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Top 5 Concerns of Cloud-Based Accounting

Moving accounting into the cloud is no longer the practice of outliers. Everyone from corporate accountants to independent CPAs are embracing cloud-based accounting as they say goodbye to their legacy systems. There is a lot to be said for the cloud, a lot that benefits the accounting industry.

The thing about cloud applications is that there seems to be no middle ground. They are either exceptional or not worth looking at. The same goes with cloud environments. Before a CPA firm can make the transition to the cloud, it must thoroughly investigate providers. It must look closely at the kind of service each provider offers along with the software they support.

Here are the top five concerns when moving accounting into the cloud:

1. Uptime Performance

Believe it or not, data security is not the number one concern. The IT community has made great strides toward improving security to the extent that the cloud is now one of the most secure environments in the cyber universe. Security is still important, but it does not take precedent over uptime.

There is no room for lost service in the modern cloud. CPAs need 100% uptime without excuse or they risk alienating their clients. So it is imperative that they do not simply believe a cloud provider’s claims. They need to verify uptime via statistical data.

2. Cloud Security

There is an enormous difference between cloud security and data protection. Note that data protection is discussed in the next section. As for cloud security, CPAs cannot afford to work with providers whose architecture does not exist in a secure environment.

Cloud security starts with the physical building that houses cloud servers. It includes network access to the servers, hardware and software firewalls, how servers are isolated and/or partitioned, and so on. You can never be too careful about security.

3. Data Protection

Of course, security does extend to the data itself. Every possible means must be taken to prevent breaches, otherwise CPAs are exposing their clients to all sorts of potential problems. Having said that, data protection goes beyond just security issues. It also includes any kind of incident that might lead to loss of data on a server. This is to say that cloud providers need to offer built-in redundancy. They need to automatically back up data on a regular basis.

4. Service Level Agreements

It is never a wise idea to enter into a working relationship with a cloud provider without first reading and understanding service level agreements. A service level agreement (SLA) is essentially an outline of the services the provider will commit to providing. It should also contain some sort of mechanism that would be triggered if the provider fails to live up to its commitments.

5. Provider Support

CPAs are not IT professionals. They are accountants with special knowledge in the areas of taxation and financial planning. They can tell you everything you need to know about how to limit tax liabilities without running afoul of the law. But ask them how to fix a software bug that prevents accounting software from automatically updating and they will have no clue.

A CPA firm absolutely must have access to 24/7 support provided by capable people who know what they are doing. They have to be able to address problems with their software and data at a moment’s notice. Without around-the-clock support, a CPA firm cannot rely on a cloud provider.

Moving accounting into the cloud is the way to go in the information age. But doing so requires due diligence to find the right cloud hosting partner.

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