Gain advantage with cloud accounting

EU statistics show that just 19% of enterprises used cloud computing in 2014 – mainly for hosting email systems and storing files electronically (Eurostat). Out of these businesses, 46% use cloud services for financial and accounting software applications, customer relationship management or running business applications.

“These statistics suggest that while take-up of cloud computing is currently low, some businesses are making the most of its benefits,” Ian says. “While more are likely to follow, businesses who maximise the benefits of cloud accounting now can gain a competitive advantage.”

Access to real time financial data when and where you need it is ever more crucial to running a successful business. Business owners and managers who are regularly on the move and working from multiple locations will be aware of this and can benefit from cloud computing.

Misunderstood risks?
The slow take-up of cloud-based services may be due to misconceptions over associated risks – understandable following widely reported incidents of data security breaches at the likes of Sony as well as numerous instances of hacking. So what typical concerns do businesses have about using cloud-based accounting systems, and are they justified?

  • Data security: whilst no cloud service provider can guarantee 100% security, specialist cloud service providers will often be using the most up-to-date and secure technology, and have accredited and fully audited processes and systems – likely to be significantly more robust than most internal business networks.

  • Data ownership: terms and conditions should always be checked but, in general, you retain ownership of your accounting data even when it is stored on a provider’s cloud accounting system and are able, and recommended, to take your own backups.

  • Location of the data: where your data is maintained and backed up is important for compliance with data protection laws and also privacy. Some cloud service providers will use servers located outside of the European Economic Area, and although that raises privacy considerations, in most cases the service provider will comply with relevant data protection principals such as under the US–EU Safe Harbor framework.

  • System availability: leading cloud accounting systems are highly reliable, underpinned by service level agreements and system uptime guarantees.

Multiple benefits

  • Improved accessibility of management information: as long as you have an internet connection, you can access key business information such as sales, receivables, and cash from wherever you are.
  • Better collaboration: you can share accounting data with team members, stakeholders and external advisers (such as your accountant) more easily.
  • Cost savings: using cloud-based services means you need less computing infrastructure (hardware, office space and people), and so removing potentially costly overhead as well as ongoing software maintenance: that’s all done by your cloud service provider. 
Process efficiencies: there are also significant efficiency savings to be achieved through greater functionality, such as the automatic feed of bank data into your accounting records, automated matching of transactions, along with more streamlined processes and controls, for example, over invoice and expense claim processing and approval.

“There are many benefits of using the cloud, particularly for accounting purposes,” says Ian McBane, partner in our Business Support & Outsourcing team. “For most businesses, those benefits will almost certainly outweigh any perceived risks.”

Finding and implementing the right solution is as important as it ever was. “We work with businesses to identify their immediate and longer term accounting and reporting needs and advise on the most suitable solution for them,” Ian says.

“At Moore Stephens, we are accredited users of a number of leading cloud accounting solutions suitable for both small and large businesses, so we can help clients get set up and make sure they maximise the full benefits of cloud services fast.”

For further information on how your business can benefit from take-up of cloud accounting solutions, please contact Ian McBane.