FINRA's BrokerCheck

The Sky's the Limit

BWD Magazine, Spring 2012

Though, "The Cloud," is the hot new buzz phrase for the layman technology user, cloud based applications have been around for quite some time. Anyone who uses yahoo mail or Gmail is using the cloud as their e-mail application. Online banking, Facebook, and LinkedIn all use cloud technology. It has become part of our everyday life – both personally and in business. While most of us are already using the cloud, we probably don't even realize it.

For accounting applications, the cloud has been around for more than ten years. As the internet became more accessible and less expensive, the advantages of a cloud based accounting system became more obvious. The Cloud helps put both small and large companies level the playing field as it relates to gathering accounting and statistical data to help run and manage their businesses. For smaller companies, the cloud offers some very affordable full-suite accounting packages, allowing them to use a more complex system and have access to the data that allows them to better compete with larger competitors. For larger companies, the cloud can help reduce the cost of an accounting system to better compete with a company that may have lower overhead costs.

So what are the advantages of a cloud based accounting package? It is more efficient, allowing real time data reporting, document storage (paperless environment) and mobility. The Cloud allows companies to gain efficiencies in the way they process transactions.

  • Pay bills
  • Process invoices
  • Approve employee expenses
  • View sales and customer data
  • Generate financial reports
  • 24/7 access to all of the above from any web browser (even smart phones and tablet devices)

Sales people can use their smart phones to send orders to the office electronically; papers don't have to be passed around the office because documents are stored in the cloud; payments can be approved and released while out of the office and it can all be integrated with the company's financial reporting package.

Other advantages include:

  • Automatic update of systems
  • Electronic document storage
  • Cloud storage of all documents

These types of services are available for businesses of all types and sizes by taking advantage of accounting applications that are all cloud based.

Naturally, there are some concerns with cloud based systems, such as security and ownership of the data. When selecting a vendor it is critical to make sure there is an understanding of who owns the data, how quickly the company can access the data to change systems if they chose to and ensuring that the vendor has the appropriate security measures in place. Just as you would with any accounting program or service, consulting with your CPA or accounting professional is a good place to start when investigating these types of systems. Other important considerations are:

  • Look for products endorsed by professional associations in your field
  • Inquire whether of the cloud providers have received an SSAE 16 (formerly SAS 70) audit by an independent auditor, to address security controls.

 

Rehmann utilizes cloud accounting applications to help service clients with accounting functions that historically had to be done on the client's premises. The cloud is here to stay, and if used properly can provide many strategic advantages to processing transactions. Even if you are not ready to make this leap, many of your competitors may be using and your employees and customers may start asking for it, so it is important to understand the advantages. For more information regarding how to best apply cloud applications to your business, contact your trusted advisor.

 

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