There is a lot of talk currently about ‘being in the cloud’, ‘working in the cloud’ and ‘cloud accounting’. But what does it actually mean? Let’s start by defining what it is not; it has nothing to do with the white fluffy cumulonimbus and nothing to do with data being ‘up there’.
In fact, data is still held and stored in a physical location. Years ago, every company had their own server, a machine that held data that would otherwise have been stored on individual computers, so that the users within a company could network, which means they could share data and work on the same files.
Now companies can choose to use cloud services instead. This means that data can be held remotely on a server, or a number of servers and accessed via the internet. Programmes such as Dropbox and Dod-dle allow files to be shared. Therefore, every user in the company can log in and work on files but the company doesn’t have the expense of purchasing and maintaining a server.
So, in essence ‘the cloud’ simply means ‘accessed via the internet’. That’s it. Therefore, data can be viewed and worked on anywhere, on any device capable of accessing the internet.
The downside is that an internet connection is required. There are still parts of the UK without an internet signal and many places where the signal is weak. This is why the government, who want more of us to work online using cloud technology, are investing in improving internet reception and want to promote the spread of technologies such as 5G.
Making Tax Digital (MTD for short) will use cloud technology so that a business will be able to access their business records anywhere, on any device they choose, as long as there is an internet connection. Most of us already use some cloud technology without giving it a thought and this will be even truer in the future.