Last week here in New England, Hurricane Irene showed us how a “weakened” storm that scored low in the hurricane rating scale can still inflict tremendous damage to individuals and businesses.
Imagine if your office and accounting system were among those destroyed in the storm. Would you be able to place purchase orders, invoice customers, and receive customer payments? To reconstruct your system, how long would it take and how much would it cost in extra staff time and systems cost? Would you prefer to instead focus on customer relationships, supply chain, and taking care of your family and home? If you lost your paper records, could you pass a year-end CPA audit or an IRS audit without Herculean effort and some luck? With bookkeeping in the cloud, this would be one less risk to worry about.
Even if your computer network has a good offsite data backup system, flood or fire could destroy critical paper documents kept in the office. It is prohibitively expensive to buy fireproof filing cabinets, redundant computer networks, waterless fire suppression systems for server rooms, electric generators, and all the other things you would need to buy and maintain in order to prevent a disaster from taking down your accounting systems. Alternatively, relying on a disaster recovery plan to rebuild systems after disaster strikes has its own set of risks and costs. Small and midsize businesses simply can’t duplicate the kinds of business continuity and disaster recovery systems used by big businesses.
Bookkeeping In The Cloud
The good news is that with the rise of cloud computing, small and midsize businesses now have access to systems which provide business continuity in addition to the more widely touted benefits of ease of access and reduced IT costs. This now extends to accounting systems and document management systems which can operate in secure, redundant datacenter environments rather than on computers in your office. For example, the QuickBooks hosting company used by most SmartBooks clients has multiple physical and electronic security measures and backup systems, uses banks of hundreds of redundant servers, has diesel generators to power the facility, has multiple internet services providers, and has automatic fail-over to a sister facility on the other side of the country.
Of course you must still do your due diligence on the various cloud computing solutions to understand the risks of particular systems. You may still want an independent backup such as periodically copying files to a CD and storing it in a safe, or storing an electronic copy on a separate computer network. You want to be careful about being locked into proprietary technology with high switching costs.
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