By: Barry Macquarrie
Blog Series: Post 2 of 4
What are the risks?
The world of cloud accounting is not without risk. These solutions are new and require that you perform the necessary due diligence to determine if the solution is right for your business. Here are a few of the risks:
The vendor goes away: Over a decade ago, we experienced a tech bubble where vendors were here one day and gone the next. The same risk exists with cloud accounting vendors. It is important to have a contingency plan.
You don’t have internet access: Cloud accounting vendors are accessible anywhere and anytime, assuming that you have a connection to the Internet. If you find yourself without internet access, you will not have access to your accounting data.
Security breach: Cloud accounting software and your data both live on the Internet. There is a risk that someone could gain access to your data.
We are just beginning to see the impact of cloud accounting applications. It will take time to determine if they will be the next major paradigm shift in the world of accounting. There is so much more to learn about these products and their impact on the small business community.
You’ve decided that now is the time to learn more. When you google “cloud accounting,” you are overwhelmed. Your search yields over 300,000 results. How do you make sense of all the noise?
I have researched this topic and have found more than 50 vendors claiming to have a cloud accounting solution. It seems that new vendors appear every few months. This indicates to me that we are in the early stage of the product life cycle and will see more vendors enter the cloud accounting market.
The goal of the next installation in the blog series, will be to help you clear up the confusion surrounding cloud accounting and to look at some of the vendors and their products. The next posting will also include a discussion of hosted solutions and a new category of cloud accounting products.
Barry MacQuarrie, CPA is a Consultant and the Director of Technology at KAF Financial Group. Barry combines his knowledge of accounting and technology to provide consulting services focused on cloud accounting solutions. His areas of expertise include accounting software, process improvement and technology management.