To Cloud or Not to Cloud


Yes. The End!

Just kidding, let’s dig into why some firms have been reluctant to adopt cloud technologies and address the most common fears. The views expressed in this article are my own, may be considered controversial, and academic debate is welcomed.

Firms that have not adopted newer software as a service, or cloud technologies, are already behind the curve. The rate of change in technology is only increasing, so adopting this next level of tech is step one to not being too far behind to catch up. Meanwhile, we have had cloud accounting technologies for close to 20 years.

The most common fears I hear are as follows:

  1. Security is not good enough and will expose my client and myself to increased risk.

First of all, the security on your desktop program is crap. If you have a server room, someone in the right clothing could probably walk straight into the server room as a fake IT person and download all of the financial data. If it is on your laptop, that is an easy item to just steal. You are probably thinking in your head “yeah, but I have really strong passwords on everything.” Well, I can tell you from the experience of having to hack into a client’s old accounting system that a simple password breaker script could probably find even your best password in 48 hours. And desktop programs lack dual authentication.

All cloud-based software companies that are doing business in Europe have to abide by the GDPR requirements of the EU. These security protocols are greater than the majority of US banks employ for their online banking systems. The US based tax software has also adopted better than bank-level security and encryption. Let me break down the basics of cloud technology and encryption in an oversimplified explanation easy for consumption.

The “cloud” is just distributed servers accessible over the Internet. There are companies, like Amazon Web Services (AWS) and Microsoft Azure, who have server farms all over the country, and all over the world. These server farms are where the software is housed as well as the data files to use the software. The data files are encrypted with keys. The data files are also distributed on multiple locked servers. The first line of defense is the key that is associated with your login to the cloud software. If a malicious hacker got through the overall server encryption and acquired your data file, they would have to decrypt it, which is intensely difficult without your key. Also, they would have already had to hack through multiple different security protocols on multiple different servers (not knowing which servers hold your information) to piece together a full data file to access your information.

Now you understand why you get a million phishing emails. It is much easier to get you to give them your password than it is to acquire your cloud information through direct hacking.

  1. My clients do not want a change in systems.

Your clients will learn about efficient, more accessible and integratable software, with or without you. If it is not from you, then it might be a much harder conversation down the road. Change is difficult and frequently when I hear this argument, it is because the accountants themselves are afraid of the change and using the client as an excuse.

The easiest way to handle change, is with a strong change management plan. The foundation of that plan should include three things: First, a change sponsor at the top of the organization supporting the new technology and a change champion in the middle of the organization that will be handling training. Second, consistent communication about the timeline, individual responsibilities, training schedules and every other update on the change. Third, the plan needs redundant training for every single person affected.

  1. Cloud tech is just a fad.

This is a false statement. Software programs will only evolve to be more reliant on distributed computing and servers all over the world. There is safety in redundancy.

  1. I will lose historical information.

This fear is two-fold. First, some people believe that any change in system requires a cut-off in the future where old information is dead and lost. Second, some people believe any information not loaded into the new system is lost. However, that historical data can be stored locally, and the start date forward gets loaded into the cloud platform. We load an average of two years of historical information into any new systems. We generally keep records for seven years, so the three year+ old historical information is saved in a file stored on Microsoft SharePoint for my team to access if required.

Some of my favorite cloud-based technologies for tax firms include:

  • CCH Axcess – for larger tax preparation
  • UltraTax – another robust tax prep system
  • Intuit ProConnect – great for small tax prep
  • Citrix ShareFile & RightSignature – this system is a file share server and works well with integrations into other tax software
  • ReGroup Tax – allows for tax journal entries and workpapers with direct upload to CCH products
  • Canopy – focusing on practice management, they help tax firms with efficient workflows and storage
  • Jetpack Workflow – a project/practice management application with built-in tax workflows
  • Xero – they offer a $3/month ledger version to accountants for bookkeeping clean-up and write-up work to flow accurate accounting into the tax software

Now go adopt some great cloud technologies!

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Liz Mason is a serial entrepreneur, a giant nerd, and an involved accounting vanguard. She is the Founder of High Rock Accounting, Rebel Rock Accounting, TheDepartment.Tax, and a few other related brands. Liz speaks on a national stage, guests stars on podcasts, and writes frequently. To further her passion for the advancement of the accounting profession, Liz currently serves as a Xero National Ambassador and as the Content Strategist for Tax Practice News. Liz started her career in tax at Grant Thornton (at 20) and automated a portion of her job landing her in the national tax practice. She spent a decade in large public accounting firms working on highly technical tax consulting before branching off on her own. Liz utilizes her creativity and passion at her company to uproot traditional practices and replace them with innovative concepts. She finds joy in efficient technology and her core belief is that everyone and everything can continuously improve (she says "be better" too often). When Liz isn't planning world domination in accounting, she is a die-hard skier, down for any adventure, plays the ukulele, reads everything, and has a good sense of humor. If you're looking for her, you can find her traveling the world and enjoying new food and cultures with her young son. Follow Liz and High Rock Accounting on Twitter at @LizzyNorMa and @HighRockCPAs.