Keeping Business Records in the Cloud

By Thursday Bram on 22 March 2010 (Updated 25 April 2010) 0 comments
Photo: Henrik5000

Many businesses have made the switch to maintaining records electronically, but there's a step beyond simply getting all your records on your computer: putting them in the cloud. There are many benefits to having your business records in the cloud. You can access them from anywhere that you can find an internet connection, and you can keep your computer hardware to a minimum. However, there are some drawbacks as well — security remains a key concern for many businesses considering keeping their records in the cloud.

Why Use the Cloud

Dallon Christensen operates FirstStep Concepts, a business coaching firm. He has committed to maintaining all of his records in the cloud and actually relies entirely on software that is web-based. Christensen explains the logic behind his choices:

I was inspired to use web-based applications for three critical reasons. First, the applications deliver excellent value for the functionality they provide. A program like Google Apps provides essentially all of the functionality I need for word processing and a large amount of the functionality for spreadsheets, and it's free with a Google email account. When I compared the cost-benefit trade-offs of purchasing a Microsoft Office 2010 upgrade, the web-based tools provided much more value. Second, I do not want to struggle with data migration when switching computers. My current PC is nearly three years old, and I'm considering a MacBook for my next purchase...When I use web-based software, the computer hardware does not matter. Finally, sharing documents with others is very easy and makes working relationships more productive.

Christensen even recommends that his clients work primarily in the cloud, due to the benefits in provides in mobility and maintaining up-to-date files across multiple computers. Security is the biggest concern for many of these business owners, but Christensen has a response:

It is a valid point, but I would ask objectors what would happen if a company like Intuit or 37signals ever suffered a data security breach. The effects could possibly destroy those companies. The reputable web-based providers like Google, Intuit, and 37signals are staking their reputations and their livelihoods on securing your data. Their levels of data security far exceed the security we can do on our personal computers. I have more confidence that these companies can protect my data than I do protecting my own computer and flash drives from improper use.

Cloud-based services are especially important if you aren't always in the office: whether one of your employees needs to work from home or you are out making sales, you'll be able to access any of your business records that are in the web. That can mean presentations, invoices, and just about every other detail associated with your company. The number of online tools just keeps growing: you can keep your books, edit images, and even run training courses, all without installing a single piece of software.

And if something happens to your computer, from theft to damage, you'll still be able to access your data. By definition, cloud-based data do not rely on a single server. Even if something happens to the office of the company offering the online software, your data will be fine.

The Cost of the Cloud

One of the reasons that the popularity of using cloud-based tools, as well as other online software, for managing businesses, is the significantly lower prices that small businesses face when compared to the big upfront costs of new computers and software licenses. Christensen uses Google Docs for word processing, Highrise from 37signals for CRM, FreshBooks for accounting, and PlanHQ for business planning. He spends approximately $25 per month and can easily scale as his business grows by upgrading to an expanded version of the same service.

Those transitions are even easy. Christensen says:

My accounting software is an excellent example. As I work with more clients, I will upgrade to more expensive versions of my web-based accounting package. However, I will require no fixed costs and no hassle associated with installing new software. I will simply upgrade my account and increase my amount billed each month. The software provider performs the needed upgrades.

Most online software offers different levels of pricing based on how much you use the service in a given month. That allows you to customize the service to your business and reduce costs. You can also find tools that work particularly well for small businesses. For example, Freshbooks is integrated with several other online tools in order to allow you to access the same set of data you use for invoicing your clients to send out an email newsletter to those same clients. It minimizes work for you, as well as any need to duplicate information.

The Drawbacks to the Cloud

Beyond Christensen's clients, security remains a key concern. Many online services provide for the secure transmission of data for users along with many other security measures and, as long as the tools you're considering for storing your business records provide such security, it is unlikely that someone will gain unauthorized access to your data. However, unlikely is not the same thing as impossible. If you work with particularly sensitive information, you may need to add more security to the services you want to use or you may not be able to use those services.

Furthermore, there have been cases where major problems have occurred with some of the most prominent cloud-based services, resulting in some users losing data. If you do choose to upload all of your data, it's important to maintain a back up, either through another online service or locally. That way, if there is some sort of data loss, you can quickly restore information and get back to work.

Cloud-based services don't work for all businesses, but they do provide opportunities to many small businesses. It's crucial to look beyond the features of a particular tool and examine both its security and its track record to determine if it will work for your business.

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