Take Your Business to the Cloud

By Edward Jaekel, CPAThe evolution of accounting for small business has seen amazing advances in the last 20 years. You could argue that, with recent advancements in technology, it is coming full circle for small business owners with some exciting upgrades—upgrades that will see your business soaring to the cloud.In the not so olden days, small businesses often relied on an accounting firm to process their transactions into monthly or quarterly financial statements. Since qualified accountants prepared these statements they were typically accurate and assisted business owners in tracking and improving their business. The late 1990s saw the launch of affordable, easy-to-use small business accounting applications such as QuickBooks and Peachtree. Almost overnight, most small businesses were purchasing off-the-shelf software to track their own records. Unfortunately, accounting software doesn’t replace an accountant, and the quality of financial statements went downhill. This problem was not exposed until the economy took a turn for the worse in 2008. After this, banks and other regulatory agencies demanded higher quality financial data.Explore Your Options in the CloudThe good news is this: With advances in technology, there are more options than ever for helping small businesses manage their affairs via the cloud, also known as the Internet. These options allow small business owners unrestricted access while enabling real-time communication with their accountant. This leads to high-quality financial statements and time and money savings. Some of the more common cloud-based options are:Remote Desktop Connection/Desktop Sharing SoftwareInternet connectivity sites like GoToMyPC, LogMeIn, and WebEx, in addition to software built into Microsoft Windows, give you and your accountant the ability to share access to your business’ computer system and accounting records from virtually anywhere. The primary drawback is that remote access typically ties up the use of the computer while it’s being accessed. This can limit real-time sharing and cause inconveniences to both the small business owner and the accountant.Web-based SoftwareWeb-based software is simply a software application written for use over the Internet. The advantage is anytime, anywhere access with real-time sharing. The primary downside of web-based software is speed and functionality.Since web-based software is written to run over Internet web browsers, such as Microsoft Internet Explorer and Google Chrome, it operates as Internet pages and lacks much of the functionality of desktop counterparts.Application Service Provider (ASP)Often referred to as Cloud-based applications, ASP is simply the hosting of software applications over a web-based, wide-area network. This can be as simple as having a virtual server host a single software application or all of your office application. The major advantage of ASP technology is that the software is usually hosted on large supercomputers in highly secure data centers. The result is that your software speed is no longer reliant on your individual machine—it is, instead, a product of your Internet speed. Since the software is run on a remote computer the only thing your local computer processes is Internet screen shots. This makes accessing your office on a tablet a working reality. Large companies have used ASP technology for many years, and now the technology is more readily available and cost effective to small businesses. Many believe this technology will soon replace owning and maintaining your own computer server.The advances with cloud-based technology are productive and exciting. With a reasonable investment in technology, small businesses can more effectively use real-time access to improve the quality of their financial reporting and enhance operations in ways that used to be only the stuff of dreams. Best of all, this is just the beginning.