Recordkeeping in the Cloud? Really?

small-business-recordkeeping-in-the-cloudSo what’s the cloud? It’s an internet based way to handle documents and collaborate with colleagues. Cloud computing allows you to access records and software from any location. Instead of having your records on your server or laptop, they are actually placed on a third-party company’s servers and you access them through an internet connection. If you’re using services like Google Docs or Flik’r, you’re already in the cloud.

So, What’s it Good for?

Off-site storage of documents for starters. Recordkeeping and data storage for small businesses are critical functions that can’t be taken lightly as there can be serious legal and financial consequences if records are damaged or lost. Storing your records on or backing up records off-site on the cloud can be an effective way to protect them against loss.

It’s also an effective way to easily share documents among colleagues or with clients. It can be a very effective way for teams who are working on a project from multiple locations to access and share information with each other.

If you’re always on the go, you can easily access your business records on the cloud as long as you have an internet connection – this increases the utility of your smartphone and laptop. This can be a real plus for entrepreneurs in small businesses who don’t have the ability to easily access their office based information while on the road.

Going Green on the Cloud

If you’re trying to move towards a paperless (or at least a reduced paper) operation, storing documents on the cloud can serve as a backup for your other electronic copies.  You can create a duplicate set of critical records so that they no longer occupy yards of file space and are easy to retrieve. Computer hard drives and servers are the file drawers of today’s businesses, and now, as more business transactions and communications are conducted over the internet, the cloud is becoming an extended file drawer.

Security & Privacy

The cloud is coming of age, but is still in its adolescence. Issues around security and privacy still need to be resolved and tested as a practical matter. No matter where your documents are, security is still a major concern. Records that are housed in the cloud can become lost or inaccessible through no fault of your own.

For any records of a sensitive nature, once they reside in the cloud, you are no longer in control of their security. While vendors and providers may have privacy policies, many of them take no responsibility for lost business due to their servers being down. That small print in their online agreements often absolves them of any responsibility in the event of loss of your records, so read through it before you click on “accept.” And find out how they back up your records to protect them. Internet-based recordkeeping tools hold a lot of promise for business convenience and efficiency, but the jury is still out on their security & reliability.

Bottom Line

If you are considering using any web based service as your primary means of recordkeeping or data storage, remember that the concept of back-up means a second set of records. If your main trove of records is on the web, you need a back-up set someplace else. It’s the same concept as backing up your company server’s records on the web, only in reverse. Any documents that are required to be retained for a specified period of time or for legal or tax purposes absolutely should be duplicated someplace else – – either in hard copy or electronic format.

There are definite advantages to cloud recordkeeping, but business owners need to consider the pros and cons for their specific businesses and act accordingly. The convenience is definitely there, so just be prudent about protecting your company’s security and data.

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