quickguidecloudaccounting sr

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Cloud AccounngQuick Guide to

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QUICK GUIDE TO CLOUD ACCOUNTING

When is a new accounng soware soluon required?

While many companies oen get 8-10 years of use or more out of their accounng

soware, all accounng soware technologies are replaced periodically. The reasons

for doing so vary but oen originate from:

• Technology obsolescence

• Organic/Inorganic growth or contracon of the business

• The soware vendor’s product support or direcon

• The business’ management style or team

Time to Replace Your Accounng Soware?

• New product lines or divisions aren’t supported by the old soware!

• We need new operaonal insights and the old soware won’t provide them!

• We need new eciencies in our Finance and Accounng organizaon!

• Our current soware vendor has been sold, acquired or failed!

• They don’t make our old computer hardware anymore!

• Our new CEO wants a more modern soluon!

• Our company has outgrown the old soluon!

• No one knows how to maintain our old soware!

• We made a major acquision or divesture!

• We’ve got to get beer controls!





Accounng technology today is undergoing another signicant transformaon.

Cloud accounng soware provides a dramac alternave to convenonal methods,

pracces and costs. With the latest generaon of technology, cloud applicaons

operate via web browsers on all types of compung devices from personal computers,

tablets and smart phones. Addionally, these newer soluons oer:

- Dierent pricing – Many of the new soluons are oered on a subscripon

basis which can be a more consumable and budget friendly way to pay for

soware. The soware is run on a third party’s data center (not the customer’s)

and usage of the soware is oen billed on a monthly basis. Furthermore,

customers can forgo large, upfront capital expenditures for computer hardware,

systems soware and accounng applicaon soware licenses.


- Several deployment methods – Cloud accounng soluons are frequently

deployed in either a single or mul-tenant fashion. With single-tenant soluons,

the soware is hosted on a cloud (private or public) service. The customer has

their own copy of the soware and their own private databases. In a mul-

tenant world, all customers use the same copy of the soware and their data

may be logically, not physically, separated on a shared server. Some other

variants also exist.




- Scalable soluons – Customers, generally, only pay for the compung me

and storage that they consume. This is in marked contrast to older, on-

premise soluons where costs only went one-way: up. SaaS (Soware-as-

a-Service) products generally permit pricing to move up or down based on

actual consumpon. In the on-premise world, every me your rm grew, youencountered greater soware license and maintenance costs as well as new

licenses and fees for database, systems management and other soware. And, the

costs didn’t stop there. Your rm might have to make expensive capital purchases

of new hardware like servers. With cloud soluons, you don’t get stuck with

permanent, expensive equipment and licenses when your business contracts and,

likewise, you don’t get big spikes in costs when it expands a lile.



Mul-tenant applicaons oer addional advantages. For example:

- Vendor, not customer, maintains the soware – When there is essenally only one

copy of the soware, the soware vendor, not the customer, takes care of patches,

upgrades and new releases of the soware. This can be a huge cost savings to the

customer as these internal labor costs oen account up to 60% of the total cost

of ownership of a more tradional, on-premise soware soluon. Customers can

sandbox new releases and test them prior to their go-live date.

- Opons to add or reject new funconality – New, added funconality is oen

delivered via a seng that a customer must consciously enable. If your organizaon

does not want to use a new feature/funcon, it generally will not be required to do

so.

- Frees IT personnel to work on more strategic acvies – Patching and maintaining

soware, parcularly a back oce soluon, is rarely as important as developing

new strategic technology soluons (e.g., a new mobile applicaon for customers).

By transferring soware maintenance acvies to the vendor, IT can re-direct its

energies and resources to iniaves that can deliver greater strategic value to the

company.






What should I look for in a cloud accounng soluon?

A new lexicon is emerging in the world of cloud accounng soware.

PaaS (Plaorm-as-a-Service) – Your organizaon may want to make

several tailoring choices with your new cloud accounng soware.

It might, for example, want to rename certain elds, add addional

validaon capabilies or all-new elements to the system. An accounng

soluon built on a user-extensible plaorm will be key to these changes.

PaaS Ecosystem – A plaorm that has a wide acceptance in the

marketplace aracts a number of soware developers. These

developers can create addional applicaons, funconality and

more to enhance, extend and power the base accounng soluon.

The ecosystem can complete your soluon in several crical, maybe

compevely dierenang, ways.






Mul-tenancy – SaaS soluons can be single or mul-tenant. Mul-

tenant products may oer the best long-term value to customers

because the vendor maintains the applicaons, not you. And, like other

SaaS applicaons, there is essenally no hardware, systems soware,

etc. to purchase and maintain.

Scalability – Dierent accounng soluons target dierent sizes of rms.

The smallest businesses use one kind of soluon that oen lacks the

sophiscaon, global breadth and power of a soluon designed for the

largest corporaons. Pick a soluon that ts your rm’s size, geographic

reach and unique industry and accounng needs. But, make sure the soluon

can connue to serve you well should your rm experience growth.

Security – Every soluon, cloud or on-premise based, carries its risks.For cloud-based products, ask for proof that the vendor has SSAE 16

SOC 1 Type II, ISO 27001 or comparable protecons and that these have

been reviewed by a competent third party.

Customer References – You wouldn’t hire a building contractor without

checking their references. It’s no dierent in soware. Talk to the prior

customers to gauge their enthusiasm for the product, the support

team, etc.

Mobile – These days accounng data must be portable. Account

representaves need to see and possibly share the most current payment

informaon with customers. Customers want to access their informaon

anywhere, anyme. Your organizaon and all of the constuents it

interacts with have gone mobile and now carry an array of dierent

personal compung devices from laptops to tablets and smart phones.

Social – Powerful social and collaboraon technology is appearing

in modern accounng soluons. These tools enable businesses tocommunicate with suppliers to troubleshoot invoices, shipments, etc.

Finance is also using these tools to communicate with customers and to

tap into internal experts to more quickly troubleshoot problems or get

answers involving specic transacon details.






Vital Analysis is a very dierent kind of technology research organizaon. We are the

intersecon set where exceponal technology market knowledge meets the execuve

suite. Where other ‘analysts’ replay vendor press releases, we give you the:

• impact new technologies will have on your business

• reasons why you should care about specic emerging soluons

• business juscaons why you may want specic soluons

Vital Analysis was carved out of TechVenve, Inc. in 2007 as a new, but complementary

business. As designed, Vital Analysis is the publishing, research and analycal arm of

that company. Our reach, like our blog readership, is truly global. We’ve consulted

with top technology execuves in Australia, Brazil, Canada, the United Kingdom and

the United States. We’ve been briefed by technology providers from virtually every

corner of the planet.

About the Author

Brian Sommer is the CEO of TechVenve, Inc. - a market-strategy and content rm.

Brian closely follows what C-level execuves think, feel and need. Brian also publishes a

blog on the intersecon of applicaon soware and professional services (hp://blogs.

zdnet.com/sommer/). He welcomes your thoughts and invites you to contact him at

[email protected] .

Reproducon of this publicaon in any form without prior wrien approval is forbidden.

The informaon in this report has been obtained from sources believed to be reliable.

TechVenve, Inc. disclaims all warranes as to the accuracy, completeness, or adequacy

of such informaon and shall have no liability for errors, omissions, or inadequacies in

the informaon contained herein or for interpretaons thereof. The reader assumes

sole responsibility for the selecon of these materials to achieve its intended result. The

opinions expressed herein are subject to change without noce. To purchase reprints of

this document or to quote passages within, please email:[email protected].

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