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The introduction of cloud computing technology has rapidly shifted worldwide consumer behavior and expectations.

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From smartphones to movie streaming, most of us use “the cloud” in our personal lives on a daily basis—even if we don’t know it. But is the accounting profession effectively using the cloud to meet the expectations of today’s consumer?

According to a 2014 survey by Network Management Group Inc. and Insight Research Group, 41 percent of professional accounting firms reported that they were not currently using any services or applications that could be defined as cloud computing, with 31.7 percent saying they are likely to implement a Web-hosted or cloud-based version of one or more of their firm’s tax and accounting applications over the next two years. But is that enough?

When we look at overall consumer behavior, like a recent study by Internet World Stats and Pew Research Center, Internet penetration is at 87 percent for adults, with 18-29 year olds at 97 percent. Given the connectivity of clients and prospects, it’s unquestionably time for accounting firms to understand what the cloud is all about and take full advantage of its benefits.

So, what exactly is “the cloud”? Cloud technology refers to a system of networked computers, servers and data storage that allow information to be accessed via the Internet from anywhere at any time. Cloud service providers maintain the hardware necessary for digitally storing software and data, allowing users to upload and access their information online.

For the tax and accounting profession, cloud services can mean securely storing accounting, billing and time management software online, and using the cloud to store client data and information safely. But in the accounting world, does the cloud really have advantages over traditional methods? Yes, and there are several reasons why.

Flexibility, Convenience and Efficiency

Using cloud technology, you can access your firm’s data without being tied to a specific location or computing device. This is particularly beneficial if you have employees working in multiple offices or client locations. Because information can be accessed from anywhere with an Internet connection, your firm’s productivity and efficiency gets a major boost.

The cloud also gives you an opportunity to extend online access to your clients, giving them the ability to view their own data at any time—a convenience that’s nearly imperative for today’s consumer.

Cost and Time Savings

Moving your firm to the cloud can also offer substantial savings in terms of IT implementation, maintenance and infrastructure costs. Traditional business software typically requires a large upfront licensing fee, in addition to an annual maintenance fee and your own infrastructure costs, while most cloud service providers offer a pay-as-you-go model where you’re charged a monthly or annual fee for use.

Cloud services can also reduce the need for in-house IT staff, as cloud vendors handle server and software maintenance, as well as tech support. Vendors also typically handle system upgrades, which happen automatically, giving you immediate access to updated software.

An important point to note: While analyzing the cost, don’t make the mistake of simply looking at the cloud and adding it to your current costs. Firms that are considering a move to the cloud must be sure to factor in the potential reduction in IT and maintenance spending when weighing the cost of transitioning to the cloud. Indirect costs, such as staff time dedicated to installations, are often missed in cost analysis. Having your cloud vendor handle backup services can reduce costs too, since many firms use an extra server or a third-party vendor for these services.

Safety and Reliability

Even with its potential advantages, it may not be easy for the risk-aware accountant, concerned about the vulnerability of their clients’ personal information, to implement cloud technology within their firm. Rest assured the rapid adoption of cloud services has led to an increased focus on data security.

Security breaches like those experienced by major retailers, while widely publicized, do not reflect the low possibility that a reputable cloud vendor would be hacked. However, it is important to choose a reputable vendor that has been in the business for at least three to five years. Because it’s a nascent industry, vendors do tend to come and go.

When selecting a vendor, it’s also important to ask to see a copy of their third-party certification reports, like the Statement on Standards for Attestation Engagements No. 16 (SSAE 16), or their Service Organization Control (SOC2) audit. These standards were designed in part to test a vendor’s infrastructure—including hardware, software, procedures and personnel, and data—in areas including security, integrity, confidentiality and ability to protect clients’ personal information.

It’s also critical to verify that your vendor provides offsite backup in case of an emergency, such as a fire or weather-related disaster. Cloud vendors not only store data in a centralized offsite location, but they often keep copies of your information in one or two other locations for additional backup. The systems are typically self-healing, meaning that if there is a failure at one site you can immediately access the same data via another location.

Consumer Expectations Perhaps the most compelling reason for tax and accounting firms to make the switch to using cloud technology is remaining relevant for today’s consumer. The widespread use of cloud technology in the consumer space is driving its transition across numerous industries—and that includes tax and accounting.

Because clients and employees will expect cloud services to be the norm, it’s crucial that accounting firms embrace these types of strategies to meet expectations head on. With a trusted cloud services provider at your side, don’t be afraid to take a walk in the cloud to boost your firm’s productivity, efficiency, and competitiveness.

Christina E. Wiseman, MBS, serves as product manager of web services and mobile technologies with the Tax & Accounting business of Thomson Reuters. She has over 14 years of experience in the profession, and works closely with the sales, marketing, training, development and support areas to deliver Web and mobile solutions to tax and accounting firms via the CS Professional Suite.

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