud Technologies: 5 Advantages For Accountants & Bookkeepers

Cloud technologies are now in full force and are gaining traction throughout the consumer and small business markets. Even if you are not an advocate of cloud technologies, you are currently living in an ever increasing cloud-centric world. Simply put … the train has left the station and we all must jump on board or be left behind.

I credit the explosive growth of cloud technologies to five key advantages for us as users:

Anywhere, Any time Access

The Internet is, by nature, everywhere. As such, applications hosted on the web are accessible from any web-enabled device. Though a limited number of cloud applications require you to have a PC and/or Mac, many are becoming accessible from mobile devices as well.

With significant advances in the speed of cellular connectivity (4G and LTE, for example), the web has never been more accessible, bringing everything the cloud has to offer to any device within reach … literally at our fingertips.

Accessibility to applications and data isn’t simply a matter of convenience. It is critical to real time, collaborative business operations and enhanced team communications and cohesion. It also facilitates connectivity between businesses and their customers.

Just a few of the many examples include:

CRM – Customer Resource Management or CRM applications are real-time tools that facilitate communication and tracking with an organization’s customers – creating a higher touch environment that leads to better close/win ratios on sales and significantly enhanced service for existing customer relationships.

Team Collaboration and Project Management Software – Team communication and collaboration is a key component to success in the modern, fast-paced business world. Businesses with collaborative tools are more efficient and more productive. Internet connectivity for business management tools is a key differentiator, and often provides the business with a competitive edge while, simultaneously, increasing profitability by streamlining human resource costs.

Field Service Applications – These applications empower remote, customer-facing employees with tools formerly limited to the back office, like scheduling, invoicing, customer payment receipts and more. The term brings to mind industries like HVAC that provide contract-based maintenance and repair. But, in a broader sense, the term can apply to any remote connectivity tool for any customer-facing employee in the field, including time capture for professional service firms, remote data accessibility for field researchers and more.

Expense Tracking – Expense reporting is a prevalent and pervasive need for any business with traveling or remote employees and is, in the minds of those employees, a dreaded chore. But, cloud hosted expense reporting solutions are game changers, allowing employees to quickly capture expenses as they occur (often by simply taking pictures of receipts), and then file expense reports directly from mobile devices or laptops.

Platform Independence

Just this week my daughter was watching a cartoon on Netflix in the car – streaming the video on my iPad’s LTE connection. When we arrived home, she continued to watch the cartoon (without interruption) as she walked from the car into house. But, now that I was out of the driver’s seat, I wanted my iPad, a device that my daughter had successfully commandeered. To get the device back I fired up my Apple TV, loaded Netflix and selected her video – where Netflix automatically synchronized playback with the mobile device. She had a bigger screen to enjoy and I had my iPad back. Everyone was happy.

This type of platform independence translates well into the business world where even a very small business with a couple of employees or even a sole proprietor can leverage a variety of software platforms, such as PC, Mac and Mobile. And, even if a business requires all employees to use either a single platform, the employees will often leverage personal technologies like home computers or mobile devices when traveling or when working remotely.

Simply put, the PC-dominant world is fading fast. The resurgence of the Mac and the prevalence of mobile technologies have created a vital need for platform independence – the ability to access the same applications with the same real time data and similar user interfaces simultaneously across multiple devices.

Since cloud applications require little or no software to be installed on the local device, they are perfectly suited (and easily adapted) to work on multiple platforms. This has long been the case with PCs and Macs, but now developers (including Intuit) are working hard to make all of their cloud applications mobile friendly as well.

Cap-Ex Free Deployment

Adopting cloud technologies requires little or no capital expenditure, meaning that even the most powerful applications do not require you to ramp up on local infrastructure (local area network upgrades/build outs, for example), require no upfront software purchase and allow you to increase the scale of software incrementally as the company grows.

Though cloud technologies still involve adoption costs in configuration, employee training, data migration and other areas, the cloud deployments significantly streamline these costs because there is no hardware configuration, no local software installation and no need to connect data sources across local area networks. Also, cloud applications facilitate remote implementation, allowing companies to leverage remote consultants with reduced (or eliminated) travel costs.

The business also saves on post implementation costs in that:

  • new hardware purchases do not require reconfigurations to connect to cloud applications.
  • the company can scale up on software and data capacities disproportionately to hardware costs, and
  • software updates from the developers push seamlessly and automatically throughout the organization.

Security and Privacy

Many perceive the cloud as less secure than the desktop – more exposed and vulnerable to hackers. There is also a growing concern that some cloud application developers will fail to maintain the privacy of user data.

However, most cloud applications are incomparably more secure than desktop application.

Three reasons include:

Hardware Theft and Loss – Locally stored data is very difficult to secure. Even the most sophisticated firewall systems can protect a company only from electronic intrusion, not from hardware theft or loss. Most hardware thieves are less interested in data than in the hardware itself, but once a business is no longer in control of its hardware, it must consider all of the data on that hardware as compromised.

Vulnerabilities in Data Transmission – Remote employees often connect to office computers through technologies like Windows Remote Desktop (RDP) and other remote accessibility clients. Accessing data remotely protects the company from increased risk through hardware theft/loss, but the transmission of data is often not secure. To adequately protect data from outside intruders, the company must couple the remote client with application layer filters (FTP). This type of encryption is inherent in secured, based cloud applications (256 bit encrypted HTTP).

Data Center Audits, Assurance and Compliance – All computerized data is stored on physical devices, whether those devices are local or “in the cloud.” In that sense the term “in the cloud” is misleading – implying that the data is not physically bound to a local device that is subject to physical protections.

In fact, the physical devices that store most cloud data are incomparably more secure than what a local business (especially a small to medium sized business) can afford to implement. These physical protections often include:

  • Enterprise quality firewalls.
  • Onsite, physical security like fencing and keyed access points.
  • Limitation of access to physical data to a very few, highly vetted technicians.
  • Discretion regarding the physical location of buildings that house data centers.
  • Enterprise level data encryption and security protocols
  • Audited privacy and security protocols, policies, procedures and infrastructure, subject to an annual SSAE No. 16 report (formerly SAS 70).

Hardware Theft and Loss – Locally stored data is very difficult to secure. Even the most sophisticated firewall systems can protect a company only from electronic intrusion, not from hardware theft or loss. Most hardware thieves are less interested in data than in the hardware itself, but once a business is no longer in control of its hardware, it must consider all of the data on that hardware as compromised.

Vulnerabilities in Data Transmission – Remote employees often connect to office computers through technologies like Windows Remote Desktop (RDP) and other remote accessibility clients. Accessing data remotely protects the company from increased risk through hardware theft/loss, but the transmission of data is often not secure. To adequately protect data from outside intruders, the company must couple the remote client with application layer filters (FTP). This type of encryption is inherent in secured, based cloud applications (256 bit encrypted HTTP).

Data Center Audits, Assurance and Compliance – All computerized data is stored on physical devices, whether those devices are local or “in the cloud.” In that sense the term “in the cloud” is misleading – implying that the data is not physically bound to a local device that is subject to physical protections.

So, my conclusion: though data centers that store cloud data and applications are not invulnerable, they are much more secure than almost all privately managed local area networks. This is especially true if the data center is subjected to an annual technology audit (SSAE No. 16 report) that evaluates privacy and security protocols, policies, procedures and infrastructure.

Stability

Storing your data in a secure, scalable data center like the one described above will also give you a significant increase in system stability. Enterprise level data centers incorporate redundancy and backup technologies that increase up time and significantly reduce downtime and practically eliminate data loss.

This is in stark contrast to the local area network or desktop environments where data is stored at best in a centralized local server and at worst across multiple laptops and workstations throughout the organization. Data backup is difficult to maintain and/or enforce and downtime on the company’s server often cripples the entire company until IT can bring the systems back online. When the IT department is outsourced, the downtime is often extended and creates significant costs – strategically and monetarily – for the company.

Embrace the Cloud!

Cloud technologies are not perfect and are not invulnerable, but in my mind, the advantages of cloud technology far outweigh the disadvantages, especially with some of the recent strides the industry has taken in regard to security, stability and privacy.

As adoption rates for the cloud continue to soar, I encourage you to embrace the cloud both because of the benefits listed in this article and because doing so will harmonize your technology with that of your peers and clients. In short, the cloud is the technological “playing field” for 21st century business. In my opinion either businesses adopt the cloud and play in the game or they remain on the desktop and watch from the sideline.

Embrace the cloud … play the game!

Editor’s Note: Want to learn more about the cloud from Joe Woodard? Attend his annual Scaling New Heights Conference, June 4-8, 2017, in Orlando, Fla.

About the Author

Joe Woodard

Joe Woodard

Joe Woodard is the CEO of Woodard Companies. He is an author, consultant business coach and national speaker who has trained over 75,000 accounting and business professionals in areas of practice development, changing technology trends, strategic consulting and how to maximize the use of accounting software in their practices. In 2012, 2014 and 2015, he was recognized by Accounting Today as one of the Top 100 Influential People within the accounting profession. In 2008, Joe he recognized by CPA Practice Advisor as one of the Top 40 Up and Coming Thought Leaders under the age of 40. He regularly publishes articles for Intuit publications and for Insightful Accountant, and has been featured repeatedly in Accounting Today and AccountingWEB, both in articles and in video interviews.

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