By bluQube (www.bluQube.co.uk)

With cloud-based accounting promising to reduce costs, increase functionality and provide greater flexibility, it’s no surprise that finance departments are the latest business function to seriously start adopting cloud solutions.

Putting your accounts in the cloud can offer a range of benefits over both the short and longer term:-

Lower costs as there is no upfront capital cost— solution is payable on a monthly subscription basis, allowing you to pay for what you use

Take advantage of new and extended functionality such as real-time dashboards

Built-in business continuity as all data is held remotely and is automatically backed up

Less IT infrastructure is required internally

Fewer support staff are required, so resources can be re-deployed for more front-line work

Accounts can be accessed remotely, anytime and anywhere making it ideal for multiple sites or roaming staff

A far more agile technology strategy — with sophisticated cloud accounting solutions, organisations have far greater choice of applications able to talk to the finance system via the cloud. They can easily choose the most appropriate systems for their own needs rather than match their operations to the limitations of legacy systems

The reasons for adopting a cloud strategy are fairly overwhelming, yet there is still some reluctance to make the shift from an on-premise solution that is managed in-house. The arguments surrounding whether your data is safe in the cloud are being easily dismissed as providers are likely to offer at least the same if not better protection of your data than you could manage yourself. Not only that, but in the case of a fire or other incident, you know that your data is safe and you won’t suffer from any downtime.

Are all systems equal?

One of the key issues voiced over cloud based accounting is how it integrates with other key back office systems such as CRM or ERP. When selecting a system you need to be mindful of how ‘open’ the technology is. Not all suppliers are the same so you need to ask the right questions. Does it have the breadth of functionality you need? Will it integrate easily with other critical systems? Will you be able to blend and share data simply?

Due to the popularity of the cloud, multiple vendors are releasing products into the space with such pace that unsurprisingly this inter-operability debate has gathered momentum. And until communities like CCIF (the Cloud Computing Interoperability Forum) are able to establish a recognised and common framework for the exchange of information between cloud applications, many vendors will be either developing workarounds or developing their single-supplier solutions in the cloud, with neither approach really solving the problem for potential buyers.

Make sure that you choose a product that has been designed specifically to work in a cloud environment. If you do not want your applications to be out of sync, then opting for a solution that enables information to be automatically mirrored in real-time is vital if you want to build an accurate and up to date picture of performance.

However, the real bonus of cloud accounting however comes when you consider the implications of what it delivers organisations in the long-term. With solutions able to tackle the interoperability issue, it doesn’t matter what software or hardware choices you make in the future — maintain some on-premise solutions, migrate others to the cloud — these solutions are the ones that will give organisations the ability to really benefit from the openness of cloud by giving buyers greater choice of systems that talk to one another.

If you are focused on streamlining costs and improving profitability in 2011, reaching for the cloud could certainly be the answer. There’s little risk because you don’t have a large capital investment and you should see the results in a matter of months, and it will reduce the liabilities on your balance sheet.

This article is contributed by accounting software vendor, bluQube (www.bluQube.co.uk) which has also recently launched a cloud based accounting solution called inQube.