Cloud-based accounting technology continues to evolve into an attractive idea for Finance. But there are a few reasons why you may want to put the breaks on making the switch.
The cost of cloud-based accounting technology is dropping steadily, and the technology is improving, but there’s still a long way to go before it’ll become the go-to accounting system for most businesses, a recent Forbes article claims. After all, handing your company’s financial information over to a third party isn’t something to enter into lightly.
It’s important to remember that cloud technology is still relatively new, and like all fledgling tech, it still has some bugs to work out.
1. Migration can be a rough move.
One of the biggest problems is that no one’s managed to figure out an efficient way to transfer customer data into cloud systems. This migration problem could mean a drain on your finance team should you opt for the cloud. It’s not only time consuming, but it can also be expensive, depending on the cloud system.
If you decide to make the switch, Forbes recommends keeping your company’s detailed historical financial data in your old system for reference and start a fresh general ledger in the new system.
It’ll save you time and money, and you won’t lose any old data.
2. Less features available.
Once your data is in the cloud, there may be limits to what you can do with it. Cloud accounting systems usually offer far fewer features than traditional on-site systems.
Most cloud technologies include the general ledger, billing, payables and some project and inventory management. Features like purchase and sales order management, deeper inventory controls and automation are still being left to the older systems.
Vendors are aware of this, and some offer hybrid product packages that include on-site systems along with cloud technology so that companies won’t miss any features – for additional fees, of course.
Like the transfer problem, this is something that will most likely change as the technology develops. It may be in your company’s best interest to wait it out.
3. More costly than you think.
Yes, cloud-based accounting technology has come down in price over the last several years. But it may still be more than you think.
Most services for companies with ten or fewer users range from $20-$40 a month. But that doesn’t include payroll services. Add in optional maintenance and support charges, the server your company will need to host the cloud and potential on-site services for extra features and you could triple the original cost.
It’s very likely that your finance department will need to embrace cloud-based accounting technology a few years down the line. Prices will have come down by then and the functionality will be improved. Until then, if your company starts pushing toward cloud tech, just make sure you’re weighing the benefits of the services against the costs.
