The Cloud Is Iminent for Accounting and CPA Practices

We’ve all heard the phrase “Cloud Computing” at this point. What exactly is cloud computing, and how does it transform your Accounting business? Well it’s time to find out, because the cloud is rolling in. That much is clear about “cloud computing,” a hot topic of late. The questions everyone is asking are: -What is “the Cloud”? -How quickly should I jump on these technologies? -What kind of difficulties are in the cloud?

The cloud refers to computer programs that are hosted and run on the web rather than being installed and run on a local machine. You are probably already using “the cloud” even if you don’t know it. For example; If you already have a CPA Website you’re most likely already using cloud software. Most CPAs use ready-built websites from providers like CPA Site Solutions or Accountant’s World. If you created your own website it’s very likely that you use a content management service through a company like GoDaddy or Network Solutions. These website builders don’t require you to download any software to build or maintain your site. Instead the content management software is accessed online through your web browser. All you need to do is log-in and make your modifications on-line. This is an example of “software as a service”, or more colloquially… “the cloud”. All the specialized software you need to make the changes to your site is stored and maintained on the server. You don’t need to download, install, or update a website editor on your computer to use it.

One thing’s clear: the idea seems to already be catching on with accountants. Some experts – like Gregory LaFollette, consultant and Executive Editor of The TechGap, speaking from the 2010 New Jersey Accounting, Business & Technology Show – suggest that unless accountants are able to adopt Internet-based applications to improve workflow, the latecomers will be left competitively in the dust.

Accountants have traditionally been slow to embrace new methods of doing business, LaFollette explained, citing the shift from DOS to Windows. “Think of it this way: What are you going to do when a client comes in and asks to post their completed tax returns on your portal so they can download it?” LaFollette asked.

“You will be at a severe disadvantage if you can’t do that. Imagine going to a bank that doesn’t allow you to do online banking. You’d go somewhere else.”

Others, like David McClure, president of the US Internet Industry Association, and Trey James, co-founder and CEO of Xcentric, which specializes in technology for CPA firms, are more conservative about the future of cloud computing with accountants.

To McClure, cloud computing is the ugly older brother of the decades-passed client/mainframe system—which today can be found in underfunded education institutions and libraries—yet with an Internet-age spin that he claims is like “putting lipstick on a pig.”

He compares the Cloud to client/mainframe in the sense that it still provides control of the software and infrastructure, but it doesn’t have any say over where the data actually ends up.

Because of the vast reach of the Cloud, accountant data could wind up as far afield as Russia and China. McClue asks how badly do accountants want their data stored in an area with unfamiliar laws on how information can be accessed and used?

According to Trey James, who compares the Internet to a complex network of pipes, the technical side of cloud computing also deserves attention. Some firms may find that they don’t have proper connectivity to make accessing the Cloud as fast or efficient as it should be.

A network is only as strong as its weakest link, James states, and if a company wants to invest in the Cloud, it must first make sure its Internet connectivity is up to par.

Undoubtedly, upgrading to cloud-ready status will take come work. Greg LaFollette points out that assorted large companies have already made the commitment in spite of the risks, with systems ready to roll out in the next few years – including Intuit and CCH.

With these businesses and an increasing buzz on point, it is clear: the Cloud is rolling in.