Update: This article was last updated on 30th Jan 2020 to reflect the accuracy and up-to-date information on the page.
The accounting industry has evolved continuously over the past decades, with each innovation and addition, making it even better. There has been consistent development and modification from traditional to technological options, which have made accounting easier for owners and professionals.
Cloud technology, the latest trend in accounting, is expected to make accounting applications easily accessible, time-saving, and less expensive. Cloud accounting refers to using accounting software and data that is hosted on someone else’s server, and that’s made available over an internet connection from anywhere on any device.
Accountants in the Cloud
Accountants should take the cloud as a big opportunity to step up. They can leverage the cloud to empower a new segment of business insight to understand that they can change their business’ performance. However, this transition isn’t easy, as it would also involve a change in culture and attitude.
Accountants can’t just adopt cloud technology but would also have to incorporate with the change in the work methods that come with it. Cloud significantly changes the administrative processes and human dependency, which gives them the potential of utilizing their skills and expertise to innovating new levels of services.
Moreover, according to the Microsoft survey, some of the primary benefits of deploying cloud computing in the organization were discovered to be cost-efficiency and improved productivity.
The real-time updates over cloud computing to all involved parties mean that accountants don’t have to get mixed up in the redundant data files anymore. Cloud technology makes it easier to gather and work on financial data.
Cloud provides a common platform to store and access all the critical data in real-time. Since the data is not required to be shared as an attachment over emails, the more time can be devoted on the core tasks, especially during the tax season.
When users can access and edit the same files on the cloud, they would be able to do more and better. Decision-makers also have access to the most recent data, and can easily track the workflow, which makes the decision making faster and, eventually, streamlines accounting practices for better.
Seamless Document Management
Accounting relies heavily on the documents, such as – invoices, purchase orders, account statements, etc. Rising dependency on the internet-based transactions has helped the electronic format of these documents to replace the printed versions. Cloud ensures that the accounting department can collect these e-format documents with ease and have them available for use whenever and wherever required.
Integrating different applications, like – banking app with accounting software, can further help with this process of maintaining the documents as integrated applications can automatically share various transaction information.
Scalable File Storage
Accounting files are among the heavier ones, and as the business grows, more it demands the storage space. With the local data centers, accounting firms will have to regularly upgrade hardware to accommodate the growing demands, which is an expensive solution.
On the cloud, accounting firms can choose to expand the storage space on demands at a much lower cost. There is no need to buy expensive computer equipment, and IT professionals to maintain them. Cloud also automatically backs up the data, which is stored at the isolated data centers, meaning that data is always safe.
Enhance Accountant-Client Relationship
Cloud computing offers an opportunity to change and enhance the accountant-client relationship. With permission-based sharing, the accounting files can be shared with the clients easily. It provides transparency with the status of the work.
Remote accessibility adds value to the client servicing of the accountants because they are available to assist the clients on the go. Also, accountants can conveniently gather the necessary documents from their clients for tax filing and other financial tasks. It further speeds up the process and helps to serve clients better.
Since, cloud reduces the cost of operations, accountants can offer some discounts or provide additional services at the same price to attract clients.
Is cloud computing making accountants redundant?
It is inevitable that the value of accountant – especially to SMB client – will be questioned as there will be people asking, “is there an app for that?”.
Business owners will always need professional accounting advice, especially when it comes to taxes. And there is no app for that.
Cloud computing allows accountants to spend less time on administrative tasks such as data entry, chasing up documents and spend more time on valuable revenue generation activities. It means that accountants can do what they are trained to do – explain, work with numbers, and let them precisely to focus on the growth of the business.
We are just starting to see the impact of cloud computing in the accounting industry. It will take some time to determine if the technology would be a key paradigm shift for accountants.
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