Andrew Lassise is joined by Della Hudson, a UK-based cloud accountancy expert, on this episode of the Tech Talk podcast. They discuss why accounting firms should be in the cloud, what that means and how to get started. Of course, they discuss how to practice good technology security as well.
You can listen to the episode wherever you listen to podcasts – including Apple, Google, Spotify, etc. You can also listen below or watch on YouTube. You can also read Andrew’s recent article on Accounting Today on the topic here. The article below is largely based on the conversation between Della and Andrew.
What does it mean to be in the cloud?
Back in the day, companies would have computers which were then attached to a server. Those servers were then located on-site, in the same building. Backup servers were often located off-site. Moving to the cloud means that everything is now distributed electronically. Assets are no longer just saved on-site, but across a network of computers – also known as the cloud. Moving into the cloud can cut costs as companies don’t have to buy servers and related equipment.
“Putting it all into the cloud means that if something goes wrong with my laptop, I can just go and buy a new laptop or access it all from my tablet,” Della said. “I can go somewhere else to login. It’s much more secure.”
If something happens to a firm’s building the servers can also be damaged and information can be lost. In a cloud accountancy the data would be unharmed given the distributed nature of working in the cloud.
“The advantages of going into the cloud are the continuity, the portability – quite frankly you don’t have to worry quite as much,” said Andrew. “What if the building burns down? You won’t be able to access what’s on your on-site servers.”
In addition, a lot of “modern software is now build in the cloud,” Della added.
Why are companies not in the cloud?
“The hangup for people often can be ‘this is different from how I used to do it’,” said Andrew. “Sometimes, that’s as simple as using a spreadsheet and when you want to share it it’s put onto a flash drive and walked over to the person who needs it. God forbid I drop the flash drive and lose it somewhere and somebody takes it,” Andrew said. “The security on that is just horrible, horrible, horrible.”
Andrew mentioned it can come back to specific age groups and even age of a company. If a company has been around for a while, they likely established their systems and technology when they started. Being in the cloud may not have been a thing then.
“Some of the younger accounts may have even started their newer company in the cloud already,” he said. “Moving to the cloud is really a no brainer. Let’s flip it: If we were initially in the cloud and somebody would pitch moving to on-site, no one would say ‘this is better.'”
Sometimes people think of moving to the cloud, or changing any process, in a way that it means they have to stop doing something that they truly need to be doing. That can slow down the necessary move to the cloud.
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How has being in the cloud been an advantage during COVID?
As many accounting firms started working from home, being in the cloud has been an advantage, Della explained. Being able to work at home and being able to access the documents needed easily has been a lifesaver for many. For companies that don’t have a good system in place for off-site access it has been a struggle. A cloud-based setup can help here.
Other advantages of being in the cloud
Using cloud software solutions can also help and ensure that you are using the latest technology. For example, cloud technology solutions evolve over time and automate more and more tasks that used to be done manually.
Many cloud solutions look just like you are working on your desktop. Andrew also shared the story of an accountant whose laptop seems to die every tax season. That can be an issue when everything is saved only on the desktop and not in the cloud.
Automatic backups are another big advantage.
“Having automatic backups is about business continuity,” said Andrew.
Della mentioned when her then-young son broke her external hard drive which was holding the backup. If the laptop breaks at the same time, all that work is lost. In the cloud, it’s saved.
What are some disadvantages of being in the cloud?
If your internet goes out or is sluggish, you can’t work on anything. That can be an issue, though one that seems to be a problem less and less. Even when office internet is offline for a bit, employees can still use hot spots on phones in the interim. Also consider where you are living and what the internet connectivity is there.
“Where I live it’s semi-rural and there are some places that don’t have reliable internet here,” said Della. “But the standard that you require is surprisingly low. With cloud accounting it’s tiny, tiny packages of data going up and down to the cloud. If you can get a half decent video stream you’ll be fine.”
How to move your accounting firm into the cloud
“The way we did it to get started was to get a hosted desktop,” Della said. “Partly because some of the software we were using wasn’t cloud based at that moment, but we wanted all the benefits of the cloud so we found somebody to just host the desktop.”
“In this case, the desktop that I was seeing was actually on a server elsewhere,” Della explained. “And it looks exactly the same.”
That also allowed her to leave her laptop behind when going to meetings. “I could just take my tablet and reference a few things.”
Even with all the advantages of being in the cloud, you’ll still have to follow basic best practices. Follow your written information security plan, which is required by the IRS.
How about people training?
Even with cloud security and workflows, people can still be a weakness when it comes to your firm’s overall security.
“You can have all the locks in the world at your house and if somebody opens the door for the bad guys they are still getting in,” said Andrew.
“The systems do come with such brilliant controls,” Della said, stressing that even with a great cloud set-up employees still need to be vigilant. “Back in my auditing days we would see how far we could get into an organization.”
And if you walk through the front door with your briefcase and you look confident, just wave and say hello like you see them every morning you can get all the way into the building, Della said. And that’s how people can find passwords that are written on a posted note, tacked to a computer screen.
Also, don’t save your passwords on your computer in a document called “passwords.doc” for example.
Cloud computing conclusion
At the end of the day, being in the cloud can make things easier for your accounting firm, can cut hassles when something happens to individual computers or the servers and can even cut costs.