Is Your Business Headed For The Clouds?
No, I’m not talking about your future hopes and goals for your bookkeeping business. I’m talking about all the buzz surrounding what’s called “cloud computing,” and how it is affecting the way we work with our clients.
Technology is moving quickly, and since the vast majority of freelance bookkeepers perform their services using a computer (as opposed to manually with pencil and ledger paper), this is important to understand and prepare for, because it’s coming fast. In fact, it’s already here!
What Is It?
In reality, you are probably already using cloud computing yourself, if not using it with your clients.
Here’s a simple definition: “The term cloud is used as a metaphor for the Internet…Typical cloud computing providers deliver common business applications online which are accessed from a web browser, while the software and data are stored on servers.” (If you’re the techie type, you can read all the gory details on wikipedia.org)
In practical terms, this means software applications that are web-based are what’s known as a SaaS (software as a service) and/or virtualization. QuickBooks Online Edition is an example of a paid SaaS, and Gmail is an example of a free online application.
Here’s a 5-minute video that explains how cloud computing works.
How Does This Affect You?
We’re going to see more and more “cloud” software and services everywhere, and for good reason. More and more people are working together virtually, whether they are physically located across town, or across the globe.
Having anytime access to vital software applications is not only convenient, it is especially practical for business owners who do a lot of traveling. They can work on cloud-based software from any computer with Internet access. This is more productive and efficient. It is also a great way for you to work with your clients when keeping their books.
But it’s not without it’s downside too.
Cloud Resistance
When first introduced to the concept of using a bookkeeping program (such as QuickBooks) as an online service or on a hosted server in the clouds, most small business owners are initially afraid. They fear that their sensitive financial data is not safe and secure if it is residing “out there somewhere” on the Internet.
While care should be taken when choosing an application hosting service (when using QuickBooks desktop softare on a virtual server), generally speaking, hosted applications are far more secure than what our clients currently have in place on their own in-house computers.
Some clients are comfortable moving forward with new technology. Some will resist it for years to come.
What To Do About It
There are opportunities to be pursued, depending on how you want to position your business and the clients you want to serve. Cloud computing will continue to grow. Decide on how you will provide your bookkeeing services, and then pursue the clients who are in sync with your business goals.
Here are a couple choices:
1. Embrace the new technology and work virtually (or more virtually) with your clients.
If you’re not already working with clients on a virtual basis, but instead, are shlepping to their office to work on their computer to get the books done, you will find that you will become much more productive working from your own office. You save time and travel expenses, and you can serve more clients in a day or week than you can if you work on-site.
You may also be able to raise your rates, as you act as consultant and guide your clients on how to work more efficiently and conveniently by not only using QuickBooks (or other bookkeeping application) in a hosted environment, but also other key business applications if they have workers who are telecommuters or physically located elsewhere. You’ll be educating your clients on how taking advantage of cloud technology reduces costs and increases productivity in a convenient way. That’s a valuable service you can charge for.
(Can you guess which side of the cloud I’m on? 
)
2. Stick with the “old fashioned” way, and specialize in what is most comfortable for less tech-savvy clients.
There is a significant segment of the small business market (mostly small mom and pop type clients) that is rather leary of new technology and will not want to have their financial records anywhere else except “safely” in their own office.
By catering specifically to that type of client, you can build your business quite easily, since there will always be some who will prefer the lower tech option and the relationship-building face-to-face service provider.
Make Your Choice And Run With It
Providing bookkeeping services through the Internet is only going to expand and grow with time, as more and more small businesses will become dependent on the clouds to handle more and more operations.
You just need to decide how much you want to get involved and be ready to seize the opportunities that emerge either way. There are plenty of opportunities to go around. You just need to pick one and run with it.
So tell me, will YOU be taking your business to the clouds?
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Recommended Resources:
QuickBooks Online Edition – not as robust as the QuickBooks desktop software, but useful for virtual businesses that have multiple users who need real-time access from remote locations (including a bookkeeper).
Right Networks – secure and stable application hosting service QuickBooks and other “off the shelf” desktop software applications
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Some of the above are affiliate links.
15 Responses to “Is Your Business Headed For The Clouds?”
Crunchers Bookkeeping Franchise on January 14, 2010
Interesting article…I wonder for the majority of micro and small business clients is they really care about online or offline because they don’t really want to do their books?
Gabrielle on January 21, 2010
Epic,
Yes, I agree with you! Overall, I think the opportunities are much greater for those who are embracing the new technology and run with it, because it’s moving fast!
If you didn’t hear about it, Intuit (the makers of QuickBooks) and Microsoft just teamed up to build buisenss applications “in the clouds” for small businesses. So this is something we really do need to pay attention to if we plan to provide virtual bookkeeping services using web-based software.
http://www.microsoft.com/presspass/press/2010/jan10/1-20intuitdeveloperspr.mspx
EPIC Virtual Business Solutions on January 15, 2010
I am in the process of starting my virtual bookkeeping business. I am glad to know I am on the right path. Going virtual just makes more sense. You open yourself up to a larger target market. You have to educate your clients on the benefits of working virtually. Once educated they too will jump aboard the virtual cloud.
Sheri-Lynn Fournier on January 15, 2010
Thank you for your article. I started my business in 2005 and have continually worked towards making it a virtual business. The majorinty of my clients are virtual clients where I either log into their system remotely or keep the books fully on my system and provide reporting on a regular basis. My goal is that even eventual employees will work remotely from their home offices. I still encounter some resistance, but for the most part am able to show my clients the benefits of my not being in their offices.
Gabrielle on January 21, 2010
Sheri-Lynn,
Good for you! Excellent! You are on the right path in how your thinking about your virtual team. There are many companies working exactly as you describe. It’s just the way many small businesses are headed, and the Internet it making it easy to work from virtually anywhere (where there’s a good Internet connection)
Elena on January 16, 2010
I have one client who is virtual, but that is because they are very simplistic – their docs (which consists of 3 bank and credit card statements) are e-mailed and/or faxed to me because they are set up to send me info this way. However, I have other clients where I either do have to work at their place or pick up and deliver back work because there is no other way to access their docs. One doesn’t even have a fax machine and couldn’t possibly scan every little piece of paper needed for me to input information.
Gabrielle on January 21, 2010
Elena,
You are absolutely correct. Even with many small businesses that are moving forward with technology, you will also find many small businesses that prefer to keep it low-tech. I just think we will start to see more and more either on one side or the other of technology, with a widening gap.
But ALL businesses need bookkeepers! So it just means that we need to be clear about which type of clients we like serving most! And then capitalize on that area. In other words, I do not think we should attempt to be all things to all businesses, since that will actually slow us down.
Lake on January 17, 2010
Gabrielle,
Good article. It would be great to see more on this subject. For example, the technology to use to have clients get their information to you instead of pick / deliveries or faxes.
It would be good to know if bookkeepers have changed any of their internal controls / procedures once they go virtual.
Gabrielle on January 18, 2010
Great questions, Lake. And you will want to stay tuned. This is a hot topic that I plan on expanding for you all soon.
I’m just running to keep up with it all myself! But just to tease you a bit, specifically on what you are asking about, I’m planning a free webinar in March that will show you a very cool way to handle the information pickup issue. 
Marsha Fortner on February 15, 2010
Any suggestions to ensure payment to online bookkeepers? Because of the distance involved and customer maintains control of their books via remote access bookkeeping, how does the online bookkeeper make sure she is paid?
Gabrielle on February 15, 2010
Marsha,
The quick answer is that you work off of a retainer. That means the client pays you up front, or at least part of your fee is paid up front. You can do this online using PayPal, among other solutions. I also HIGHLY recommend that you do not take on any clients without a signed engagement letter, so everyone is clear on expectations all around, including when you expect to be paid, and that all work will stop when an invoice has gone past due. All of that should be agreed upon BEFORE any work begins.
Runno on February 15, 2010
Very nice article, Gabrielle. I also think that working on a cloud in 2010 is inevitable for almost any business. I am currently researching a similar subject, to get an understanding of what are the tools and options for small accounting businesses and bookkeepers to take full advantage of web-based software to enhance their business.
I understand that there’s still some bookkeepers that are bound to do it the “old-fashion way”, as you describe it. Still, even then, isn’t it safer to at least have a backup of all your customer files and documents in a digital format? Now, if you’re already saving your documents in a digital format, why not automate the whole process and share data directly with your customers in order to keep everything organized from the beginning?
Is there currently any software available online that you could recommend for this?
Gabrielle on February 17, 2010
Rumo,
The bigger issue in everyone’s mind when you’re dealing with financial information is not so much keeping it organized (although, as bookkeepers we know how important that is), it is security. We, as the service provider, need to make sure that we are providing a secure environment for sensitive financial information sharing for our clients (the IRS and some states now have new stringent rules about that too for CPAs).
Sounds like you are working on some new software application development. Both with virtual desktop situations and with document management software, the #1 consideration is security, then it is ease of use and automation. And no, I don’t know of a program that fits your description. What we are facing more is being able to get not only digital information from our clients (that’s actually the easy stuff), but also the physical documents from them all in one place.
Runno on February 24, 2010
Thank you for the feedback Gabrielle. Could you explain me what exactly do you mean by security? I presume that it’s something to do with how to store data (digitalized physical documents) that you have received from your customer(s), in a way, that it is always safe and not accessible by anyone else than you and your customer(s)? Did I get it right?
To further cultivate your suggestion, the biggest problem we face is sharing documents by e-mail and/or other digital formats that do not provide such a security?
Now, when we are focusing on web based document sharing software, excluding actual desktop accounting software, do you think that the Secure Sockets Layer (SSL), provided by some online service providers, could help to solve this problem? In case you’re not familiar with SSL (here’s a Wikipedia link for you: http://en.wikipedia.org/wiki/SSL_certificate), what it basically does, is that it secures the connection between your web browser and the server your web software uses to store data. It means that whenever you are in a SSL secured environment, everything you do, every file you up or download, is fully secured. It is a special licence that could be included in a software you use to share and organize your documents on the web. However, this is not the same when people are exchanging files by e-mail. Then, it’s usually up to every party to decide whether to crypt the data or not. In most cases, people either don’t pay any attention to it, or it is not provided by the email client server they use.
Your other comment about getting not only digital, but physical documents from your clients, seems more challenging, but definitely also possible to solve. There are already some applications on the web that could help you do that. One web site, that I recently came upon, was Shoeboxed.com. I think that what they do is that they ask their customers to mail them all their documents, which are then converted into a digital format. Then you can store or use the data however you want it. Does this apply to what you question? Again, I have no idea about the security issues when it comes to sending original documents by post or regular mail.
This raises another question I have – do you always need a physical document when you already have a digital copy? Would it be enough, if the document is just faxed, or scanned? The numbers etc. should always be traceable and it’s just so much easier to organize this data in a digital format than on paper. You are also able to print it out whenever you might need it. Or do you always need an actual physical original document for every digital copy? In this case, how often do you need to collect these documents and are you converting them into a digital format right now or do you just store them in your library?
Gosh, this came pretty long. I am sorry to shower you with all these questions. Hope you don’t mind
By the way, you are correct, I am working on a project similar to your description, but I really do not want to use your blog space to promote something that is not even ready. I’d rather listen and learn to create something people like you and other bookkeeping specialists could really use to add value to their business and service. It feels pointless to develop something that does not actually benefit your customer. I find your feedback very valuable. I wish I’d get more of it 
Thank you.
Runno
Gabrielle on March 8, 2010
Hi again, Runno.
You sound like you are starting to get the picture regarding what it’s like in the “trenches.”
The biggest issue with security is not really the technology, but the perception. Many, many typical small business people still feel it is “safer” to have all their financial information on their desktop computer, or physical paperwork in their own office. They are uneasy about having their financial information “out there” somewhere on the web. When, in fact, as you describe, there is often much more security with the SaaS products and virtual desktops. It just doesn’t feel that way to most of us (even when intellectually we know better). It’s a perceived control issue.
Document management IS catching on, but it has been slow. And scanning lots of documents, in itself, can be time consuming. As freelance bookkeepers, no, we do not need to have physical documentation if we already have digital documentation. But often, our clients are not necessarily keen on taking the time to put physical documents into digital form if it is just as easy for them to give us the physical ones. But it’s happening, as the benefits of storing information digitally becomes more convenient and easier to manipulate. It’s just not as encompassing as so many software companies and others who live in the high tech world imagine.
You are wise to be reaching blogs such as this one where you can better understand what is really needed in the small business, mom and pop market. I’m glad you’ve asked these questions. Thanks for contributing your perspective.