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Seven Signs to Move Finances to the Clouds

This article was published in the Atlanta Journal-Constitution on February 3, 2013

Seven Signs to Move Finances to the Clouds

Small, large businesses can gain efficiency in their accounting.

By Chris Smith

Cloud computing is streamlining the way many businesses work today. With software and hardware that can be accessed as services via the internet — rather than assets that must be purchased — businesses small and large can more efficiently utilize resources.

Cloud computing is particularly effective in the growing trend of outsourced accounting. Here, a certified public accounting firm can run an entire accounting system securely via virtual and remote processing. In providing this service to our clients, we have found that they experience a broad range of benefits with outsourced accounting. For example, a client was struggling with poor cash flow. Once hired, we discovered that inadequate business processes were leading the client to double pay vendors and delay customer billing. We customized automated business processes to meet the client’s needs through a cloud-based solution and created dashboards so key decision makers can better monitor the business’s operational efficiency. In the first year, this client reduced its debt by more than a third and doubled net income on the same approximate revenue base.

Whether you are a business owner who is overwhelmed by the paper invoices cluttering your desk, you simply don’t enjoy doing the day-to-day accounting or you need an advanced level of accounting expertise, it may be time to change the way you’re dealing with your company’s finances.

Here are seven signs that it’s time to move to the clouds.

A big event has or is about to occur. From a financial standpoint, often a big event is when the bookkeeper quits or is fired. Sometimes it’s when rapid growth occurs, or when the company moves to a new facility or is becoming more geographically disbursed. When any of these things happens, a business owner or manager will search for a solution. If the solution includes thinking outside the box and working with external consultants to provide outsourced solutions, the transition to the cloud will be an easier one, because the business will be utilizing the CPA firm's secure private cloud.

You’re having staffing issues. Business owners know their industries, but they don’t necessarily know much about accounting — and that makes it challenging to hire a qualified accounting professional. And there are other considerations, such as continual turnover, human resources issues, and even theft or fraud. If you are faced with these concerns, outsourcing can provide services offered by qualified professionals without having to hire additional, highly paid personnel or worry about any inefficiencies that may be discovered later.

Operational costs keep growing. In the era of doing more with less, efficiency is important. If you’re looking to trim costs, your business can save money on the health insurance, payroll taxes, physical office space and other costs a full-time employee would incur by utilizing an accountant in the clouds. Plus, you can share — and reduce the cost of — infrastructure. With outsourced accounting, you gain access to business management software, like customized SharePoint solutions and off-site backup of financial information.

Your key decision makers are flying above the clouds — a lot. When information is stored in a fixed location, like your office, you lose access to that information when you travel. But once you’re in the cloud, you can access information anytime, anywhere. One of my clients, who travels a good bit, likes the idea that he could be in a hotel room in Germany and get access to his information instantly.

Information is falling through the cracks. If you find that you’re not getting financial information in a timely manner, such as financial reports that are not available when needed, or that opportunities are missed because accounting information is not easily accessible, outsourced accounting can help. Additionally, if you rely on email to monitor progress on important projects and find those projects getting lost in the inbox and not remaining top of mind, solutions like SharePoint in the cloud provides a way to view projects and review their status in real time.

Little or no time is devoted to strategy. Some businesses try to save a little money by hiring a bookkeeper, but they often are missing the key element of analyzing a business and its finances. Not every business can afford to hire a CFO, but that expertise can be had with a qualified outsourced accounting firm. On the other hand, businesses with CFOs in-house often find that those individuals are too overwhelmed with day-to-day accounting tasks to focus on strategic planning. A CFO is needed to help keep the business on track. Budgets, day-to-day accounting, forecasts and even information technology are services that a specialized accounting firm can take over in the clouds for a business.

You notice that you have a lack of knowledge diversification. Businesses need a variety of expertise, including counsel on accounting, human resources, tax laws, tax savings and more. Rather than hiring new staff that may or may not have the desired expertise, the collective knowledge from a CPA firm can provide these resources or arrange for them to consult with your business.

Before signing on with an outsourced accounting firm, it’s important to have clear documents, reviewed by an attorney, that explain what you’re laying out for an outsourced service as well as the terms and conditions you expect will be maintained. And while accounting in the cloud may not be the joyful experience of flying above the clouds, it certainly can provide peace of mind.

Chris Smith, CPA, is the owner of CB Smith & Associates, P.C. and a former corporate controller.
He has offered cloud accounting services since 2006.

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