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.

Featured Research
  • Best ERP Features and Benefits for Your Business

    Are you considering investing in ERP software for the first time? Or maybe you already have an ERP solution but you’re worried it’s becoming dated. If either of the above apply to you, read our latest guide on the top ERP features and benefits based on the size of your business. You may be surprised at how versatile and cost-effective it is becoming - regardless of if you own a small business or run a large enterprise. more

  • 8 Ways the Cloud is Changing ERP for the Better

    What if there was a tool available that allowed for you to save up to a quarter of your operational costs? Studies have shown that Enterprise Resource Planning (ERP) solutions enable businesses to access accurate, real-time information about daily operations which allow for the reduction of operational costs of up to 23% and administrative costs of up to 22%. more

  • 7 key questions to ask any ERP provider

    Having a fast-growing business is good. Having to overhaul your technology every time you need to scale is not. Upgrading to a more complete Enterprise Resource Planning (ERP) solution can help, but how do you ensure the solution you choose is exactly what you need? To help you with your search, we’ve pulled together 7 key questions every fast-growing business should ask before choosing a cloud-based ERP solution, including: more

  • How Finance Leadership Pays Off

    Oxford Economics recently surveyed 1,500 finance executives and it’s clear that small and midsize companies are growing significantly faster than larger companies. But, there are also big opportunities for finance to increase efficiency, boost financial performance, and work more strategically. Why is that? more

  • Professional Services Audience – Improve Profitability Infographic

    As a Professional Services Organization (PSO), you know the importance of customer satisfaction. In fact, 47% of PSO leaders say managing changing customer expectations is their top challenge. That’s why many firms are engaging smarter project management technology, even before deals are signed, to ensure project profitability. How are these leaders utilizing technology? Find out now. more