Despite the growth of cloud-based technology, many accountants are hesitant to move all of their client data and firm management systems online. A survey conducted by CPA2Biz last fall found that 43 percent of CPAs have their doubts about the security of cloud-based applications, feeling “somewhat confident” or “not confident at all.”
And they may not be the only ones: the same survey found that clients are just as reluctant to make the switch. Or are they?
CPA2Biz observed that hesitation on the client side could be “more a reflection of how firms are positioning their service offerings than a reticence to switch to the cloud.” In a recent discussion about cloud-based accounting practices, two modern CPAs said that they’ve found the benefits usually outweigh any concerns.
Christ Fenster of Propeller Industries runs an accounting practice that relies on cloud-based services. But, while he's among those who are leading the change, he explained in a recent webinar that it’s more about picking the right tools than trying to be cutting edge.
Reality check: Offline isn’t so secure, either.
Fenster says there’s no doubt that there are good questions to ask about online security, but says it’s important to acknowledge that there is no 100 percent solution — online or offline.
“In my experience, I think that there’s actually a number of ways where security in the cloud is considerably better than it is offline,” he explained. “Getting [sensitive information] out of the fax machine, off the desktop, out of the filing cabinet, and being able to actually protect it in a place where we have considerably more flexibility in terms of figuring out who has access to it — and controlling access for other people — I think we have a lot more tools that help safeguard security in the cloud.”
He also says that, while it’s always a concern, people spend too much time worrying about hacking. “The challenge with offline security is that you have somebody who can break into your office and steal your checks — there’s all sorts of hazards.”
Make educated decisions about cloud-based software.
The number of cloud-based options available is growing at a rapid clip, which means you have options when it comes to finding services that will fit your business and the needs of your clients.
Fenster says the companies he works with are “typically relieved when we tell them that we’re going to move the whole thing into the cloud and they’re going to have access and transparency.”
In “10 Questions to Ask Before Switching Payroll Companies,” ZenPayroll outlined key points organizations should consider when changing vendors, which include:
- Asking how information is secured in the cloud, and
- Requesting details about where the information is physically stored and how that space is protected.
But experts say that you don’t need to all the research on your own; publications like CPA Practice Advisor can do it for you.
Caution is always needed when dealing with clients’ sensitive financial information. However, with all the opportunities available by adopting cloud-based technologies, don’t let a lack of information or knowledge be the barrier that holds your firm back.
Joshua Reeves is the CEO & Co-Founder of ZenPayroll.