The world is wholeheartedly embracing the “cloud”, and it is shaking up the accounting industry. The marketing machine behind the cloud is brilliant. But what is the “cloud” anyway? A visible mass of condensed watery vapour floating in the atmosphere. No, that’s not the cloud I’m talking about. I’m talking about the practice of using a network of remote servers hosted on the Internet to store, manage and process data. Put very simply, the cloud is the hosting of YOUR data through the Internet on REMOTE servers. Not so sexy when put that way.
There are many benefits to using cloud accounting programs, such as the efficiency gains arising from having deposit and withdrawal information automatically feed into the program from your bank account. These benefits make the cloud accounting programs a great tool. However, it’s very important to recognise that the program is a tool and it has limitations.
I think it’s important we recognise that when we are talking about the cloud, we are talking about hosting information on a remote server. This is not under our control and may not necessarily be in the same country/jurisdiction. There are compromises we make to enjoy the benefits which the cloud offers, including, in a way, losing control of our data. One of the main issues I struggle with on this is the consequence that arises should I choose to change cloud provider. For instance, if I’m using a cloud accounting program and choose not to renew my subscription, let’s say because I want to go to another product, what happens? What happens is that I may lose access to MY historical data. This didn’t happen before the cloud came along and is something I feel the industry needs to address.
When it specifically comes to cloud accounting products, we’re sold on looks – it’s beautiful accounting software. Even more so, we’re sold the promised land; that the cloud accounting software is the answer to all our bookkeeping needs. All we need to do is connect our bank account, integrate a couple of apps and away we go. There’s no need for a bookkeeper anymore because the software handles the rest. I’m sorry, but this just isn’t true.
I’ve had the opportunity of witnessing this first hand and speaking with bookkeepers who far too often see this. I want to make it abundantly clear, just because you run a cloud accounting program, it does not mean you no longer need a bookkeeper.
Good bookkeepers bring great value to your business and will allow your Accountant the opportunity to focus on correct data and give you the right advice at the right time. You see, if you haven’t been trained in bookkeeping, don’t really understand what a debit and a credit is, the result is always going to be the same: Garbage In, Garbage Out!
Your advisor doesn’t stand a chance in giving you the advice you need, and deserve, if the bookkeeping isn’t done right. Unfortunately, this can happen when someone is told about the miracle of cloud accounting and it’s effortless, automatic bookkeeping.
Possibly I’ve been giving the cloud and cloud accounting a hard time, but what I’m really trying to get across to you is this:
- The software can’t do everything; at least not yet.
- We can embrace the benefits of the cloud, but should also be mindful of it’s limitations.
- You shouldn’t underestimate the value your advisor brings to your relationship. If you attempt to cut out your bookkeeper or accountant, you may miss out on that one breakthrough idea. Your advisor needs to be involved – see the data, work with correct data, have conversations with you about the data and what it all means. Without open discussion and collaboration, how on Earth is your advisor meant to advise? All you need is one innovative solution to change your business, your life, the world! Do you really think your off-the-shelf, one-size-fits-all software is going to do this?
At Munro’s we work with our clients who are using a wide range of cloud accounting products. We’re happy to do this as these products are great bookkeeping tools. Importantly, the choice of whether to use these products is left to our client, although we’ll certainly make a suggestion if asked of by them. What I’m getting at is, if you’re using one of the cloud accounting programs available, we’re more than happy to work with you. Just know, the cloud accounting program is a tool, a good tool, but like all tools, it needs to be used correctly. Why don’t you let us help you, use it correctly? Give me a call if you’re interested; we’re just one great idea away from changing your life!