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Cloud-Based Accounting – Is it the Future?

18 FEB 2014
Career Path : Accounting

When it comes to businesses adjusting to new technology, the moves today are happening faster than ever. In the world of accounting, there was a time when everything was done by hand. Then computers came out and some accountants made the switch while others didn’t, but as new programs like Quickbooks and tax software emerged, the old way became too slow and expensive.

More recent technology is coming out in cloud-based computing. This is where networks are not linked through wires, but wirelessly via interface software over the web. Many feel that this is the future in accounting while others believe it is too dangerous because of susceptability to hackers.

The Benefits of the Cloud

When it comes to networking your system through a cloud there is a great savings in time and money on software expenses and installation/updates. Many accountants today will remotely connect to their computer when they are at a client’s office, but through the cloud there is a step saved from this process. As the technology improves, more steps and expenses will be elimintated making it too expensive not to be on the cloud.

In addition to this, the cloud has a program in place for backing up files (redundancy) just as one’s computer does.

The Drawbacks of the Cloud

Having said this, it is also true that cloud computing may not be the way to go. After all, not all new technology takes, and sometimes alternatives are equally matched (such as Blu Ray discs and DVDs).

Additionally, academia needs to be part of the process. If clouds are not used in accounting courses, then students – who will later implement the technology more widely – will not accept them as necessary.

Lastly, just as clouds can save money, the security issues that exist (especially the unknown ones) will be much more costly. For this reason, a premium investment in security should be considered.

What do the Experts say?

For the sake of this article we were very fortunate to have an interview with Christopher Pascale, the Chief Financial Officer of Portfolios With Purpose. Being a new and up-and-coming organization, one may think that this charity would put its accounting on a cloud, but that was not the case at all.

Mr. Pascale, an accountant who recently became a manufacturing executive at Kleer-Fax, Inc., said that while he did consider putting the accounting on a cloud, he chose not to, and, rather, maintains the charity’s books in a Quickbooks file on his laptop. The reason was simple: he prefers less access, not more, to the accounting.

When pressed to expand, he stated that the charity’s financials are released to Board of Directors every six months, and that he produces monthly reports for his boss, Stacey Asher.

Getting back to the title question of this piece, is cloud-based accounting the future? It very likely may be, but it will also adapt. The clouds we float on today may be unrecognizable when their time comes.

Visit National Academy of Health and Business for more information on accounting courses.