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I welcome you to the world of ‘cloud accounting’

It was some 600 years ago that Luca de Pacioli (he is to accounting what Alexandar Graham Bell is to the world of telephony) published his work on the double entry system of accounting – it is he who gave us the two words Debit and Credit. Little did he anticipate that the tenets of his publication would remain unchanged even after 6 centuries; especially with the advent of new technology each day.

Technology has contributed greatly to simplify our lives. The proliferation of some wonderful ‘tech’ ideas have been possible through commerce – ideas become products / services that are now saleable (a la e-commerce).

Technology has not only changed the topline of many businesses, but has also altered, & significantly too, the way businesses function internally. It has brought in discipline to business processes; has resulted in great savings of time and has improved the administration of business itself, greatly.

Since ages, accounting has been an important cog in the wheel of business. There is little that one could do if he / she did not know where the money came from or where it went. Accountants around the world have adopted the latest technology of their age – be it the humble calculator with its “tax” button, the computer and as it stands today – the power of the internet.

Internet has changed the way we do accounting; all thanks to ‘cloud computing’. In today’s fast paced world, it is ‘cloud computing’ that allows businesses to stay ahead of competition. For any business to survive it is imperative that the right financial decisions are made at the right time.  It is the power of cloud computing that has helped take these decisions.

So, what is ‘cloud computing’ all about? To borrow from Wikipedia – “Cloud computing is a recently evolved computing terminology or metaphor based on utility and consumption of computing resources. Cloud computing involves deploying groups of remote servers and software networks that allow centralized data storage and online access to computer services or resources” [1]. Simply put, it is the delivery of on-demand computing resources—everything from applications to data centers—over the Internet on a pay-for-use basis [2].

I am no ‘tech’ guy and may not be able to delve into the ‘bits and bytes’ of cloud computing. But what I do know is that it has been around me even before I knew what it was called. Did you know online banking is nothing but ‘banking on the cloud’? Did you know you purchased your favorite book online by ‘shopping on the cloud’? Ever used Google Docs to create documents or Dropbox to save / share files? Yes, it is true – we have all been on the cloud long before we knew what it was.

Now then… when the entire world, powered by ‘cloud’, is moving this fast can we accountants stay far behind? Absolutely not!

Accounting on the cloud’ is the latest phenomenon to have caught our sensibilities. We realize the tremendous benefit that the oft used phrase – “anytime, anywhere” has to businesses around the globe.

The financial position of your business is now only a ‘fingertip’ away. Entrepreneurs no longer have to wait long hours to get those numbers before a critical investor meet. Important business decisions can be taken on the go. You can work from the comfort of your home and yet stay in control of your business. Your accounts would be in line with the best industry practice for book-keeping. What’s more; your data has never been this secure. You no longer have to worry about your computers crashing or data being lost to virus attacks. It’s all safe – up in the cloud – protected by the best data security applications one can imagine. No one can access your data but you.

In short; cloud accounting empowers you to take your business farther than you could ever dream.

Accounting on the cloud is a relatively new phenomenon in India. That said, there are plenty of accountants and Small Business Owners who are reaping the benefits of having taken the first headlong plunge. While we do concede that much needs to be done before cloud accounting fits well into the relatively complex Indian business scenario, we are sure that the future lies here.

In the days to come, accounting on the cloud may well be a robust alternative to traditional accounting systems. It has the potential to put a smile on the face of its sternest critics. Till then, let us enjoy this wonderful journey – I welcome you to the world of ‘cloud accounting’.

PS: Luca would have been proud of us.

[1] http://en.wikipedia.org/wiki/Cloud_computing

[2] http://www.ibm.com/cloud-computing/in/en/what-is-cloud-computing.html

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About CA Pavan Pal Sharma | B.Com, ACA

CA Pavan Pal Sharma | B.Com, ACA
He is a chartered accountant specializing in equity mobilization and financial structuring. He has secured All India 3rd Rank in CA Final Examination, 30th Rank in CA Intermediate Examination and 7th Rank in CA entrance Examination. He specializes in International Taxation, Entry India Strategies and Business consultancy services.He can be reached at team@simplifiedlaws.com