So far in our series on doing #business in the cloud, we’ve talked about the potential return on investment of cloud using Office 365 and then looked at project management in the cloud using different tools and platforms.
This week, we’re going to touch on the possibilities of taking your accounting into the cloud.
Let me start off by saying that this is complex. It is also a different kind of complex compared to project management in the cloud because accounting comes with much stricter rules of engagement. Accountants, you know what I’m saying here.
That said, there are a multitude of cloud accounting options out there, from free and low cost services such as Wave, Freshbooks and Xero that are ideally suited to smaller companies (although they sometimes do not play as well with Canadian companies and tax laws), to highly customizable hosted services for multinational corporations.
When it comes to moving accounting to the cloud, for most businesses you are dealing with one of three scenarios…
Scenario One: I want to increase my accounting capabilities
You started out using a basic accounting software package, or maybe even simple spreadsheets. Now, as your company and financial needs have grown, you need to move to a more sophisticated software package to meet the demand.
Scenario Two: I want to increase my accounting capacity
You are already using a more sophisticated software package, however it is living on a single machine or computer in your office, thus limiting access and collaboration. It can also be a business continuity risk if not backed up properly.
In both of these first two scenarios, accounting in the cloud becomes a viable option for you, especially in the cost category. A key advantage is eliminating upfront capital cost for computers or servers that would need to be installed, upgraded and supported in your own office environment in order to expand your accounting capabilities and capacity.
Scenario Three: I have to upgrade my accounting software anyway
You are already in a network environment, using software bought “off the shelf” or licensed per user. In this case the risk (or reality) is that when the developer of that software stops supporting your version of the accounting product, some kind of move is inevitable. For example, one accounting software company recently issued the very last set of tax table updates for an older version of their software, so the software will simply stop doing what you need it to do.
Meanwhile, your servers have also aged, and may need to be upgraded or replaced to run newer versions of the same software. Factor in those capital costs and ongoing support, and maybe that’s not the right direction to take. The cloud is your new place to go.
Regardless of which scenario is pushing you to make a change, a move to the cloud can mitigate risk, cut costs and bring in more opportunities for access and collaboration.
So what packages for accounting can take you to the cloud?
As was the case for project management, there are many options out there. However we will touch on two of the leaders in cloud accounting for medium to large businesses: QuickBooks Online and Sage 50c.
QuickBooks Online is literally that… QuickBooks online, and is has grown and matured substantially since its launch in Canada in 2012. If you already know and love QuickBooks, much of that same functionality – creating invoices, tracking sales and expenses, reconciling accounts – now becomes accessible almost anywhere via your internet-connected device.
If you are running a more complex operation and need more functionality, you can look at Add-Ons and Apps that expands QuickBooks Online with new functionality. Add-Ons such as Payroll allow you to manage payroll right from within QuickBooks Online. Then there are a wide variety of industry-specific and functional Apps that add additional capabilities, such as HR, estimating, or managing a retail store, all vetted by QuickBooks.
From an accountant’s perspective, QuickBooks Online is intuitive and easy to use, and if you are already a QuickBooks desktop user, QuickBooks Online is well worth a look.
In a similar way, Sage 50c is simply Sage 50 online. The ‘c’ in Sage 50c stands for cloud. If you are already using Sage 50 (or it’s predecessor SimplyAccounting) on your desktop, then Sage 50c would be something to explore.
For those unfamiliar with Sage 50 or SimplyAccounting, it matches QuickBooks pretty much feature for feature, although it can require a stronger accounting background to set up initially. But once you’ve adjusted all the ‘knobs and dials’, Sage 50c makes managing your finances just as easy as QuickBooks.
Sage 50c also features Add-ons for functions like direct payments and industry-specific needs, also checked by Sage to ensure compatibility;
Of course this is a very basic look at these systems. Both are industry leaders with matching features sets. If it was a question of choosing between only these two, it would largely come down to experience, personal preference and historical data.
But with so many options out there, especially if you are starting out with no historical data to import, it is worth the time to explore.
1. Check out the free trials and try using the software.
2. Contact your accountant or accounting firm and see what they use.
3. Contact a cloud expert who can guide you and help figure out what system would work best for you.
4. Look into things like how easy it is to move your data out of the cloud (should you want to change services), whether there are ways to continue working if you were to lose your internet access, and how you control access to your information.
Otherwise, all the benefits of cloud also apply to QuickBooks Online. Because the software is hosted in the cloud, you are always using the latest version. Your data is protected from loss due to theft or fire. You and your accounting team can access the information they need to do their job from basically anywhere. And it may even cost you less in the long run.
Next week we look at Business Continuity in the cloud.