Posted on: Friday December 05th, 2014

Author: Kilimanjaro Consulting

Cloud Accounting – What is it?

Cloud computing is a term used for delivering hosted services over the internet to remotely store, process and share digital data. The cloud is just a metaphor for the internet and it is everywhere. Interestingly, active use of cloud computing services is significantly higher than levels of awareness, with 55 per cent of the total adult population estimated to have heard of the term ‘cloud computing’, while only 26 per cent of active cloud-computing users were aware they had used a cloud service.

Why do people refer to different types of Cloud i.e. Public and Private?

Compared with large organisations, small & medium businesses operate in a distinct and highly resource-constrained operating and technical environment. Their proprietors are often time-poor, have minimal bargaining power and have limited financial, technical, legal and personnel resources. It is therefore unsurprising that cloud computing and its promise of smoothing cash flows and dramatically reducing Information Communications Technology (ICT) overheads is attractive to these  businesses.

When it comes to business however, there is an entirely different “cloud”. There are three main categories of cloud computing:

1. Infrastructure-as-a-Service (IaaS) – the base layer. IaaS providers offer data-centre capacity, processing resources and storage (Microsoft Azure,  Amazon Web Services and Google)). This is known as Private Cloud as you set up your infrastructure for your business as you would in your office except you are using the facilities of the above mentioned vendors.

2. Platform-as-a-Service (PaaS) – a layer on top of IaaS. PaaS provides an environment for the development and hosting of applications (Google App Engine, Salesforce etc.)

3. Software-as-a-Service (SaaS) – a layer on top of PaaS. SaaS provides software services hosted from the cloud (Microsoft Office 365, iTunes, Xero)

Why make the move to the cloud for your accounting solution?

When implemented and managed correctly the benefits of cloud computing can outweigh the risks for businesses in the 21st century.

Cloud-based accounting programs allow us to collaborate with you from anywhere in real time, eliminating time wasted in sending us your data and unnecessary double handling of that data.

These programs offer numerous advantages for SME business owners. The most compelling attraction is cost however other benefits include:

  • Access to enterprise-grade technologies at an affordable price
  • Ease of access to applications and data from different computers and devices as needed from anywhere, anytime with a secure connection
  • Reduced administrative and personnel overheads
  • Improvements in cash flow
  • More efficient setup and maintenance of ICT -reduced in-house IT support as the hosting service takes care of software updates, back-ups and recovery
  • Save money & pay for use – pricing structures scale according to the users’ needs and the amount of space you require and you don’t pay for services and features you don’t want. Operating, not capital expense as fees are usually paid on a monthly subscription basis
  • Improvements in computer security, particularly with respect to the secure storage of sensitive information (Mowbray 2009.) Finally, cloud services replace the need for frequent software installation and updates, and their accompanying service downtime.”  Source: “Cloud computing for small business: Criminal and security threats and prevention measures” www.aic.gov.au 2013
  • Save the Planet – Using the cloud can reduce your carbon footprint as you only use the server space you need.  Providers have proposed that you can save at least 30% less energy consumption and carbon emissions than using on-site servers.

Cloud computing can save you money, time and headaches if you do your homework.

This article was written by Robert Ek, Managing Director of Go Systems Pty Ltd.