Risks of cloud accountancy and how to avoid them

Cloud Accounting

Risks of cloud accountancy and how to avoid them

Cloud-based accounting software is growing in popularity due to its compatibility with remote working, reducing admin workloads and making paying taxes online so much easier.

With all of its benefits come some drawbacks and risks too, which is the case with all new technologies. Here, we run down some of the most common risks and how to avoid them to make sure your cloud-based accountancy stays problem-free.

Security Risks

Putting your accounts online is, of course, going to introduce new problems to do with internet security and data protection. Anything protected by a password is a hacking risk, so make sure you train your staff on creating strong passwords.

Consider implementing Two-Factor Authentication as well; this often consists of a confirmation code being sent to your mobile number when you go to log in so that even if a hacker guesses your password, they won’t be able to access the accounts. Invest in good antivirus software and malware protection too. Always read the fine print in regards to data loss so you know your rights should the worst happen.

Database Conversion Problems

Changing the location of a database is always going to have potential issues as it’s a complicated and important process that you can’t afford to get wrong. The changing of currency, for example, could result in issues to do with exchange rates if the cloud company you opt for are based in a different country. Filling in the first VAT return after the conversion could be challenging also, especially if the tax status of your transactions isn’t displayed correctly in the new software.

Tackle this by speaking to a cloud software company before you make the change, and make sure you fully understand what changes you will have to implement manually. Always make backups in case data gets lost.

Internet Connectivity Issues

A cloud-based accounting system relies on a stable and secure internet connection – without one, you won’t be able to access it at all. Although this is one of the most common issues, it is also the most easily fixable. Invest in high bandwidth at home or in the office, and avoid working on public WiFi networks. Avoid remote locations if you can, and remember you can use your phone as a hotspot using mobile data if no WiFi is available.

Cloud accountancy has more benefits than drawbacks, but these issues could become more problematic if you don’t act on them fast. If you do your research into reputable cloud software before jumping into the cheapest option, train your staff, and make yourself aware of the risks, you should avoid most problems easily.

For expert advice, contact us at SQK Accountancy today.

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