Accounting In The Cloud: A Risky Business?

I’m often asked about the issue of risk when using cloud based solutions for accounting. What if the software vendor goes belly up – will you lose your accounts? Cloud computing is a term which conjures up a strong image – much more so than “SaaS” or “on demand”. White, fluffy stuff over which we have no control. But the question of risk is obviously important and so let’s deal with the realities.

My company’s own strategy is to partner with accounting practices, as well as directly with businesses and so we addressed the question of risk head on. First, our hosting partner is Fujitsu and we backup data every 15 minutes (or 96 times a day) and have a separate storage facility for the backups. Users can also take their own backup at any time using the “Export data” button when they are logged on.

Some practices require local data backups to ensure that their clients’ data is copied to their local jurisdiction. This is a regulatory requirement in some countries (for the UK, the data just has to be in the EU) and it’s a service we provide through Fujitsu. For the SME business, the use of online accounting systems can actually mitigate risk. Saas providers like ourselves use a robust IT infrastructure with excellent ‘kit’ in secure data-centres.

Most small businesses have a bunch of assorted servers in an old broom cupboard and are historically bad at keeping back ups!The bottom line is that, for the majority of small and medium-sized businesses (especially those with no IT department), it’s a lot less risky (and a lot less effort) to use a proven cloud computing platform than it is to install software and manage the data themselves. After all, how secure are most people’s computers and data backups against breakdown, theft or fire?

The risk isn’t about the technology – it’s more about not moving with the times and being left behind. As a complete convert to the cloud solution – and ok – as a vendor – I often find myself thinking “Why wouldn’t someone choose this?” In a few years time we will probably look back at the days of installing software in the same way as we look back at cassette tapes and floppy disks. And look what happened to them!

Anders Bjornsbo is Managing Director of e-conomic, a Web-based accounting system that exploits the opportunities of the Internet for easy-to-use, flexible and secure accounting solutions.