It’s estimated that 78% of US small businesses will be using cloud computing by 2020. As technology has evolved, business owners have begun to see the huge benefits offered by the cloud and that’s lead to a steady increase in cloud adoption among smaller enterprises.
But many small businesses are still apprehensive about one key area of working with online applications – and that’s internet security and the safeguarding of their financial and business information in the cloud.
So is cloud accounting a safe way to manage your financials?
That’s a question we get asked a lot here at Polay+Clark, and the short answer is a resounding ‘Yes!’. There are security precautions to take into account, as with any business system, but for most small business owners the multiple benefits of a cloud-based accounting system will convince you to switch to online.
The limitations of desktop-based accounting
If your business has yet to make the move the cloud accounting, it’s likely that you’re still using one of the legacy, desktop-based accounting systems. While the actual functionality of desktop accounting is tried and tested, there are many downsides to working from a traditional software system – and you may also be surprised that your desktop system is not quite as secure, or as efficient, as you’d thought.
- Accounts are only available on your office network – when you use desktop accounting to manage your finances, you only have access to those numbers when you’re logged into your own office network. That’s severely limiting when you’re away from the office, working on important financial decision-making with colleagues or collaborating with your CPA and advisors.
- Data held on laptops and local drives can be unsecured – there’s a preconception that online data is unsecured, and data on a local drive is safe. But when most of your laptops and PCs are plugged into the internet, there’s always the possibility of your local data being hacked, or attacked by malware, worms, and other viruses. And don’t discount the security implications of business data stored on portable laptops either – they can easily be stolen, or left behind at a restaurant, putting your data at risk.
- Your physical server is prone to security issues – it’s not just laptops and PCs you need to worry about. How secure is your physical server? Is your server room protected, and how hard would it be for someone to walk in and get access? Where there’s a physical drive, there’s always a potential risk.
- Updates and fixes have to be downloaded – desktop systems only get updates, bug fixes, and security protocols when you remember to download and install them. So you could be using an accounting app that’s several versions behind the latest software – with all the problems that can create.
- Your accounts are only as secure as your business firewall – you may be diligently backing up your data every night to a server copy, but your business information is only as safe as your network’s firewall. Once breached, it’s very easy to gain access to sensitive data and to download it.
All in all, managing your financials from a desktop system will do the job, but it’s limiting, it’s inflexible and it’s also far more prone to security problems than providers would have you believe.
So, how does cloud accounting measure up against these old-school systems?
Why cloud accounting is more secure
Online accounting isn’t a brand new kind of technology. Cloud accounting platforms, such as Xero online accounting, have been around for over a decade and provide an established and exceptionally secure environment to run your accounting function.
- Accounts are accessible anywhere, anytime – when you manage your financials online, you have access to your accounts and key numbers wherever you are. Just find an internet connection and log in to your accounts with highly secure password protection and encryption.
- Data is held on highly secure cloud servers – all your accounting data is encrypted using the industry-standard TLS (Transport Layer Standard) encryption technology and data is spread across multiple data centers to make it even less prone to malicious hacks.
- You’re always using the latest version – when you log into an online accounting application, you’re always using the most current version of the software. There are no updates to action, no fixes to install and all your security settings are 100% up to date and geared for any known threats.
- Your accounts are protected by military grade security – rather than your accounts being sat on a server in your office, or on an easily stolen laptop, your data is backed up automatically to cloud servers with true military grade protection – both online and on the ground at the server locations.
There have been plenty of ‘horror stories’ in the media about the security implications of working in the cloud, but we think you’ll agree that the reality of working online is very different and a lot more positive.
Cloud providers know that online security is an absolute must for business owners, and the makers of cloud accounting software are incredibly proactive about updating their solutions to make the security watertight.
Security combined with incredible business benefits
So, should you switch your small business’s bookkeeping, accounting, and financial management across to a cloud accounting platform?
Ultimately, your decision comes down to how much value you place on the benefits of using online accounting, versus how comfortable you are as a business with your data being stored online in the cloud. In our opinion, as cloud-accounting specialists and huge advocates of an online way of working, there’s really no competition. The cloud is where business is headed, and it’s time to embrace the benefits.
And for an increasing number of business owners, the list of advantages clearly outweighs any potential worries around cloud data storage:
- You get 24/7 access to your numbers wherever there’s an internet connection, making collaboration a real breeze and giving you the perfect accounting solution for your small business
- There’s no need for time-consuming back-ups, expensive office servers or costly IT support.
- You have integration and data-sharing between an ever-growing ecosystem of cloud systems and online tools
- You have absolute control over who accesses your accounts, and what access privileges these people are granted.
- Cloud providers are extremely vigilant about data security and take every possible precaution to safeguard your online accounts.
Talk to us about switching to the cloud
If you want current, actionable data where your financials are actually useable instruments, rather than a compliance necessity, you should be seriously considering moving your business to online accounting.
We’re great believers in the efficiency and integration that cloud systems offer to driven, aspirational business owners. We’ll help you switch to an online accounting system, link to the most practical choices of cloud tools and will provide the best possible way to run and manage your enterprise.
Get in contact with the team and see just how secure your financials can be.