Is Cloud Based Accounting Software Safe?

By Ryan Ayers
Updated: October 03, 2011

Is Cloud Based Accounting Software Safe?

Cloud based accounting and bookkeeping software is being touted as the next advance in business, allowing remote operations and logins and following a model similar to that of other cloud based or hosted business services. But is it safe for your business to store sensitive financial information and client details online and access them from remote locations?

Why Go to the Cloud?

Like just about every other business solution available today, whether computerized maintenance management or video and teleconferencing solutions, cloud based accounting and bookkeeping services offer significant advantages to companies. Making it possible to centralize records and still allow for remote operation and use of your accounting program, this service model presents a few obvious benefits.

Benefits of Cloud Based Accounting:

  • Remote Access
  • Centralized Records and Information
  • Secure Data Storage
  • Client and/or Provider Interaction

Considering the increased access, the opportunity for increased functionality within today’s mobile business environment plays a pivotal role in the push toward cloud based systems in general. Accounting software is the logical extension of this thought process and makes particular sense for businesses that need to keep their financial affairs updated and in shape.

The Logistics of Security

There are several basic parts to the security of a cloud based accounting solution that are actually preferable to having a premise based system.

Physical Security - The main benefit is that all data is typically stored in a hardened and secure environment. Your servers will be protected, typically in an environment that utilizes the same physical security measures as most banks.

Electronic Security - Typically, cloud based or hosted accounting software systems employ secure encrypted connections and/or Virtual Private Network (VPN) connections for particularly sensitive information.

Remote Access – In the past, if employees had remote access to the accounting and bookkeeping systems (and they generally did) they were logging in on an unsecured connection and logging into your company’s premise based servers, which were typically unsecured as well.

A hosted, cloud based accounting software system actually solves many security issues in today’s business world. The capability to remotely log in and access your accounting system is a necessary component, and the fact that security measures are built in on several levels can be a valuable asset.

Finding the Right Partner

The most important factor when deciding on a new accounting software, and determining whether your data is safely and securely handled, is selecting the right provider for your business. More so than with most business solutions, due diligence is required when deciding on the provider for your hosted accounting solution. There are a multitude of options available in the realm of cloud based accounting, and choosing one with the proper security measures in place to fit your needs is key.

Cloud computing technologies may seem like a relatively new concept because of the rapid-fire adoption of late, but they are actually an improvement on existing concepts that have been present in business for some time. Accounting software is among the more logical choices to maintain in a hosted environment because of the added levels of control and security that your business will be able to implement.

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