A general concern about cloud accounting is that it is vulnerable and easy for hackers to infiltrate important financial data, but IT analysts Gartner estimated that the total value of cloud-based systems would reach £172bn a year by 2016.
More and more organisations are moving to cloud accounting for benefits such as 24/7 access, real-time data and overall ease and efficiency. But is it safe?
According to a survey of buyers from small businesses by Software Advice, almost half of their respondents were either “extremely” or “very confident” in the reliability of cloud-based software, and 46% were “extremely” or “very confident” in the security and safety of their financial data. This same research also found that use of cloud-based software had almost doubled from 2014 to 2015.
However there is a reality that any system has the potential to be hacked, so it's always wise to take proper precautions. Research is essential, so we have put together some key points for consideration when choosing your cloud accounting provider:
Most of us think nothing about conducting our day-to-day banking online via desktops and smart phones and, in essence, cloud accounting is no different. The security issues are the same as with locally hosted systems – unless your business doesn't have an Internet connection. When checking potential providers it is always a good idea to assess their openness about the issues. Check standard terms and conditions and find out what, if any, service level agreements are on offer.
Check how your data is separated from that of other businesses on the same servers and also ask what would happen to your data if the company goes bust or is sold.
It is advisable to know the physical location of the provider because that may affect data protection requirements.
Paperless Vs. Cloud:
Many people we speak with are concerned about a lack of security when they think about cloud accounting. However, cloud accounting is actually much safer than traditional methods of accounting. All data is stored on the cloud and continually backed up. This mean you will never need to worry about losing data or forgetting to perform a manual backup. Digitally stored files are now more secure because of the many passwords and safeguards, which are required to be put in place when the software is used.
While extreme events could interrupt the Internet or even basic electricity services, responsible providers and clients will have contingency plans in place. Find out what these are.
Acumen has been an accredited accountancy software provider for over 20 years and has forged good relationships with software companies over that time. The team work closely with them to ensure that we are confident in our recommendations to our clients and the capabilities and securities of the packages.