Thursday, December 26, 2013

What is the Cloud?

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And what does it mean when your business is in the cloud?

We keep hearing about the cloud, as if it’s some sort of amorphous thing that’s hanging out there. I’ve heard people use the term who aren’t exactly sure what it means, but it sounds like something they should know about. Cloud computing encompasses a wide range of services, but I’ve enough to do with focusing on accounting programs, so I’ll stick to that.

If you do your accounting “in the cloud,” your data is somewhere off-site. Where off-site depends on what sort of cloud based solutions you’re using. There are two main categories for accounting:

Hosted solutions: With a hosted solution, you use the same accounting program you use now, except a hosting company keeps the file on its servers, and you access the program through the host. This means you can access your QB file from any computer, and you can share the data file with other users. One of the drawbacks to this method is that you must pay for the hosting, and for a QuickBooks license for each user. Hosting per user per month starts around $50 and up. However, it’s the same program you’re used to using, whether it’s QuickBooks or Peachtree or another software. It works just like your desktop version because it IS the desktop version.

What other drawbacks are there? A plus is that should your servers go down, or your computer system, your data is still safe with the host. But if the Internet goes down, you can’t access it.

Hosting is a good solution if you want the same functionality as you have with your desktop software, and if you have multiple users at multiple locations, or if you just want your data somewhere else.

If you have QuickBooks, you need to use a QuickBooks Authorized Host. There are several that are highly rated, and make sure you do your homework first.

A different solution to hosting a desktop program is moving to an online solution. QuickBooks has QuickBooks Online, which is not at all like working with QuickBooks desktop. The interface is different, and the apps that work with it are different. The marketplace is growing for online accounting solutions, and all providers are improving their software on an ongoing basis. The cost for several users can be less than one hosting license, depending on which program you select. QuickBooks Online has several versions, with the lowest cost one not much more than a check register. Other online accounting programs include Xero, Wave, Monchilla, Less Accounting, and Kashoo (which I’ve heard has been bought by Paychex). I haven’t yet found one that can do as much as QuickBooks Online, but I’m always looking.

An advantage to an online program is that you don’t have to worry about upgrades and keeping your software healthy – it’s all included in the monthly cost. You and multiple users have access from multiple locations, making collaboration easier.

A drawback is that, again, if the Internet goes down, you’re out of luck. There are times when people have not been able to login to QuickBooks Online, so it does happen. My experience has been that it happens infrequently. If you need to process payroll and you’ve waited until the last minute, you may have a problem.

Something else which may be either a drawback or a plus is that the online solutions will automatically download your bank and credit card transactions daily. This is a drawback if you’d rather enter them yourself, and a plus if you’d rather just classify the transactions that come in. Accounts still need to be reconciled monthly however, which I’ve found to be a common misperception. Don’t trust that just because it’s downloading that everything is correct – transactions are missed, things happen, and in accounting we like to reconcile everything to ensure nothing is missing.

Online accounting, whether hosted or an online solution, has benefits and disadvantages, like anything else. It works for me and many of my clients because we can work on the same file at the same time, which reduces my time and therefore their costs.



While QuickBooks desktop still has the most features, and I use it daily, the online solutions are making strides in improving their products. If it’s not right for you now, it may be later, or you may want to keep using your desktop solution. You have the freedom to choose what works best for you.

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