“Cloud computing” is a frequently heard buzzword lately and referrs to a adjustment in the way computer programs are delivered to your firm. Rather than being made available by disc or download and being stored and run on your local rigs, cloud software is stored and operated somewhere else and accessed with a web browser over the net.Numerous accountants and CPA’s are stating to invest in cloud computing. Are you one of them? If the answer is “yes”, give yourself a pat on the back! Cloud computing is  without doubt on the verge of becoming the rule rather than the exception.

Keep in mind, on the other hand, that there are potential risks with this trend.

We repeatedly take our business applications for granted, but it has taken lots of us numerous years to incorporate our practice’s systems. Have you ever genuinely considered how many programs you employ each day to conduct your business? From Microsoft programs to accounting software to your messaging - your time is usually dispersed across a range of sundry systems. In a perfect world all of these could “talk” with each other.

This scenario illustrates what I mean:

Wouldn’t it be great to be able to do this without using your mobile minutes?

You’re out to dinner with a friend. After a while your friend excuses himself. He says, “Keep talking. I forgot to feed the meter. I’m just going to pop out to my car”. The conversation continues. A few blocks, a few miles, even the other side of the world might as well be a few feet away on the internet.

Of course this is a nice little story, but not many of us have the good fortune of making our fortunes dining out with friends. But this kind of communication is also vital professionally.

Now in a conventional software environment it’s unlikely that two people will have compatable messaging software, but in the cloud it’s easy.

Efficiency Matters

Although cloud computing can be a major resource and a substantial time saver, that potential dwindles if applications in the cloud can’t talk with the programs on your computer.

Existing accounting programs are, for the most part, already pretty good at this. They “talk” to each other, and the dialogue is valuable. It significantly boosts efficiency. For example:

• Client records are updated when Tax talks to Engagement and Practice.
• Work papers are linked when Engagement talks to Microsoft Office.
• All applications to Document Management - and so on.

But imagine if Tax and Practice weren’t able to talk, or the link between Engagement and Excel was broken. Can you imagine the data entry you’d be stuck doing?

Mixing up Your Apps Can Be Problematic

Online applications and locally hosted ones are fundamentally different. Old school office apps like Word, Excel, and Quickbooks don’t usually play nice with web based ones like Google Docks and Quickbooks Online. The coding glitches are enough to cripple interactivity between them. For example, using the cloud for your tax software and then turning to a practice program installed on the local network creates difficulties with dialogue.

Be careful to test compatability with your office systems before adopting new cloud services. A partial move will put these links in danger. You may need to make a more dramatic transition.

Data Security

Most small accounting firms don’t have on-staff IT experts. This means that reputable cloud services are better equipped to handle your data security in almost every respect. Most have security experts that can protect your data from accidental loss to hackers or viruses.

Unfortunately this doesn’t protect you from some man-made disasters. Formost of these is data storage. In order to use cloud applications data needs to be uploaded to the remote server running the application. As a rule they will let you store that data online once it’s loaded. This is much more efficient than uploading each file in order to work on it, then downloading it when you’re done. Unfortunately it also leaves vital client data stored off-site. In and of itself this isn’t a problem, but it makes you vulnerable to business closures and “Data Retreival Fees”. It’s important to keep up-to date copies of all your client data on-site at all times. Always backup your files to a local machine daily.

Be Cautious, But Don’t Get Left Behind

In a decade or so accountants can anticipate having all or most of their industry applications are hosted in the cloud.

Until then, mind the gap! If you don’t you may end up paying for it.

About The Author

Brian O’Connell is the owner and founder of CPA Site Solutions, one of the country’s largest web design businesses dedicated entirely to accounting website design. His company presently provides websites for more than 4000 CPA, accounting, bookkeeping, and tax preparation firms.