Cloud- Accounting systems in the INGO and Non ProfitsPublished on 24th September 2020
I am a Chartered CIMA accountant (ACMA CGMA) who has been in the INGO and Not for Profit sector in the UK for close to 7 years now. My work experience has been in organizations ranging from under £1m annual income to close to £10m per annum. I have worked in various accounting and finance roles and I am also the director of Consult Financial Limited, who specialize in cloud-accounting system solutions, among other things. I have managed a range of accounting systems including Sun Systems, Sage 50, QuickBooks Desktop, QuickBooks Online, Xero, Kashflow and Aqilla.
I am grateful and privileged to share my thoughts through this article that discusses some aspects to consider when deciding whether or not a cloud-accounting system is suitable for an organization. These are personal views, purely based on my experiences and do not represent or endorse a particular accounting system.
Here are some key factors to think about if you are considering switching to a cloud-based accounting system through a systems migration from your existing desktop-based accounting system, or simply from scratch, as an implementation.
INFORMATION NEEDS (Scope, before Specification)
Having used accounting systems that were mainly required for bookkeeping purposes, to support the eventual production of financial and management accounts and also the incorporation of budgets for organizational and donor-reporting purposes, I quickly realized that was vitally important to understand and meet key information needs from key stakeholders. If you are to select an appropriate system for your organization, you need to firstly understand what your users (mostly management and budget holders) actually want. That starting point helps you to determine the scope, before the specification.
COST (‘Buy-in’ before ‘Buying’)
The cost (both upfront/implementation and ongoing/running) is a key factor that any prudent accountant or systems expert would consider before making the decision to implement a cloud-accounting system. As much as there are aspirations for an improved system, senior management and the owners of the relevant budget would have to be agreeable on whether or not a budget is available for the relevant spend. The key stakeholders and decision-makers would have to have that crucial buy-in before the organizations sets out to buy/purchase the appropriate software.
FUNCTIONALITY (Suitability over Selection)
Another key factor, which I would actually argue should be one of, if not, the top factor to consider before making the software selection decision, is to understand what the system can actually do as an improvement to what is currently in use. Defining what the information and reporting needs are with the existing system and then assessing whether or not if these are being met effectively, normally leads to various conclusions, one such potentially being that the system is not functionally adequate. The next and crucial step is then looking at the different systems available and assessing whether or not they meet each functional need or deficiency of the existing system that the organization has.
RISKS (Security over Systems)
It is also important to consider the security risks that the cloud-accounting system would look to either address or amplify. Depending on the data, the value of it and how important confidentiality and information security is to the organization, sourcing for an appropriate accounting system should always take into consideration how secure data would or wouldn’t be, post-implementation. Your organization would know what the value and the risk of losing that data would be, and the impact overall so instead of rushing to implement the system, you should also thoroughly assess how secure the systems are and the inherent and Information Technological risks that they could potentially be exposed to as a result of making the change.
Backups are to be assessed and before you decide which system to go for, you should find out if there is an option for an external backup for recovery purposes in the event of an unexpected loss of information, which I must say, is highly unlikely for a cloud-based accounting system.
SINGLE AND MULTIPLE USERS (User Access and User Accounts)
Depending on how many user licenses your desktop or existing system has, there is likely to be a discussion to be had around working more efficiently, where an unlimited number of users, as opposed to a maximum number (as per user licenses), is considered. It is highly beneficial to implement a system that allows various users to access the system as opposed to a few as this means work can be done on different parts of the system without causing disruption and delay.
ACCESS TIMINGS (Locations and Logins)
It is also worth noting that the access that the cloud-accounting software gives compared to a more traditional accounting software that may be limited to a single user at a time makes the cloud option a better one. Moving to a cloud-accounting software brings simultaneous access by an unlimited number of users in an unlimited number of locations as opposed to a traditional desktop-based system that often will have a limited number of users and only in the location where the software is installed on a computer.
IMPORTS AND UPLOADS (Templates and Time Savings)
The ability to be able to import and upload files from the bank (via what is called csv files), and also to upload per-populated templates for things like products, services, customers and suppliers, saves a lot of time and is a major plus of using a cloud-based accounting system. Particularly for organizations with long listings of prices, products and services in particular, it is worth considering the implementation of the cloud-based system to leverage the use of the import and upload functionality makes it an attractive option compared to the desktop version of the accounting system.
AUTOMATIC BANK FEEDS (Linking and Locating)
Another feature of most cloud-accounting systems, is the ability to link a bank account to the accounting system, pulling through the transactions in form of a look up, thereby allowing the organization to save a lot of time as the only job left to be done is allocation of transactions accordingly. This linking allows the user to then locate, more quickly, the relevant account codes that are required to complete the allocation. This is a far better and quicker way to get bookkeeping done as opposed to a traditional desktop-based accounting system.
By way of conclusion, the above factors offer a fairly detailed overview of some key things to consider to ensure that before you make the decision to migrate or implement from scratch, as many things have been considered and assessed.
In these recent times of the pandemic, lock-down and working from home, there has never been a greater time to consider getting a cloud-based accounting system.
Nahum P Muwowo