Is Cloud-Based Construction Software Safe for Construction Accounting Data?

Blair Chenault
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When it comes to the use of technology and reliance on the cloud in business, construction companies aren't the first thing that comes to mind. However, the complicated nature of the billing and payroll systems and the requirements for many official documents beg for a streamlined process that only technology can accomplish. While technology has seeped into the lives of most individuals, contractors in the construction industry still have doubts. After all, when you have to use and store sensitive information for your company, subcontractors, and the customer, is the cloud really the best thing for your business?

It's a valid question, and the answer may be different for one company than another. The only way to make a decision about whether your company should take the leap to cloud-based accounting is to learn more about the advantages and disadvantages of each system. 

What Is the Cloud?

Despite its somewhat expansive and mysterious name, the concept of cloud-based storage is pretty simple. Cloud software is software that is hosted by a service provider and accessed by your company through the internet. This means you have considerably less responsibility, but it also means you have less control. Sometimes called Software as a Service (SaaS), this approach means your software provider:

  • Keeps the system updated as needed
  • Provides certain security benefits with the software
  • Provides customer support if you run into a problem.

While all that sounds good on the surface, it leaves many construction companies wondering where, exactly, the data is stored. Just like when you store your data in-house, cloud-based data is stored on servers owned by companies. But these are large companies with up-to-date software that allows workloads to be shared among different machines. Much the same way your money stays protected by the highest levels of security at the bank, your data stays protected in the cloud with innovative thinking from some of the world's leading computer scientists.

4 Concerns Surrounding Cloud Storage for Construction Companies

When it comes to your options for data storage, you really only have two options: cloud-based storage or on-premise storage. For many construction experts, on-premise software is a tried-and-true system that represents familiarity and the peace of mind of being in control of your data. While it might have issues that make payment systems and other processes more cumbersome, it technically (eventually) works. When making any major changes within a company, especially those that affect sensitive data, it's vital to take time to address real concerns and determine whether the system is right for your company's unique needs. 

So, let's unpack some of the typical concerns that surround cloud-based construction software choices.

1. Reliability

A system you can count on to be efficiently accessible throughout each workday is essential to any business. After all, you can't keep a project running on time when the system crashes or is down for updates frequently. Unfortunately, no technology is perfect. Cloud-based systems need routine updates. They may even have unexpected shutdowns in case of an emergency. However, vendors typically schedule updates at a convenient time. Unexpected shutdowns are also rare.

Similarly, on-premise systems require maintenance and updates, and they can encounter emergencies. Yet, if you own the system, you can choose when updates and maintenance should be performed. This convenience is a plus as long as the tasks aren't neglected, which leaves the system vulnerable.

2. Costs

While no company looks for the cheapest solution without considering the risks, cost does matter. Installation of any new system includes up-front and running costs that add up over time. For a company installing a new system, the up-front cost of an in-house system can seem prohibitive; you must purchase the entire infrastructure and hardware. Yet, if the necessary resources are already in place, the cost for an on-premise system is mostly paid for. Ongoing costs will include maintenance and updates. They can also vary significantly since it could mean the addition of new IT staff.

The start-up cost for a cloud-based system also depends on equipment (but not nearly as much). Basic costs for a cloud-based system usually include a set-up fee followed by a monthly subscription fee. Since you're paying to access the system instead of purchasing it outright, you'll have considered reduced costs. However, contractors will need a good internet connection and the devices they'll use for accessing the cloud-based construction software.

3. IT Requirements

Whether you're looking to implement a new ERP system, project management tool, or construction billing software, adopting a new system comes with unknowns. If you have an on-premise solution, it's crucial to have IT support for hardware and infrastructure issues, as well as unexpected difficulties or customization for new software. Generally, this means you'll need a dedicated team on-site or a third-party service that comes with a monthly fee.

Conversely, a cloud-based system stores data off-site and takes hardware and IT systems out of the equation. Generally, your software provider's customer service team administers IT services. These are part of the monthly service fee.

4. Safety

We saved the biggest for last because it's usually the major hurdle for businesses hesitant to adopt cloud-based construction software. Construction companies are responsible for handling and storing several different types of sensitive data. The ability to protect this data is essential to maintaining a good reputation and attracting ongoing business. 

It's true that cyber threats exist, and the construction industry isn't immune to them. But most data breaches come from internal errors. Unfortunately, both on-premise and cloud-based systems have risks without proper security measures. No matter what type of system your company depends on, it's essential to use preventive measures like:

  • Utilizing spam filters
  • Implementing security awareness
  • Establishing a response plan

For companies with an on-site system, all of these actions fall to the company's IT team and supervising staff. However, cloud-based service providers generally utilize data security methods such as data encryption, intrusion detection, firewalls, etc., to keep their client's data safe and secure.

Technically, cloud-based construction software can provide safe data storage for construction accounting and all the practices that go along with the complicated nature of the payment process in the construction industry. However, the information of any company is only as safe as its internal practices. No matter what type of system you use for your business, data protection begins with the on-site employees using the software. 

If you've been looking for a more convenient payroll system for your construction company, maybe it's time for cloud-based construction software you can depend on. Talk to the software experts at Flashtract to learn more about how cloud-based construction software can increase productivity and reduce billing errors, all while keeping your data safe in the cloud.

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