What is Cloud Computing? In basic terms, it is the storage and access of data or programs via the internet, rather than on your computer’s hard drive. The use of cloud computing has the potential to deliver huge benefits to SME’s, as its applications are practically limitless. A cloud computing system could execute all the programmes a normal computer system will run, with one significant advantage – access to your information anytime, anywhere.
Once you have access to the internet, physical location will no longer matter, as employees, advisors, suppliers, and customers can be contacted wherever either they or you are located. The collaborative nature of cloud computing also enhances access to relevant information by a number of individuals at the same time, which is key to successful decision making. Teams can work in real time on shared documents which are hosted in the cloud, rather than sending endless versions of documents via email. This may prove invaluable when reviewing new potential markets, contracts and customers.
Benefits of Cloud Computing For Your Business
The strategic use of cloud technologies can potentially result in increased efficiencies for both cost and time across all departments within your business. The following are some of the main advantages of cloud computing for SME’s:
1. Increased Productivity
SME’s could significantly increase their productivity across all departments of their business through the use of cloud computing. Increased productivity could be achieved as in theory it would no longer be necessary for employees to return to the office to complete administrative tasks, check on stock levels, price lists, contrary details and any other information required to support their work practices. For example, if a sales representative could access relevant information and databases while visiting potential clients it could facilitate a faster close of business as they will be in position to answer questions and resolve issues in real time.
2. Reduced Software and Hardware Costs
With cloud computing it would no longer be necessary to buy the fastest computer with the most memory because the cloud system would fulfil these technical requirements. Instead of expensive hardware, inexpensive computer terminals could be purchased with just enough processing power to run the middleware necessary to connect to the cloud system. A large hard drive or separate computer terminals for each employee would no longer be required as all the business information would be stored on a remote computer, “in the cloud”. The removal of the requirement for servers and appropriate cooled storage area’s for servers also reduces the requirements for extended office space to facilitate same. Furthermore, instead of installing a suite of software for each computer only one application would be needed, with IT tasks such as version upgrades and data backup being managed by the application vendor.
Cloud computing not only facilities remote access to financial information by your own employees. Because of the collaborate aspect of cloud based applications, cloud computing allows business owners to share information, in real-time, with others such as their financial advisors. This can be a significant advantage for your business as your advisor can access your information without having to visit your office. Such sharing of information will provide more accurate and up to date information which facilitates better decision making in relation to the goals and direction of your business.
4. Cloud Accounting
Cloud Accounting differs from conventional accounting as your information can be processed without you or your employees having to be physically in the office. Cloud Accounting allows for quick, on the go access to your financial information. Some of the cloud accounting options available for SME’s, taking cost and functionality into consideration, include Freshbooks, Quickbooks, Kashoo, Outright and Xero.
At Roberts Nathan we have been working with Xero’s cloud accounting package in collaboration with a number of our clients. Xero has allowed us to share and access to the most up to date financial information with our clients. One of the main functions of Xero is the ability to check cash flows in real time through the dashboard, which allows users to quickly view bank balances, invoices, bills and expense claims. The dashboard also provides an interactive graph which reflects both money in and out, allowing the business owner to monitor specific data on relevant accounts.
Another useful feature of Xero is the facility to upload bank statements directly from an Online Bank Statement. This again provides the business owner with the most up to date information on their cash flow position.
One standout feature of Xero for SME’s is the capability for employees to collaborate with staff from all departments so they can work as a team to achieve the overall goals of the business. In addition to working with each other, your in-house team will be able to share their information with your accountant and bookkeeper who can provide advice as required by your team.
A further benefit of Xero in relation to sales invoices is that it allows you to customise invoices while also allowing you to issue invoices to your customers through an online invoicing function. There are further options to create repeating invoices and schedule supplier payments, bank payments, returns and credits which are tracked automatically.
As cloud computing is all about accessing information on the go, Xero can be accessed through mobile apps for Apple, Android and Blackberry devices. Third-party add-ons can also be used to expand Xero’s functionality by incorporating CRM, inventory management, invoicing, job systems and other specialised business tasks.
5. Access, Privacy and Security
Perhaps the biggest concerns about cloud computing are access, privacy and security. The idea of handing over important data to another company can be a cause of concern for some people. Business owners might hesitate to take advantage of a cloud computing system because they can’t keep their company’s information under lock and key.
To tackle concerns surrounding access, while Xero allows you invite an unlimited amount of people for free, a privacy function allows you to control the information that each person can access. In this regard access to bank and other sensitive information can be restricted to authorised personnel only.
The counterargument to concerns surrounding security is that the companies offering cloud computing services live and die by their reputations. It benefits cloud computing service providers to have reliable security measures in place. If the service provider is not reliable they will quickly gain a bad reputation and lose clients. It’s in the interest of the service providers to employ the most advanced techniques to protect their client’s data.
Privacy is another matter. If a client can log in from any location to access data and applications, it’s possible the client’s privacy could be compromised. Cloud computing companies will need to find ways to protect client privacy. In advance of these measures one way to protect your information is through the use of authentication techniques such as user names and passwords. The best passwords combine letters, numbers and symbols into an unusual configuration. It is important that when setting a password that you do not take the easy route and capitalize the first letter of the word or use the numeral “1” in place of the letter “I” or a zero in place of the letter “O”. It is advisable to include in a few random numbers or characters like a plus sign (+) or underscore ( _ ) as these techniques are more reliable than the simple“password123” or “qwerty”. Once you have a strong password in place it is important that you keep the password to yourself. Don’t spread it around.
An alternative option to help enhance privacy is to employ an authorisation format – each user can access only the data and applications relevant to his or her job. This feature is employed by the Xero accounting services, thereby restricting access to sensitive information to approved users.
Is Cloud Computing For You?
Some questions regarding cloud computing are more philosophical. Does the user or company providing the cloud computing service own the data? Does the cloud computing system, which provides the actual storage space, own it? It is possible for cloud computing company to deny a client access to that client’s email data? Several companies, law firms and universities are debating these and other questions about the nature of cloud computing.
Switching to cloud accounting does not need to be a big decision. However, we do recommend that you seek advice before doing so, as it is important to organise your information in the most effective and efficient manner for your business.
If you are interested in hearing more about cloud accounting or Xero please do not hesitate to contact us or leave a query below.