On the surface a lot of cloud accounting applications can sound very similar. Nearly all will help you track your business transactions, evaluate your business performance and prepare a budget, but what an application can do is only part of what should be considered when moving your business into the cloud.
Where will the data be held? Can you access back-ups of your data easily? Will you have to pay more when you add a company or necessary functionality?
Cloud applications can benefit SMEs enormously. The two major benefits are price and flexibility. By accessing your software in the cloud, rather than on your own hardware you will significantly reduce your IT costs, also you can have access from any device at any time. Another benefit is how easy it is to sign up to start managing your business online, but before you sign up, here are three important considerations I think any business should make:
1. Know where your data will be held
Is your data going to be held in Australia, under Australian privacy laws? While right now there is no law regarding the jurisdiction under which Australian businesses store their financial information in the cloud, it is certainly being discussed at a government level.
Laws differ from country to country and you want to be confident that your sensitive financial information is secure. As a small business you may also store information relating to your clients, so it’s worth considering how protected their information is as well.
2. What do you get for the monthly fee?
If you need to manage payroll and inventory, ensure that these features are included and understand any limitations before signing up. It is not unusual to see low sign-up fees attached to products, but the costs increase significantly as more functionality or data files are required. If you know the functionality you need, know how many data files you’ll want to set up and the number of users, you’ll be well prepared to evaluate the different options and the true costs.
3. Can you be confident in the longevity of the provider?
The last thing you would want is for the supplier that you place all your business data with to go out of business. It’s important to carefully analyse the supplier’s financial position to ensure they are profitable and have a strong financial track record. This is very easy to do if they are a public company.
These are just three key things to consider when moving to the cloud. You should also know how your data is backed-up and if you can access the back-up; what types of support are available and the hours you can contact them; as well as what will happen if your connection is lost, will your information be saved and can you continue working offline?
Cloud applications can be a very effective, time-saving addition to any business. By investing some time to ask your cloud provider these and other questions relating to your business needs you can be confident the program will help your business improve productivity for many years to come.