Examples range from smart phones, e-mail, online data storage, IT solutions, paperless offices and of course accounting systems.

Whilst cloud based accounting packages have been around for years, there has recently been a large investment from the major book-keeping software providers in cloud technology and a push to move their customers onto cloud based products.

Even if you are happy with your current accounting system, it is worth looking at the main advantages and disadvantages to a cloud based solution:-

Advantages

• You can access your accounting data anywhere you have an internet connection.
• Your data is always backed up remotely.
• You can have live access to up to date accounting information.
• Your accountant can access your financial records via their own login.

Disadvantages

• You will need a reliable internet connection to make sure your data is always available.
• There are additional security issues storing data remotely. Including the theft of passwords, or even the risk of software provider’s data being hacked.
• Data entry can be slower than on conventional accounting software.
• It’s not suitable for all businesses.

Cost

The pricing model for cloud based accounting systems is usually subscription based. This differs from conventional accounting software, where typically businesses would have to pay for the software up front, plus any future upgrades.

It can work out cheaper or more expensive, depending on the size of your business and your requirements.

Relevant data

Many of the cloud based accounting systems for small businesses have been designed with the directors and business owners in mind. Software providers recognise that traditional accountancy packages have not always been very user friendly to non-accountants/book-keepers.

Examples include smart phone Apps, with real-time access to key financial information such as sales data, cash flow forecasts and outstanding customer accounts.

Is it suitable for my business?

Before making the decision to switch, it is always worth speaking to your accountant first. Your accountant will be able to advise you on whether they believe your business is suitable and how to go about transferring your existing data onto a cloud based solution.

Whether or not you feel your business is ready right now, it is clear that cloud storage is becoming a larger part of everyday life and it is where the major software providers see the future of accounting systems.