Financial Technology

Five Reasons Why CPAs Need Cloud Technology

John Lehman
November 16, 2018

Cloud technology allows users to store data, run applications, and perform a variety of computer tasks through a network of servers online, as opposed to directly on their machines. Many modern businesses are leaping at the chance to convert their operations to this new technology, but what’s in it for CPAs like you?

In this post, we’ll discuss five key features of cloud technology that are beneficial for the accounting industry, and could add value to your practice.

#1 - Cost savings

Modern technology needed to run your firm can cost an arm and a leg—whether you’re licensing productivity software, buying hard drives to backup vital data, or even installing servers in your office. Now, thanks to cloud technology, CPA firms like yours have access to all the essential software and storage space they need without the need for extra equipment. All that’s needed to use cloud apps are items you likely already have, such as a computer or mobile device that’s connected to the internet.

Not only are you saving money by not purchasing extra equipment, but also you’re saving on potential utility and upkeep costs. Running a server for storage in your office requires power, increasing the monthly costs of running your office. The same could be said for external hard drives. By shifting to a cloud-based system, your office’s energy costs will decrease as a result.

#2 - Data security

Keeping your client’s data secure is always a top priority. Prior to cloud technology, the go-to method for CPAs to protect and backup data was to upload it onto an external hard drive. While this can do the job in the short term, it doesn’t guarantee your data will be secure in the long run. An external hard drive could be stolen, malfunction after years of use, or perish in an unexpected emergency such as a fire or natural disaster.

Even still, any hard drive plugged into a web-connected computer could also be potentially subject to cybersecurity events, like hacks or leaks. “You might think you’ve got a clever password or that you’ve developed unimpeachable security habits. But unless you’re a security expert, it would likely be simple for a hacker to steal or hold for ransom every bit of data on your hard drive when you step away from your computer,” said Dave Martin on AccountingWeb.

This is all the more reason to move your sensitive data over to a cloud storage service. By keeping it off your devices, you’ll make it all the more difficult for unauthorized parties to get their hands on it. Plus, you can pass the burden of keeping it safe onto another company, one that is experienced at keeping its servers as secure as possible. Many cloud storage services maintain the highest levels of cybersecurity, and some can even offer guidance to their customers on keeping their machines safe.

#3 - Flexibility

You can’t always predict how much your firm will grow over the years. For instance, you may end up purchasing more equipment than your firm actually needs, meaning you’ll have less of a return on your investment at the end of a year. Conversely, you might find you didn’t expand enough to accommodate growth and reach your equipment’s threshold, leading to a time-consuming shift in infrastructure (as well as an extra cost to boot).

Cloud-based solutions can easily remedy this, as they’re designed to grow alongside your firm—you’ll only pay for as much as you’re using. If your operations downscale, so too can your service (and its price, as a result). Likewise, during a sudden spike in activity,like tax season, space easily can be scaled up on the fly. Plus, unlike servers that need regular maintenance, cloud solutions are typically upgraded automatically.

#4 - Mobility

Without the cloud, CPAs would rely on email, disk storage, or flash drives to pass important files between employees and clients. Of course, all of these options present a serious security risk, whether it be hacks, damaged material, or even losing a storage device altogether. Furthermore, your client or fellow employee may forget to email or bring an important file with them to a meeting, creating more headaches and delays in service than necessary.

Cloud technology, however, allows you to store files in one location that authorized parties can access from any online-connected device. All of your firm’s staff members will know where to retrieve their files and can access them any time as long as they have internet access. This benefits your clients too, as you can grant them the same convenience of accessing their documents from practically wherever they are.

Your billing system can also benefit from the mobility offered by cloud technology, by using an online payments solution. The best among them let you not only accept payments in your office, but also send payment requests via email, allowing your clients to pay you wherever they have an internet connection. This not only makes payments easier for you and your clients, but also helps you get paid faster, as you’ll no longer need to wait for a check to arrive to get paid for your services.

#5 - Project collaboration

Another advantage to the shared storage capabilities of cloud technology is the ability to actively collaborate on projects. Software solutions like the G-Suite from Google let you write documents, plot spreadsheets, and create presentations with your clients and co-workers alike, without needing to be in the same room—or even the same country. You can also make use of client portals to collaborate on documents with clients and collect client signatures remotely. This can not only save time on projects, but also prevent potential headaches over whether your staff or clients have the most up-to-date file for a project. Since the file is in the cloud, it’s automatically saved for all users who are collaborating on it.

For more tips and insights on the latest technology affecting CPAs, download our e-book, "Getting Paid: Trends for Building a Modern Accounting Payments System."