Cloud accounting is certainly popular at the moment. You may be interested in trying cloud accounting and you may also be wary, so how do you make a decision on what to do?
Remote accessibility is not new
It’s likely that the main benefit to you of a cloud based solution is that you can access your accounts data anytime from anywhere and the data can be accessed by anyone who is authorised to see and work on it.
A web based solution will certainly do this for you, however this functionality has been available for some time using remote desktop, LogMeIn and “Go To My PC” to name a few. The main difference between these and cloud-based systems is that this data is still ordinarily stored locally on your system.
The main thing to remember is that cloud accounting solutions are not the only way of creating universally accessible systems and data.
This is an important aspect when identifying the correct solution as it opens up all of the potential accounting packages on the market for selection and this means you can make your decision based on more important factors than just accessibility.
But what might those features be?
The most important thing to get right is that the product provides the output information and reporting your business needs. There is no point choosing a product that doesn’t provide sensible management information (MI) – how can you make sensible decisions based upon poor or non-existent information?
If your system cannot give you useful MI then you need to reconsider your options. Long gone are the days that you kept accounts for compliance purposes only, nowadays it’s important to ensure you utilise your data cleverly.
But how can you know what information you need? That comes from asking questions about your business – for example, do your profits come from where you think they come from, or who is your best customer? Make sure you produce a list of the reports you might need and get your accountant involved.
Once you have this list, you can check whatever product you’re interested in can give you the information you need.
A system’s key features aren’t “easy data entry” or “integrates with your bank online” these are nice to haves but not key requirements and certainly should not be listed under a “must have” column on your own requirements list.
Additionally, although slightly less important criteria you will want to consider can include:
Data security and backup – how is this provided and managed, any DPA (data protection act) issues to consider?
Ongoing costs including training and support (important if you want to use the system properly)
Ability to electronically send information to clients
Ease of use and ease of finding staff who can use the system
Ability to import data and link with other systems via APIs (Application Programming Interfaces)
Make sure you can easily get a sensible data extract out of the system.
When selecting a new system be it a local one or cloud based solution, don’t just think about accessibility. Make sure the solution covers off you key core business requirements and provides good management information.
Try to obtain the advice from independent sources, accountants, consultants or even other businesses – the sales patter of almost all of the system providers will likely make their products seem all-singing/dancing, but the reality is often different.
Make a list of the absolute “must have” and “would like to have” features. Then, if any system cannot give you a must have feature, simply discount it.
Finally, consider your choice of vendor carefully and ensure you have considered the risks involved including their own financial strength and longevity plus the products lifecycle – ask for assurances and information if needed. You may well find the perfect product but the provider may not be financially stable, especially in the cloud arena.
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