Cloud computing is a wise choice for many companies, but some issues have to be considered by users. A large number of companies are using online accounting solutions such as Xero even though a few of them find it hard to use these tools effectively. Essentially some factors have to be considered before businesses begin to use an accounting software. This will ensure that the company remains operational and that the online accounting software in use is reliable and beneficial.
Online Solutions do not Apply to Everyone
The cloud-based accounting solutions are not universal. Even though some users will find them beneficial, other users will find it hard to use online accounting software due to reliance on the internet. Furthermore, there is a lack of control over the data as the information is stored by a third party. The accountant does not have control over the system, how it works and the data stored. Moreover, these applications lack some advanced features that accountants might need. They also have user and data limitations in that the user can only access certain aspects of the software. This means that the accountant will have less control over the software in comparison to offline data sources. These could be overlooked, because obviously, when an accountant sells her services, they would prefer to highlight the positive benefits of using cloud technologies rather than the negatives. Furthermore, the applications cannot support the applications a business has, but instead, it relies on what the cloud-solutions developer can provide.
There is a lack of confidentiality when a business relies on a third party for their accounting needs. The business is sharing its financial data with another company, and this is a risk for the business as the information can be used for their personal gain. Additionally, the financial information can be accessed by unwanted parties such as governments which can easy audit and review our data, especially when the provider relies on servers located in different countries.
Lack of Backup
Even though cloud solutions have a backup functionality, you cannot store the information on your computer. In case the company decides to use a different provider, then you will face problems when transferring the data. The new provider might use software that is incompatible with the previous provider, and the business ends up losing its financial data. Additional, the business can choose to continue paying the previous provider, and this leads to additional costs for the business.
A large number of the cloud-based accounting solutions are horizontal in nature. These solutions are often designed to meet the bookkeeping needs of small business. However, some companies have unique requirements that might not be met by the software.
Despite the disadvantages, the accounting software is useful in meeting the basic needs of many businesses. It includes sales tax, banking features, job costing, fixed asset tracking, inventory and basic accounting. Many companies are suspicious about revealing their financial information to an outsourced company. However, this will be less risky if there is a good and professional relationship with the outsourced company. Moreover, the outsourced company should be reliable, and it should provide the necessary support to ensure that the cloud-based solutions work as expected and at all times. This will ensure that businesses can rely on cloud-based accounting software, and they will experience the benefits.