The accounting profession has never really been considered adaptive or quick to change. However, cloud computing is bringing about a transformation in the industry not seen since the introduction of double-entry accounting in the 15th century.
Driven by client demand and the need for greater efficiency, it is no longer a decision of “whether” to adopt cloud accounting but “when”.
Cloud accounting has changed the game by enabling access to readily available and real-time financial information. Businesses no longer have to wait on their accountant as cloud software facilitates up-to-date accounts, balance sheets and profit and loss statements that can be accessed at any time, from anywhere, from any device.
Accuracy of accounts is also vastly improved. Since there is only one set of accounts, fewer errors are made as information no longer has to be cut and pasted between spreadsheets and reports.
The impact on business financials is considerable. The results are better management of cash flow and tax issues as well as having precise knowledge of how the business is performing.
It has been predicted for some time that accounting processes will become more automated and cloud computing is a big part of this. Already cloud software can decrease the time it takes to produce annual and management reports by about 30 to 40 per cent.
This streamlining of processes will lead to a change in resource allocation with less time spent inputting information and more time on analysis. This is supporting the trend of a growing number of accounting firms providing more business advisory services in addition to traditional compliance offerings.
Cloud accounting represents an opportunity for smaller accounting firms to get ahead of their larger counterparts and provide a slick, streamlined and proactive service to their clients. Being nimble and responsive, they can more easily take up cloud software, as opposed to large firms that are encumbered by in-house custom-built programs – which complicates incorporating new software.
So it’s no wonder there is a growing number of smaller firms offering 100 per cent cloud accounting solutions to their clients, while the larger firms are treading more cautiously. Having some clients on cloud software and a greater portion on their traditional set up.
Cloud accounting is also reducing the dependence accounting firms have on their on-site servers but does throw into question the issue of data storage and security as you never truly know where your data actually is or who else has access to it.
However, reputable cloud software companies take great care to safeguard this data, via regular back-ups and disaster recovery.
For small businesses cloud computing represents a challenge and an opportunity.
Cloud applications can even the playing field for smaller businesses by giving them access to sophisticated software and applications they would normally not be able to afford.
Reliable telecommunications will now become essential. Even though most businesses already have access to high speed broadband, and with the advent of the NBN this will only improve, they will also need to incorporate mobile technology.
In the next five years, expect to see a level of automation where an accounting program has the ability to easily capture financial information such as invoices, then intuitively process them, assigning them to the correct account and then automatically storing the information.
Where today there are different programs for accounts, banking, payroll and reporting, which don’t always communicate with each other, tomorrow all these areas will be effortlessly interconnected and driven by cloud software.
Cloud computing can easily be considered one of the biggest changes to impact the accounting profession. The so-called number-crunching and bean counting will become automated, processes and accounts will become much more transparent and accounting professionals will need to evaluate their positions and make analysis and advisory the basis of their role.
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