Interesting article in the CPA Australia July 2011 “In The Black” publication titled “Cloud Accounting”. Generally, the article discussed the benefits and growing move towards using cloud accounting software and compared MYOB LiveAccounts, Saasu and Xero.
It is agreed that the ability for the client and accountant to have on demand access to data is more beneficial than the “freezing” of use by the client of a file when it is with the accountant. Although cloud use appears to be more advanced in other countries, Australia’s cautious approach makes good business sense.
Firstly, like all good business practices, business owners need to investigate whether the technology is cost effective for their business, now and into the future.
Having said this, as the technology and products are still relatively new, a major concern must focus on the security of the systems particularly in relation to hacking and who can legally access data.
As mentioned in the article, hackers have made a name for themselves in recent times and clearly get the biggest kick from hacking into major systems because it brings the greatest attention and largest impact. Even though big providers have more ability to provide security they need to because in reality they face the greatest risk should their systems be hacked. Small micro business’s biggest threat revolves around adequate backup procedures including, for example, keeping backups offsite.
Also of concern are the questions as to:
- who can legitimately access data;
- are business owners aware of who is and/or who can access their data; and
- do business owners have control in relation to their data access through cloud accounting.
Recent information indicates part of the answer lies in where the proprietary system resides (that is, in what country the system resides) because that will determine who has authority to access the information. In other words if the proprietary systems or backups resides outside of Australia then the information may well be governed by laws very different from Australian laws.
It is suggested that this is a question that needs to be discussed by cloud providers with prospective users to ensure transparency and security for the business owner.
Yes, there are great advantages of cloud accounting, but, remember, it is your business’s information. (Blog author – David Balwin CPA – Balanix Solutions)