Businesses used to fret about sensitive documents, often keeping them stored under lock and key in safes, desks, or file cabinets. Today, so much data is exchanged electronically that hard-copies are usually produced only when necessary. But the need to protect this information is more important than ever, particularly since so much data is being stored in the "cloud"--on Internet servers rather than on-site. Is the "cloud" the right place for you?
Like many small business owners who understand the basics of advanced technology, a question one might be asking is:
What are some key characteristics of why my small business may like to use the cloud as a means to protect our critical financial information?
According to the experts, the benefits of using the cloud can be significant just for general business purposes.
When you consider factors like agility, cost, productivity, and security as just some of the cost saving factors, it can really add up for unforeseen opportunity for any small business.
But let's take the cloud concept a degree further and discuss the hot topic of having your accounting services managed on a cloud system. Why most of you are used to the desktop measure of keeping track of your financials, and may see that as a great way to manage your financials, having the cloud as your tool could be a wise decision when it comes to being a niche company that is agile and unique.
According to First Fruits Accounting CEO Adam Diaz, he shared his list of pros and cons as to why one should consider moving to the cloud when it comes to their accounting. He says "the advantages of cloud accounting include the ability to access your financials from anywhere at any time, always being backed up and supported, and finally, most have smooth bank feed features however, it varies from platform to platform. Add in the ability to make it mobile friendly for your customers or your business, which comes at a cost of functionality, and you end up being very dynamic when it comes to running an efficient business."
Are you convinced yet to hop on the cloud? Already, nearly a quarter of small and medium-size business data resides in the cloud according to software security firm giant Symantec. So what could possibly be the challenges of cloud accounting for your small business?
According to Adam Diaz of First Fruits Accounting, he says "with every upside, there are some downsides to consider. Disadvantages of cloud accounting typically include slower running speed than desktop applications because it is browser based. This is not a big deal if you are not in a hurry or only are doing a few transactions. Being in a browser based environment all day can become tedious and slow." He furthers mentions that "an additional drawback is the potential threat of information being misplaced or hacked." While this may or may not be a concern of yours when doing your accounting in the cloud, he does see the potential there as a possible threat, and so does Symantec.
While cyber criminals rank highest among the threats to cloud-based data, Symantec recently assessed the many routine ways by which file-sharing can increase the vulnerability of sensitive data falling through a proverbial "digital crack" and ending up in the wrong hands. Among them include:
- Mobile Devices. Symantec found that 54 percent of employees are now relying on mobile devices for line-of-business applications. Because employees may be using their own phones or tablets, it can be difficult for companies to control data that is accessible by mobile devices. Countermeasures such as remote wipe (erasing all data on a device from a separate location) or locking access to shared folders can help prevent data breeches, and limit the damage in case a device is lost, stolen, or misplaced.
- Competitors. Most accurately, the source is a former employee passing data to a competitor. According to Symantec, more than half of employees who stole intellectual property, did so by using email, remote network access, or network file transfer to remove the data.
- Cloud Vendors. When evaluating cloud vendors to manage your accounting, make sure you can remove access or wipe information once an employee leaves. Also assess how much the vendor emphasizes data privacy and security. A small start-up vendor may be less expensive than a well-established firm, but also lack the resources and commitment to fully protect their customer's data.
A good source with keeping up with cloud security trends and protective measures is the Cloud Security Alliance, a not-for-profit organization dedicated to promoting the use of best practices for providing security assistance within cloud computing. The website offers several downloadable guides and reports to help you shape a security strategy suitable for your small business.