Accountants should have their heads in the Cloud

Does anyone care to remember what a day in the life of an accountant involved five years ago? Asks chartered accountant Charlie Carne.

Here’s a brief recap. Firstly, you would have been permanently based either in the office or at your client’s premises. Any travel time meant dead time. Every file you worked on would have to be printed out and saved in a heavy filing cabinet.

Secondly, it was hard to be proactive with clients. You would have to wait until quarter-end or year-end, when records were completed and sent to you to flag up any bookkeeping issues. That meant you were dealing with problems weeks, or sometimes months, after they actually occurred.

Continued...

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Comments

To a large extent I agree.  I

Maslins | | Permalink

To a large extent I agree.  I set up our practice 3-4 years ago, and from early on teamed up with FreeAgent (a minnow in the cloud market at the time, but with a growing cult following).

The next interesting step will be a proper cloud based accounts/tax return preparation tool, I don't think such a thing exists at the moment.

Security is a concern for some people, after all it is their intimate financial details, and often they don't even know where the data is stored.

One bit I'm unsure I agree with is the extra accounts staff working remotely from home.  Sure, they can attempt to set up their own practice, but that isn't easy.  I don't know how comfortable I'd feel paying someone to do work remotely, though admittedly that's down to trust on my part rather than the IT side stopping it.

So last century!

ThornyIssues | | Permalink

Maslins wrote:

One bit I'm unsure I agree with is the extra accounts staff working remotely from home.  Sure, they can attempt to set up their own practice, but that isn't easy.  I don't know how comfortable I'd feel paying someone to do work remotely, though admittedly that's down to trust on my part rather than the IT side stopping it.

Ah! The British "lord and master" disease.

The answer is simple. Pay only for work done. Agree an amount for a particluar task and completion thereof then either sit back and wait or proactiviely monitor the work via email or better still, webcam.

If you value your data ....

ThornyIssues | | Permalink

... I would NOT use the cloud. We have already seen large security violations and the more valuable data that is stored off-site, the more it become a target for those with ulterior motives. Just not worth it - in reputational terms alone.

 

From an arcticle on this very site ......

The recent debate on AccountingWEB about the pros and cons of Dropbox for exchanging client documents took a worrying twist last week when the online storage service admitted it had been hacked.

 

garyturner's picture

With security, it's important to compare apples with apples

garyturner | | Permalink

@ThornyIssues raises a concern it's worth exploring further.

Just as it would be reckless from a security perspective to sit down at a complete strangers PC to then install your accounting or spreadsheet software to process your clients accounts - and leave all the data on there, so to would it be reckless to use any service, free or not, without taking account of the security implications of doing so, and without vetting the credentials and security of service provider.

Comparing DropBox with good, secure and purpose built cloud based accounting software isn't really comparing apples with apples.

Any accountant who barrels into a service without recognising they have a duty of care to protect their clients - let alone their own reputation - should not complain when said service fails to meet their requirements, is unreliable, unsecure or generally falls short in one or many areas.

I'll stop short of turning this comment into an infomercial, but when the appropriate due diligence is done, I think the point that Charlie Carne makes is that servicing your clients with great, secure cloud accounting software supports your duty of care to service and look after your clients, it doesn't diminish it.

Gary Turner
Managing Director, Xero
@garyturner

DropBox may have been a bad example

ThornyIssues | | Permalink

But still illustrates my point.

The most damaging security breaches are due to either direct insider action or insider knowledge. As Mr Gabriel penned in a Lamb Lies Down on Broadway track :-

"... any rock can be made to roll, if there is enough of it to pay the toll"

The more "useful" is the information which is kept by large (cloud) providers, the more "toll" will be offered.

 

garyturner's picture

Integrity

garyturner | | Permalink

That's actually a line from 'It' by Genesis.

I'm not likely to sway you, but I'll leave with the thought that not every organisation has a price beyond which it throws away its regard for integrity and honesty.

That song has another line "...look across the mirror, son, before you choose, decide"

Gary Turner
Managing Director, Xero
@garyturner

Paul Scholes's picture

Difficult to turn the clock back    1 thanks

Paul Scholes | | Permalink

Like it or not ThornyIssues, the vast majority of transactions, by which I mean any item flowing as information, now takes place over wires, signals and boxes of electronics and, no matter where this is situated, we all now live with a level of risk that someone can access it, without having to kick the door in.  So, my view is, live with it, take advantage of the best systems and make life easier.

I have just been through what Charlie predicts and so, probably 3 years ahead of plan, by practice now runs from home (or anywhere I am), with no office space or cabinets or badly maintained & protected servers sitting in the corner.

Yes all my eggs are now in one basket (aka a data centre in Devon, backed up on another one somewhere else) but then I regard them as far more secure than they were over a year ago.

Keeping my and my clients' information safe & secure has always been of importance to me but it does not dictate the way in which I run my practice, ie it's one of many important considerations.

However in Gary's business (as well as that of my hosting company) it is the numero uno concern, as he knows that the moment there's any doubt over his system's security, his business is at serious risk.  I am happy to rely on that major concern when running everything from the cloud.

A pedant replies .....

ThornyIssues | | Permalink

garyturner wrote:

That's actually a line from 'It' by Genesis.

I'm not likely to sway you, but I'll leave with the thought that not every organisation has a price beyond which it throws away its regard for integrity and honesty.

That song has another line "...look across the mirror, son, before you choose, decide"

Gary Turner
Managing Director, Xero
@garyturner

Yes, it is indeed a line from "It" ... the last track on Lamb Lies Down On Broadway by Genisis of whom, Mr Gabriel was a member if I recall correctly. No, you are not going to sway me because I know how easy it is for company insiders to get valuable information or those with inside knowledge get at information in transit. While that won't concern too many readers on here with small practices, it could have an effect larger ones. For a small to medium sized practice, what is the difficulty in running off-the-shelf back software on a couple of machines and an external drive I ask. Broadband is a lot less reliable than that!

 

garyturner's picture

Apologies

garyturner | | Permalink

My knowledge of the Gabriel era Genesis discography is patchy.

I respect your right to remain unswayed and while the prospect of debating 'what is the difficulty in running off-the-shelf software on a couple of machines and an external hard disk' is like catnip for me, please know that I'm summoning all my energy in desisting.

Go well.

Gary Turner
Managing Director, Xero
@garyturner

squay's picture

Cloudy? Its Fine Here!

squay | | Permalink

We became converts to cloud technology this year. Immediate advantages have been switching our web browser to Google Chrome and viewing our emails through it's GMail system. Because this is cloud based our emails and calendars can be viewed from any desktop or laptop. Previously we had always had problems keeping the machines synchronised. 

Secondly we were impressed with Xero and decided to trial it. Last June I became a Xero Certified Adviser. The fact that we can log in from the office or home, anywhere in fact and access the same shared data in real time with a client is very satisfying and has changed the way we work. To get a call (even out of hours within reason) and be able to log in and correct a client's problem within minutes helps the client accountant bond enormously.  We're also migrating some of our once-a-year clients into monthly (continually updated) clients and this will help us to change from being re-active to pro-active.

Having said that we still have desktop applications because there is either no cloud equivalent or the cost would be too high to convert (often an optional extra). But we are open minded and over time I expect to see more cloud based solutions to explore. Can't wait.

Stephen Quay

charliecarne's picture

Cloud security    1 thanks

charliecarne | | Permalink

Quite rightly, the issue of security remains the key area of concern for most people. I sometimes wonder whether this is a case of “a little knowledge is a dangerous thing”. It is natural to think that we will take better care of our sensitive data than a third party, but will we? Can we? Do we really have the expertise to manage this ourselves? If you run a large business or accounting practice, you may well hire an internal IT expert (or even a team of them if you’re big enough) to manage your network security constantly, but a smaller practice doesn’t have the resources to do that, so they outsource it or (oops) try to manage it themselves. How many small practice owners and, just as importantly, all of their staff who leave the office with a laptop understand the security implications of using that laptop on a client’s network or in a Wifi hotspot? Would they even know that the guy in the corner at Heathrow departure lounge has hacked into their laptop over the unsecure Wifi network and is quietly accessing all of their data? And this ignores the obvious risks of leaving the laptop unattended or losing a USB key. One of my clients only discovered that their office Wifi network had been hacked when their broadband provider told them that they’d exceeded their monthly download allowance and a check of data consumption on each PC revealed that someone else must have been responsible for the excess. That person or persons may only have been piggy-backing for free internet access, but who knows whether they also tapped into confidential data? And yes, my client was using the usual Wifi security protocols; but those used in the standard small office network simply aren’t strong enough to withstand much of an attack. We no longer use Wifi in our office to access our network for this very reason. Our Wifi connection only accesses the internet and is completely independent of the office network. I can’t wait until my entire network is hosted in the cloud and I can pass the headache of maintaining it to someone else for whom security is a 24 hour a day priority.

As has been pointed out above, consumer-focussed data sharing systems and social networks (around whom much of the fears of the cloud are based) are not designed to be as robust as cloud bookkeeping solutions from reliable providers, which often use levels of encryption and other security protocols that are as strong as those used for internet banking (which most of us trust). Accessing a secure environment over a secure internet connection (eg https) gives me more confidence than sending staff out with unsecure laptops containing sensitive information or connecting my office Wifi to my network or even emailing sensitive data. There will be some of you who maintain extremely robust internal security protocols, don’t allow staff to use unsecure Wifi networks and are confident that all of your staff understand the risks and follow protocol; if so, that’s great, but I suggest that you will be in the minority.....and anyway, how does this allow your staff and the client to always work in real-time on the same data? And, if you open up your office network to clients to let them access the same database, you expose yourself to the risks described.

bainbridgelewis's picture

We too are Xero certified

bainbridgelewis | | Permalink

We too are Xero certified advisers and love the flexibility and ease with which we can deal with clients. We are a fairly new practice only 2.5 years old and we constantly strive to make everything we do portable for efficiency and to allow working from home or on the train etc.

I agree with @charliecarne in that there is not at the moment a cloud application for tax returns or accounts prep, what we'd really like to see is an integrated system than can manage your database and remind you of deadlines etc but also do tax returns and accounts prep. There surely must be a market for this!

Paul Scholes's picture

Cloud full stop

Paul Scholes | | Permalink

The above describes exactly my own experience over the past 10 years or so.  Despite firewalls, security software and an external support company that regularly dialled in, we ended up being used as a spam server on two occasions, and that was without wifi.

I used to spend weeks a year of my own time mainitaining and firefighting the IT infrastructure in my tiny office, including bloody backup software and hardware that had a mind of its own and Windows SBS software updates that regularly brought the whole thing to a halt with a blank screen telling us for hours that it was on number 5 of 11!

One of the key deciding factors in having all my stuff hosted was cost, ie the difference between a new server and all the related bits or £xxx per month.  Today, 16 months later, with what I know know and experience daily, I wouldn't go back to DIY even if the hosting cost was double the DIY solution (but don't tell Hosted Desktop UK).

If you are genuinely frightened of, and don't use, internet banking, then fair enough but don't knock it till you've tried it and, as Charlie says, don't use security as an excuse unless you can show your systems are more secure and reliable that a primary data centre.

 

 

 

Paul Scholes's picture

Cloud based accountancy solutions

Paul Scholes | | Permalink

bainbridgelewis - you are right, this will be the next step but don't expect the same sophistication that you might get with something like Iris or Digita, the software houses will have to start afresh, from the bottom, to build slicker systems than they currently supply.

In the meantime you can run your entire practice from the Cloud by just having your current software loaded directly to a hosted environment.  Our Iris system, as well as Quickbooks, Office and even Internet Explorer are quicker and far more reliable now than they were when they relied on the box in the corner of my old office.

I hope ...

ThornyIssues | | Permalink

... your PII covers you because most "cloud" based repositories that I have looked at have a "best endeavours" get out clause. Something else to think about!

 

Accounts staff working from home

ShaunSpalding | | Permalink

"Agree an amount for a particular task"

I am also a schizophrenic being both a sufferer of the last century lord and master disease and also a horizon scanner for seeing where the trend for "employing" accounting staff is heading.

Is there any consensus on what percentage of the Accounts fee is being agreed with work-at-home/subcontracor staff? Also, does there tend to be a financial penalty built in for if the draft accounts are not delivered by a set deadline day? 

Thanks.

Paul Scholes's picture

PI cover    1 thanks

Paul Scholes | | Permalink

Thornyissues - good point, might contact my broker, given the increase in security over what I had before, it might mean a discount on the premium - thanks.

Or...I could just put the kettle on and keep a life.

Locutus's picture

The cloud

Locutus | | Permalink

Over the past 5 years, I've gone through most of the journey that Charlie describes.  In the last couple of years, cloud-based accounting software such as Xero has become a viable alternative to the desktop based alternatives of the 1990s.

I've been essentially paperless for around two years now and it is quite a liberating experience once you have confidence about backup of data - mine is both in the cloud and local.

In the past I've seen servers that won't reboot (several times actually), backup programmes that tell you the backup was successfully completed but the tapes wouldn't restore when you really needed them and IT "experts" that charge a fortune but turn out to be complete muppets.

With the help of the cloud I feel more confident about data backup than ever before.

Security has to obviously be taken seriously but like others, can I really ever "hand on my heart" say that my own solution in the past was more secure than the most of the cloud solutions on the market at the moment.  After all, if they don't consistently keep the data backed up and secure then they are out of business ... no second chances.

I'm looking forward to using the cloud further in the coming years.

Right idea, wrong implementation

waltere | | Permalink

ThornyIssues wrote:

Ah! The British "lord and master" disease.  ...proactiviely monitor the work via email or better still, webcam.

Monitoring your staff via webcam?  Are you serious, ThornyIssues, or did I miss your ironic intentions?  Once you've agreed a price for the work (and a completion date, of course!), why not just let them get on with it?  Would you really want your clients spying on you while you do their accounts?  What business is it of anyone if you do your best work at 2 a.m, so long as you do it?

You may have taken ....

ThornyIssues | | Permalink

"monitor" too seriously! There are two connotations here. One is remote working of employees in which "monitor" via webcam is akin to having the employee in the same office. A virtual "bum-on-seat" if you will. The other is of course true outsourcing of work where "monitoring" has less of an "employee/employer" relationship and more of "how are things getting along?" face-to-face.