Moving your firm's and your clients' accounting and other applications into the cloud is becoming more common. But that doesn't necessarily mean that it's become any easier. No software implementation is particularly simple, whether it's in-house or based in the cloud. and that's especially true of accounting.

Intrinsically, moving a client's application, accounting or otherwise, to the cloud isn't any more difficult than if you were moving it from one server to another, or in some cases, from one vendor's application to that of another software vendor.

The only real difference is the destination. The server that the application is being moved to, and run from, is not under your or your client's control. In fact, neither of you actually knows where the client's data is physically located.

The fact that neither of you has direct control over the client's financial data means that there are some additional factors that should be considered before the initial move or implementation and during the ongoing operation of the accounting system. You and your client should also make sure that there's an exit strategy in place should the client decide that they want to bring their accounting back in-house.

To help you in your planning, we surveyed a number of vendors who provide cloud-based systems to see what their recommendations are in these areas. We also queried several accountants as to their experiences moving clients and even their own firms into the cloud.


The recent trend of moving to the cloud en masse really isn't as recent as it might seem. Back in the 1960s and 1970s, time-sharing was very common, establishing a primitive client/server model, with the client being a "dumb" terminal with little or no processing power of its own, and the time-sharing server being located "somewhere else."

Over the intervening years, things have gone back and forth. Time-sharing was replaced by in-house minicomputers, then personal computers, and now we are back to a hybrid form of time-sharing.

There are lots of reasons for this circular turn of events, but at a basic level, it boils down to accessibility and cost. Pretty much all applications consist of three basic components -- input/output (data entry and reporting), processing the data (with word processing, this is formatting and spellchecking, among other processes), and storage. Exactly where each of these basic components of an application are accomplished is what drives the approach used.

With time-sharing, the driving factor was cost. If you couldn't afford a mainframe or minicomputer, leasing a dumb terminal and paying for time used on someone else's system was a practical way of gaining access to computing ability without a huge capital investment and ongoing support costs.

Reduced cost, reliable access to computing power, and ownership of the data were all factors that drove minicomputer and then personal computer ownership.

Reduced cost and reliable access are still important, and are two of the factors contributing to the pendulum swinging back to moving applications off the desktop and into the cloud. With applications based remotely, you and your clients receive some significant benefits -- a large reduction in capital costs, reduced maintenance and upgrade costs, and less of a need for an IT staff to support applications (though they'll still be needed for network and communications support). The ability to collaborate with other staff, clients and customers is another substantial feature driving cloud-based applications.

Jim Bourke, a widely recognized authority on technology and a partner in the Top 100 Firm WithumSmith+Brown, provides another reason to move to the cloud: "I recommend if a client is not in the cloud that they plan a migration of their mission-critical applications to the cloud. In other words, if a disaster were to hit their bricks and mortar, what applications would be at risk that they could not live without? Once identified, I would start with those." With the floods, hurricanes, and tornados that much of the country has been suffering with in past years, having your and your clients' mission-critical data located elsewhere is not an unimportant consideration. It's been more than a year after the East Coast was battered with Superstorm Sandy, and many businesses took months to return to operations that were anywhere near normal. And more than a few never recovered. With vital customer, vendor and financial data destroyed, they simply ceased to exist.

But like most things in life, there are some downsides in a move to the cloud. One of the more important of these is that you and your client may not actually have control over the data -- where it resides, and how you and they can access it. This reliance on Internet availability isn't confined to accounting operations -- it's true of anything based in the cloud. But the fact remains that unless you or your client have reliable Internet access, moving to the cloud may not currently be a good choice, and universal access to broadband Web access just doesn't exist yet in this country.

Another possibly negative consideration to moving into the cloud is that it puts your client into an ongoing monthly payment obligation. Pay-as-you-go isn't always a good thing - there are clients out there still using 10-year-old versions of accounting software. Their approach to financial record-keeping is, "If it ain't broke, don't break it." While many of your clients won't go to that extreme, it would be surprising if all of your clients running accounting applications upgraded every application each year.

Of course, pay-as-you-go isn't necessarily a bad thing either. Many of us have automobile loan or lease payments to make monthly. And cable and satellite TV, phone, and Internet are all usually paid for on a month-by-month subscription. At the same time, if a client is in the financial position of having trouble making ends meet every month, adding another monthly load might need to wait until the client's finances pick up a bit.

In helping a client move into the cloud, an issue that comes up frequently is whether to move the client into the cloud by piecemeal. With this approach, the client would start the migration with the less mission-critical applications first, and when they are comfortable in the cloud, and up and running with the initial application(s), move the rest of the applications.

NetSuite vice president of America's channel sales Craig West doesn't see any reason to take this approach. "Generally, the only good reason to 'baby step' your way to the cloud is if baby steps are the only way to gain the consensus to move anything to the cloud. The old fears about security, reliability and scalability have long ago been debunked, yet corporate culture and perceived risk-aversion may still be barriers to cloud adoption."


With any new technology (or one that's becoming popular), there's always a temptation to jump right in. That hasn't usually been a great idea in the past, and it's not a great idea with the cloud. Moving an application or applications that you or your clients rely on to run your businesses onto a new technology base isn't like running out and buying a new kind of printer or a wireless keyboard to replace the wired models in your office.

Moving an application into the cloud, or starting up a new cloud-based application that wasn't used before, requires the same amount and type of planning as would any implementation. The fact that the application runs in the cloud doesn't make the process easier; it actually tends to make it a bit more complicated.

Pretty much everyone we surveyed said the same thing -- planning is an integral part of a successful implementation. The first step in any contemplated move is to sit down (with the client if it's their applications that are being addressed) and come up with a list of questions that point out what needs to be examined. 

Intuit's senior manager for QuickBooks Online, Abraham Williams, concurred: "Before switching to a cloud-based solution, the client should do a self-assessment to get their records in the best shape possible."

Xero partner marketing manager Marie Jung made an excellent suggestion: "Identify a client or a small group of clients you feel would benefit most from transitioning to the cloud. These folks can act as your beta testers as you adopt and learn a new system. Look for clients that are already using cloud technology (like online banking) or early adopters of tech gadgets (like those using tablets), as they'll have a faster and lower learning curve."

AccountantsWorld founder and chief executive officer Chandra Bhansali supports this approach: "Pick the right client for the move. Pick those clients that are ready for the cloud and will benefit most from the migrations." He also pointed out that understanding the client's workflow is important: "Educate the client about potential changes they would have to make. In order to take full advantage of the cloud, some processes may be different."

Jennifer Warawa, vice president and general manager for Sage Accountant Solutions, pointed out that moving clients into the cloud is a collaborative process. "Together, the accountant and client should determine how the client prefers to work, how they should be working, what portion(s) of the business they need to run on-premise and in the cloud, and what ultimately will optimize performance," she said. "Many times, new technology is not the main challenge of making a technology transition; it's managing the actual change in workflow and process."

Being prepared on your side is another concern. Thomson Reuters' Christina Wiseman, product manager for Web services and mobile, advised, "Regardless of which cloud services you plan on using, you should understand the current process. Don't assume you know how the client currently interacts with your other staff -- ask your staff! Does the client deliver documents in person, via fax, via phone call, via e-mail? How does the client prefer that your firm send them documentation? Why do they use those documents?" Wiseman added an important point, "Once you understand the current interaction, make sure that your staff and the client understand why you're making the change, in terminology that makes sense to them."


One area that several vendors mentioned was training. Accounting systems (and many other applications) are not intuitive, even if the cloud version is from the same vendor your client is currently using on their desktop.

Making sure that your client (or your staff members, if it's your practice that's moving to the cloud) is able to use the software correctly, effectively and efficiently, is something that should be addressed before a final decision is made, not after.

Different vendors take different approaches to training, though many offer it over the Web as online courses or webinars. Not everyone finds this delivery channel effective, so it makes sense to arrange for your client to spend an hour or two with an introductory course and probably part of a report generation course so that they (and you, if you think your client will turn to you for support issues) know that they will actually be able to use the systems once the move to them has been made.

Backup is another issue to give some thought to. Virtually every vendor we queried regaled us with reassurance that there is no need for a client to worry about backing up. It's all taken care of with redundant servers, RAID drives, and so on. After all, the CIA is leasing space from Amazon Web Services, right?

As accountants, we can't be quite so sanguine. Regardless of how thorough a cloud vendor is about backup, the client should always have their own copy of their mission-critical data. Always!

Some of the vendors we queried will provide this backup copy to the client upon request. Even if the vendor is not equipped to provide a client backup copy, in most cases, there's an acceptable work-around.

Just about every cloud-based vendor lets you download reports in Excel format. If you or your client download a detail transactional trial balance or general ledger every night or two, you have an Excel backup that can be loaded into many deskbound accounting systems.

Given the terrible weather the past few years, it doesn't hurt to have a Plan B. Actually, this Plan B works well for backup purposes even if the client, or your firm, isn't in the cloud. Store copies of the Excel report in multiple cloud-based storage sites like Dropbox, Google Drive, or SkyDrive and you and your client will have redundant backup, just in case.


Strange as it may seem, the possibility of moving to another cloud service, or out of the cloud entirely and back to in-house processing, is something that should be considered before actually going cloud-based.

Most of the software vendors we queried didn't see returning to an in-house system, or even moving to another vendor, as much of a problem.

If you or your clients are truly concerned about being able to move back and forth, in and out of a cloud-based accounting application, Intuit's QuickBooks seems to offer one of the easier-to-use solutions. With the Accountant's Edition you can create a transportable version of a client's desktop QuickBooks system, port it over to QuickBooks Online, and easily reverse the process creating a portable version of the QuickBooks Online client files to port over to a desktop version of QuickBooks.

Several of the other vendors we surveyed also mentioned that they can and will provide a client with their data if the client decides to leave.


In this survey, we've provided some areas and ideas for when and how to go cloud-based, and how to back out. CPA2Biz director of professional services Thomas Gawne offered some advice that is applicable to this process, but just as valuable in other areas of today's digital practice: "Firms that want to thrive in this space can really thrive from plugging into what we call the Digital CPA community. These are firms that have either taken a leading role in cloud accounting services or are actively pursuing a broader piece of the market."

There is a large community of CPAs and other accounting professionals willing to share their knowledge and experience. These include professional societies like the American Institute of CPAs and state accounting societies, as well as social media sites such as the SocialCPA and CPAtech groups on LinkedIn.

Intuit's Williams added, "Accountants can benefit from moving their own books to the cloud. Using cloud-based programs is a great way for accountants to learn how to use new products and be more efficient when helping their clients."

Xero's Jung agreed: "Equally important is trying out the product yourself. This ensures you'll have a detailed understanding of how the system works beforehand and a sense of who the product is right for."

Jerry Connor, product line manager at CCH, believes in approaching the problem from a completely different direction. CCH Axcess puts the accounting practice's client operations into the cloud.

The firm's client services, such as tax preparation, as well as the firm's own applications, including document management, practice management, and client portals, are all embedded in the cloud, rather than on the accounting firm's own in-house servers.

And even if many of the client's accounting operations are not performed on the accounting practice's in-the-cloud systems, the expertise that an accounting firm gains from having its own operations in the cloud is transferable in helping to move a client there.

Experience is the best teacher -- but there's nothing in the cliché that says the experience needs to be your own. So learn from others, and be willing to share your own experiences. To a great extent, that's how we got this far technologically, and how we will continue to embrace the future.


Intacct senior CPA programs leader Amy Vetter put together a checklist to help clients prepare for a transfer to Intacct. But the checklist isn't limited to moving to Intacct: It's just as useful in a move to any new system, in-house or in the cloud. Slightly edited, it consists of these steps:

  • Clients should start cleaning up lists of accounts, customers, vendors and employees to remove duplicates or accounts that aren't needed in the new system. Use this transition as an opportunity to cleanse existing data.
  • Identify team members that will work with the accounting firm on the implementation and get all the necessary documentation as fast as possible. This documentation may include bank and credit card statements, online banking information, open accounts receivable and payable, unreconciled transactions in cash accounts, physical inventory (if applicable), and financial statements as of the date at the end of the month prior to when you want to begin in the new system
  • Identify the main person(s) who will learn the system and help train the rest of the staff once the software has been implemented.
  • Gather all the reports that are used currently in the business -- in Word, Excel, in the accounting system. This will enable you to replicate them and offer ideas for additional reports.

Ted Needleman writes frequently on software, hardware, and technology-related subjects, and was previously the editor-in-chief of Accounting Technology.

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