Canada: The Tech-Savvy Era Of Cloud Accounting – Risks And Benefits

In today’s increasingly digital world, having tools and programs that are as advanced as those of the competition plays a critical role in the success of any business. Cloud computing allows businesses to access their data anytime and anywhere via an internet connection, while reducing the headache of managing accounting records and transactions.

Cloud accounting, which has actively gained momentum and popularity in the past couple of years, seems to be transforming the world of accounting and quickly becoming the wave of the future, if not the present. Having found a way to simplify our work lives as we rapidly charge ahead to the next major project or account, cloud accounting has brought upon a new wave of challenges and opportunities for businesses. From social media to project management, the cloud seems to have revolutionized computing. Let’s step in and explore the plethora of benefits it has to offer, as well as the potential risks.

What is cloud accounting?

Cloud accounting applications are similar to desktop-based accounting software solutions. They offer the same range of capability with only one major difference: the applications run on remote servers and are only accessible via a web browser.

Typically, the applications are offered using one of two formats: hosted solutions or software as a service (SaaS) models. Hosted applications allow you to use your own desktop software and store your data on the provider’s server. SaaS applications allow you to subscribe to gain access to the provider’s software, using a remote session via the internet.

Is it secure?

When it comes to vital and sensitive information, you want to ensure the safe storage of your financial data. Cloud accounting technology provides a more secure method of storing data, since all data in the cloud is encrypted and password protected. “Cloud software vendors keep their servers in data centers in multiple locations under tight security,” says financial writer Greg DePersio1. “Further, such companies continually run security tests, and some even simulate hacking drills to identify vulnerabilities and prevent data breaches.”

Furthermore, since there are no physical hard drives, there is no chance of data being lost, stolen or destroyed in a fire or natural disaster.

What are the benefits?

“Many business owners who migrated to cloud accounting technology have reported cost savings and greater efficiencies in day to day operations,” says writer and business consultant Carrie Smith.2 Here are the top benefits of cloud accounting:

Ease of access – Cloud accounting allows you to access your files from multiple devices, anytime, anywhere. With the introduction of this innovative cloud technology, there is no need to email files back and forth, and you can finally retire your USB flash drives.

Less maintenance – FinancialForce states cloud accounting requires far less maintenance: “The cloud provider completes the backups, updates occur automatically and nothing needs to be downloaded or installed on a company computer.”3 With the cloud completing most of the IT tasks, this leaves you more time to focus on developing business opportunities.

Increased productivity - According to statistics published in June 2017 by BlueHub, a complete cloud solutions consultancy and implementations specialist, 59 per cent of businesses using cloud technology report significant productivity benefits from their IT, compared with just 30 per cent of businesses that aren't on the cloud.4 Offering flexibility, convenience, efficiency and a more connected workforce, cloud accounting vastly improves productivity, which increases profitability.

What are the risks?

Like anything, cloud accounting is not without risk. There are as many downsides as there are upsides to cloud accounting. Here are the top risks associated with cloud applications:

Law violations – According to a technology spotlight article by CPA Canada5, “certain information stored in the cloud may be stored in contravention of Canadian laws, industry standards or contractual obligations of the business.” It is important to ask your service provider if the data is stored in Canada or elsewhere. You are responsible for ensuring the data complies with Canadian privacy law. Service providers are only obliged to follow the laws of the country where the data resides.

Data retrieval – Cloud accounting requires you to trust a service provider to hold on to your sensitive financial data. If you decide to terminate service and transition to another cloud software provider, you may not be able to easily retrieve or export your data. “If the company that provides you with cloud servers goes out of business, your servers are gone,” claims TechRepublic blog writer Thoran Rodrigues. “If your cloud storage provider goes under, your data will probably go along with them. Let's take the example of a cloud data storage service further: if your systems are deeply integrated with your storage provider – very likely in this age of automation and rich APIs (application programming interfaces) – and that provider shuts down, it may be close to impossible to migrate your data, even if you have a grace period.”6

Security breach – Cloud accounting software is internet-based. Therefore, your data lives on the internet, making it vulnerable to cybercrime. “With the passing of time, technology is becoming more and more sophisticated and so are hackers, malware invasions and security breaches,” writes Merchant Maverick’s Elizabeth Cranston. “Though most cloud service providers work extremely hard to keep up with the latest security measures, there is always going to be a risk that advancements in technology will come with advancements in hacking.”7

Will it save me money?

According to business software consultants at BlueHub, more than 80 per cent of businesses have saved money by implementing cloud software. Cloud accounting applications are available on a monthly subscription basis. There are no start-up costs, no annual upgrades, no regular maintenance fees and no long-term commitments. “Companies that use cloud accounting require less initial server infrastructure to store data, and IT staff is not required to maintain it or update the cloud accounting system,” explains FinancialForce. “Fewer overhead expenses and no new software purchases mean greater savings for businesses.”

While some of us are on cloud nine with web-based accounting, others are still under a cloud of suspicion. If you are thinking of joining the modern and tech-savvy era of cloud accounting, do your research and identify the one that is right for you and your team.

Footnotes

1 QuickBooks Canada

2 QuickBooks

3 FinancialForce

4 BlueHub

5 CPA Canada

6 Tech Republic

7 Merchant Maverick

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions