What Are Risks of Cloud Accounting?

What Are Risks of Cloud Accounting?

One of the most controversial issues in computing today is “trusting” the cloud. It is sometimes hard to understand where this more-than mythical “cloud” is … and what happens up there in the “cloud?”

The “trust” really comes down to two issues: 1) data backups and security, and 2) where in the world is your data being stored?

Let’s look at storage, first. Companies providing services in the cloud, including Intuit® with QuickBooks® Online (QBO), are storing the data in locations that may or may not be in Canada. Does it matter if data storage is in another country – the United States, India or even Curacao?

Without getting technical, this issue conjures up visions of Big Brother, Homeland Security and Cyber Attack – a very valid concern. Nevertheless, I have taken the tact of informing my clients about this issue and getting them to acknowledge that they may be storing data in foreign locations. Data security is more critical to companies such as Intuit than it is to my little firm, I tell them. I recently polled all of my clients about this issue, as I am using SmartVault to provide a portal for their data. Data will be stored in the United States, I told them, and they had the option to elect not to have the service. Not “ONE” of them elected to refuse the service!

Now, regarding backups and security, what if I no longer have the files? I log onto QBO, perform my accounting entries, get my reports and pay my bills, but nowhere on my system can I find the physical file. I can’t put it onto my flash drive or back it up to a disk and put the disk in a vault.

The answer is … nope, you can’t, but as mentioned earlier, the providers would be out of business if they lost data or had corrupt data. In fact, there is a far less chance that they will lose your data than if it were entrusted to you, the novice. They are professionals. They know what they are doing. Does this sound like trust? It is. Much the same way I “trust” that the government won’t lose my medical records. It is just something that is in our lives.

LESSON: While it is not tangible and is hard to understand, the cloud is a position of trust we can feel free to accept. As for Big Brother? Well, they have been watching for YEARS and it didn’t bother you before … lol … you just didn’t know it.