I recently attended a seminar hosted by CPA Ontario, on Cloud Computing....and it turned out to be very interesting.
Cloud computing is currently one of the biggest changes we have seen in how we use our computers and access and store our data in at least a decade. Although we may not realize it, most of us are already using the "cloud" in our daily lives.. Whether this means using internet banking, posting our pictures on Facebook, streaming music through iTunes or watching movies on Netflix. The presenter of the seminar related this change to computing reverting back to how things were done at the advent of computing back in the '70's. People would work on a terminal to access data which was saved on a large mainframe computer in a different room or different office. Similar to this we are now moving away from storing our data on our desktop, to having it stored in a large data centre somewhere else in the world and accessing it over our internet connection to our computer, laptop, tablet or smartphone.
As with most other programs, applications or "apps", accounting and bookkeeping has now also migrated to the cloud. The current popular bookkeeping programs, QuickBooks and Sage50 (Simply Accounting) now also have cloud versions.
QuickBooks Online allows easy migration of your current Quickbooks data to the cloud. One of the benefits is being able to access the data from any device, anywhere. Not just on your office desktop. It also allows easy sharing of data if there is more than one person who wants to access the books, for instance, the treasurer and executive director of a non profit organization. Not to mention the easy sharing of data with your accountant who can then make adjustments needed directly to your books . Password security allows this to be secure and you no longer need to worry about backups.
As far as thing being secure, supposedly the CIA is using Amazon's large data centers to store and manage their top secret data, so I'm betting the security at the data centres being used by most major retailers is a bit better then you locking the door to your office as you currently do to keep your desktop or laptop from being stolen.
One of the downturns of migrating to the cloud however, is that although they make it easy to upload all your data to their system, like in the case of QuickBooks, it does not look like it is a simple task if you want to move that data back to your desktop accounting system with certain cloud based apps. Hopefully this is something that will be improved.
Sage offers a cloud version called Sage One, which can be used on any device. As an example, this would allow you to invoice customers on the spot for service calls using your smartphone and e-mailing the invoice to them. Sage One is a bit different from QuickBooks Online as it integrates with your existing Sage 50 data that you keep on your desktop or laptop. The data from the cloud at the end of the day, or end of the week, can be downloaded back to your computer and to your full set of books you keep on Sage 50.
There are also other cloud based bookkeeping alternatives out there, including Freshbooks and Wave Accounting. Wave differentiates itself from the other accounting packages in that it is free and still offers a full double entry accounting system.
Most of these online cloud versions allow you to download your bank transactions directly from your internet banking right into your accounting program to save you time of manually entering every item. Some programs also provide the ability to be able to take pictures of your receipts with your smartphone, being able to store those as your tax support, and also, using optical imaging technology to upload these receipts to your accounting program, picking out the payee name and the amount you paid and have this automatically entered in your books.
Wow - technology!