Everyone is aware of ‘the cloud’ but there is often confusion about how it can be used by business. There are many different cloud solutions available, each with their own advantages and pitfalls. In this report we look at some of the main areas where the cloud can have a positive effect on your accounting firm.

Work from anywhere

The cloud has the potential to revolutionise business in the same way that the mobile phone did; you no longer have to be sitting at your desk to work. If your data, your programs, and even your entire desktop computer are running in the cloud, you can effectively access these resources from anywhere on the internet. This means that you can work from the office, from home, from a client’s site, from a café, on your laptop or on your iPad with the same ease and get access to the same systems.


Data is the most important asset of many businesses, and most businesses would classify their financial data as their most important. It cannot be easily recreated if lost. Typical on-premise solutions place backup responsibility in your hands and while you have probably engaged your IT provider to back your systems up, how much time has really been put into a full disaster recovery plan.

What are your Recovery Time Objectives (RTO)? Eg how long would it take you to restore if you had to? An hour? A day? A week? A month?

What are your Recovery Point Objectives (RPO)? Eg, could you restore back to last night? Last week? Last month? How far back could you go?

How do you ensure that you could meet these objectives if you had to? How do you know the backup is working? Who’s responsibility is this backup? You should know because the responsibility is most likely yours! That’s a problem because you aren’t an IT professional.

A cloud solution takes responsibility for this off your shoulders and places it with the cloud provider. Obviously in this situation you need to trust that the provider has things in hand, but if they do then they will typically have more resources, more technology and more time to plan their disaster recovery strategy and make sure that all of your bases are covered. They should be able to communicate these plans to you at a moment’s notice.

Guaranteed Reliability

Professional services companies like accounting firms know the value of downtime. The profitability of your firm relies heavily on the utilization of your billable staff. If they cannot work for an hour, that’s an hour of billable time lost.

Traditional on premise deployments do not have any sort of guaranteed reliability. IT providers in this space will recommend that you invest in reliable hardware, ongoing maintenance, regular upgrades but in the end they cannot guarantee the reliability of your systems. The reality is that your systems are not redundant and could fail at any time; the best equipment and maintenance in the world only reduces the risk of failure and cannot remove that risk completely.

Cloud providers typically invest in redundant equipment because they know that equipment will fail and they know that you need to keep working through these failures. The redundancy is there to keep you working even when things do go wrong. This enables cloud providers to guarantee levels of reliability, usually with penalties to them if they do not meet these guaranteed levels.

Data Security

Most companies are very sensitive about their financial data and as an accounting firm, you probably have a requirement to keep copies of financial data for all of your clients. It is therefore important that you have this data secured, both physically and logically.

Physical security is only as good as the room where you keep your server. Unless you have your server hard drives encrypted, and you probably do not, it is possible for anyone who has the server to access all of the data stored on it. Physical security is therefore a major concern; how long would it take a thief to break into your office and walk off with your server?

Cloud providers have varying levels of security but good providers will be situated in a commercially secure facility. These facilities are typically protected by fences, camera surveillance, 24×7 manned security guards, swipe cards, biometric scanners, and a range of other measures. The chance of someone physically stealing data housed in one of these facilities is remote.

From a logical perspective, it is critical to secure your data from possible breaches over the network or internet. Some cloud providers will store your data on shared systems and there have been instances where cloud users have found it possible to access others’ data. This is obviously a major concern. Most small businesses do not have the budget to invest in security measures for their on premise deployments and therefore it is possible that these systems are exploitable by hackers on the internet. It is therefore important to ensure that whether you deploy data in house or in the cloud that the data is adequately protected by the appropriate access policies as well as intrusion prevention systems.

Pricing model

There is constant debate about the pros and cons of OPEX vs CAPEX expense and as an accounting firm you are probably exposed to this every day. Cloud deployments with their set monthly fees are by their nature more OPEX based which appeals to many businesses operating today due to the reduction of ‘lumpy’ spending.

While on one hand increased monthly spending may appear unattractive, the reality is that businesses will need to invest that money on systems at some stage, whether it be for on premise or cloud systems. Unfortunately on premise spending often comes as an unbudgeted lump sum which can cause significant cashflow problems.

Lower Total Cost of Ownership

A common concern with cloud solutions is that a fixed monthly fee ‘looks’ to be more expensive than current systems. Quite often this is not the case because current spending is hidden due to the unpredictable nature of many small business’ IT spending. One month there may be no expenditure on ad hoc support. The next month there could be a problem which costs thousands of dollars. This is difficult to measure and track and usually adds up to more than you think.

A fixed price cloud agreement will typically have a lower total cost because the support costs are lower. What is easier for an IT company to support, a group of users with a mix of different on premise hardware, or the same group of users who are using a standardized cloud environment run by that IT company? Clearly the second option is easier for the company to support which means you get a better service for less expense.

Value Added Services

The cloud opens up a range of possibilities for accounting firms that are only limited by your imagination. Do you have a range of small clients running MYOB on their home PCs? How easy is it for you to help them with their books? Do they have to post you their MYOB file on a CD? Do they back this critical data up?

Would they thank you if you could help them cost effectively implement a system which ensured they were backed up every day? If you could help them access their data from anywhere? If you could access their MYOB file whenever they needed advice? With the right advice you could help them in these areas.

That’s just one example and there are many more. Either way the cloud is not just a tool to help you run your business more efficiently, it can be used to help you help your clients which is a much more important consideration.

Key Lessons

While cloud technology certainly poses some concerns and pitfalls for business it also offers a range of opportunities. These opportunities not only present in the form of improvements to your business, but also in ways that you can help your clients improve their businesses.

Not unlike businesses selecting an accountant, selecting a cloud provider is critical; a good choice can certainly make your life easier while a bad choice could be a costly mistake.

Hayden McMaster