Archives for June 2013

Cloud Computing: Locking Us Into the Matrix?

Cloud computing is being called the best thing that’s hit the technology sector since multiple core processors.  It gives small businesses the ability to tap into super computer power without having the cost of building the super computer.  The business pays for usage of the cloud rather than for all the hardware and upkeep of the computers. An example of a sector that’s rising in its use of cloud systems is the accounting world where we’re seeing a lot of cloud accounting software rolling out. It’s a good deal; giving the small-timer the ability to handle spikes in computing need without breaking the budget.

Is cloud computing a trap though?  Richard Stallman thinks so.  In a recent interview with The Guardian, Stallman called cloud computing “stupidity”.  He’s in good company too.  Larry Ellison, the founder of Oracle, is quoted in the same article as calling it “complete gibberish”.  Stallman is the founder of the Free Software Foundation and the creator of the GNU operating system so he knows a bit about free and community supported softwares.  Of course, just because they say it’s so doesn’t make it so.

Cloud Computing MatrixBut, he and Ellison bring up some good points.  If we’ve got all our data in the cloud, the cloud becomes a pretty good sized target for those who would like to have our data.  The most convenient cloud application in the world isn’t going to seem so convenient when someone is leaking your customers emails all over the internet.  Or worse, their passwords and credit card information.

Or, what happens when you’ve stored all your data in the cloud and the cloud goes away.  Or when you depend on the cloud’s computing power to maintain your business, and it suddenly goes away?  You might wish you had a little bit of that control back in your own data center.

Truthfully, I’m like a lot of people in the digital world today.  I use gmail, store quite a few of my files on Dropbox, and count on any number of sites and services that use that same cloud technology.  And when I stop to think about the cost of replacing any of those with the hardware and software to recreate those solutions, I shudder a bit.  I’m payment averse, so it’s not like I’d be replacing software and services that I already pay for.  No, I’d be replacing software and services that are free.  Maybe they’re ad supported, or limited in some way, but they work.

I like being able to access my data and information from any number of places just by logging into a website.  I understand that there is a risk of my data being compromised.  But, I’m a personal user.  Very little of what I have out there is so personal in nature that it would compromise me if it was hacked and released.  Any business taking the same risk has to weigh that against the cost of replacing the software and services that they are already using.

For many small businesses, it’s likely worth it.  Larger companies might think nothing of it, but should.  It certainly calls for some serious thought on the type of data that you’re storing in the cloud, and the type of information that you’re passing back and forth to a cloud computing source.  You never know when the NSA is watching… 😉

Another concern, brought forward by Stallman, is that of the proprietary nature of many of the softwares and services.  Google Drive, for instance has it’s own format (much like Microsoft Office does) that doesn’t transfer well to any other service.  Many other services make it overly hard to retrieve all of your data from the service without a lot of hassle.  What risk is there in having your data locked into the “Matrix” of cloud computing?

What do you think?  Is cloud computing truly the wave of the future?  Or is it going to become so risky that it fails due to lack of use? Does the proprietary nature of many of the services cause undue hassle?

Original image credit:Matrix Readout – Seamless texture by Patrick Hoesly, on Flickr

Taking the Book out of Small Business Bookkeeping

In an ideal world, we could focus all of our energy on growing and improving our small businesses through strategic initiatives and creative thinking. But in reality, there are logistics and administrative tasks that can get in the way of focusing on what you do best. One such task is bookkeeping. With web-based apps and software packages, bookkeeping is no longer a paper-based, manual process. But with that comes a new challenge: investing in the right technology to support the changing needs of your business. Successfully tackling the burdensome but necessary process of bookkeeping means developing a solid plan and maintaining an approach that’s right for you.

To Outsource or Not to Outsource

The first accounting decision small business owners need to make is whether they want to do their bookkeeping in-house or if they want to outsource this function. There is no right or wrong answer, although some experts advise not outsourcing at the beginning; this gives you an opportunity to gain some foundational knowledge of bookkeeping practices.1

Assuming you decide to manage your bookkeeping in-house, the next decision you’ll need to make is what accounting software or online application you’ll use. Choosing the most frugal option is most likely a priority. But a common mistake is equating “frugal” with price alone.

Devil in the Details

While some accounting software might be free, it can cause disastrous revenue decline and hinder profitability if it’s not the right program for your particular needs. Mike Budiac, who runs (a website designed to help small businesses choose the right accounting packages), knows how important it is to choose the right one. An expert in this area, he has seen how “it can make the difference between businesses that are profitable versus not profitable.”

This is why it’s important to avoid making decisions based on price alone. The most frugal option might be one that’s a higher investment upfront but provides a stronger ROI over time. Keeping that in mind, there are a few overarching categories to choose from: 1) free programs 2) paid accounting packages and 3) web-based applications.

Free Bookkeeping Programs

If your business needs are simple and you don’t need much help as far as tutorials go, there are some credible programs out there that will cost you absolutely nothing to use. Some of the free programs available include:

  1. Zoho Invoice – very simple, basic invoice software meant for small businesses and freelancers
  2. Outright – accounting and bookkeeping application designed for small businesses with no need for payroll or inventory
  3. Wave Accounting – online software for help with invoicing, accounting and payroll

Top 3 Paid Small Business Accounting Packages

  1. Sage 50 (formerly Peachtree): this desktop application includes basic bookkeeping functionality and the expertise and reassurance that Sage offers as a world-leading supplier of accounting and business management software

Price: $369 (1 user)

  1. AccountEdge: available as both a desktop application and a mobile app, AccountEdge lets users manage their small business finances from pretty much anywhere. It is available in both a basic edition and a pro edition, depending on how many features are needed

Price: $99.00 (Basic Edition) / $299 (Pro Edition)

  1. Quickbooks Premier Edition: easily the most recognizable brand name in this category, Quickbooks offers advanced reporting and accounting tools tailored to your business

Price: $399.95

Top 3 Web-Based Applications

Last but not least, here’s how the top web-based applications rank (according to

  1. Freshbooks ($19.95/month): a simple, cloud-based application that lets small businesses access their data from virtually anywhere and guides them through various accounting tasks with step-by-step wizards
  2. Quickbooks Online Simple Start ($12.95/month): performs basic accounting functions such as creating invoices, tracking sales/expenses, downloading banking transactions, etc and allows some flexibility through add-ons such as the Quickbooks “Payroll Bundle”
  3. Kashoo ($16/month): another simple accounting application that lets users access their data from multiple places (phone, iPad, web browser). There is also a free version of this available but it limits a user’s transactions to 20 per month

Work Smarter, Not Harder

Just like bookkeeping itself, selecting the right program requires attention to detail and a firm grasp on the unique needs of your business. Few people will tell you bookkeeping is fun but choosing the right accounting method will at least make it easier to work smarter and not harder.

Angie Picardo is a staff writer for NerdWallet. Her mission is to help consumers stay financially savvy, and save some money with the best bank cd rates.