Small Businesses Seek Security in the Cloud
by Gayle Bryant
Illustration: Karl Hilzinger.
The number of disasters in recent times has turned the attention of small businesses towards the best way to store their company data. Increasingly, SMEs are considering 'cloud' online accounting systems as a way to limit risk and streamline their operations.
Cloud computing is a way of renting capacity in a provider's data centre and connecting to it over the internet. The provider's staff carries out the maintenance and upgrades of hardware and software and customers typically pay a monthly subscription fee to rent the service.
Some of the benefits of moving business elements such as accounting to the cloud include having your information stored securely online rather than on a server or single computer, always having access to the latest software versions and being to access the information anywhere, from any platform, as long as it's connected to the internet. Some of the online accounting systems available in the cloud include Freshbooks, QuickBooks Online, MYOB LiveAccounts, Saasu and Xero.
Shawn Smith, who runs a Melbourne-based professional photography business, Blinq, uses an online accounting service from Xero. He says he was sold on the service very soon after being introduced to it because he saw how he could access his accounts anywhere there was an internet connection.
“Blinq is all about going to the location and getting the shot,” he says. “Because we're rarely ever in the office, we need accounting software we can use while waiting in the airport or driving along the countryside to our next destination. We also wanted something that was easy to set up and where we didn't have to worry about infrastructure.
"Previously, we used to worry about upgrades and whether the computers we were using were able to work with them.”
Smith says his accountant was previously a big fan of MYOB but he was eventually able to move him online. “In the old way of working I would send him a data file or turn up on his doorstep with a CD or memory stick with the information on it,” Smith says. “I didn't like going out having all this credit information on me – now it's all online.”
Another feature Smith likes are the automatic bank feeds. “You don't have to log into your bank account, download the latest information and then upload it into the accounting system. This information is automatically synced in the cloud and waiting for you whenever you log on.”
Xero Australia managing director Chris Ridd believes many more businesses are building applications around cloud computing as old attitudes towards doing business shift.
“The economic environment is favourable for the uptake in cloud computing,” he says. “All businesses need to focus on cash flow; there is a greater focus on monthly management reporting, and low monthly fees [of the cloud computing model] are preferred by small businesses as compared with the upfront capex model.”
In particular, Ridd says cloud computing is gaining interest from businesses that lost data through disasters such as the floods.
“These organisations are starting to realise having someone to manage the data and back-ups and implement new releases is a good thing,” he says.
“There is a lot of press around cloud computing from a pure cost point of view. Traditionally for accounting you would need to buy a server, software and pay for maintenance. Often you then need to put a solution together and if you start adding it all up it becomes an expensive task.”
There are disadvantages with online systems so you need to do your homework to ensure you choose the right one for you, or even decide whether it is worth making the switch. Some things to check are functionality and whether the system you choose has the same functionality as you get from a desktop system.
There may also be times when the internet connection is unreliable or slow so this also needs to be taken into account when making a decision to use cloud-based services.
However, Smith says his business has saved money and a lot of time since moving Blinq's accounts to the cloud. “It also means my accountant can get back to advising me on the business rather than spending all his time crunching numbers – cloud computing has changed the type of conversation we have.”