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How is Cloud Accounting Transforming the Accounting Industry?

Cloud Accounting Transforming the Accounting Industry

The advancement in technology has led to numerous benefits to distinctive business types. The accounting industry is also leveraging the technological benefits by incorporating the latest use of software and tools for accounting. The certified accountants are moving from the traditional accounting approach to the advanced approach of cloud accounting.

Cloud accounting involves the use of accounting software and data hosted on an external server and making it available through the internet medium from any location and any device. Software like QuickBooks, NetSuite, Freshbooks, Xero, etc.has moved from the desktop to the cloud and is fetching even better results.

A CPA firm needs to have cloud accounting in place for delivering the best accounting results to its clients in the present scenario and move with the latest technological trends in the accounting industry.

The Cloud Stats

  • According to RapidScale, 94% of companies witnessed security improvement with cloud accounting
  • 91% of companies reported that cloud accounting makes it easy for them to meet compliance requirements set by the government
  • 63% of enterprises are transforming digitally due to greater cloud adoption engagement
  • 66% of IT employees mention security as their biggest when it comes to adopting cloud accounting
  • 24% of companies whose top priority is employee satisfaction are likely to switch to cloud
  • More than half of the IT professionals are confident of the growth of machine learning and artificial intelligence to 67% by 2020

Cloud Computing’s Impact on the Accounting Industry

With each innovation, the accounting industry has evolved significantly in the past decade. Owners and professionals are benefiting from the regular development and transformation from the traditional options to the technological ones. The cloud technology is making accounting applications less costly, easily accessible, and time-saving.

The cloud proves to be a big opportunity for the accountants which they can leverage to have meaningful business insights and increase the business performances. The transformation from the traditional methods to cloud accounting is not easy as a change in work culture, administrative processes and attitude are needed to align with the new accounting approach.

Also Read: 3 Ways Payroll Software Turns the Tough HR Job into an Easy One

Can accountants be made redundant by cloud accounting?

The value of accountants become questionable with cloud accounting, especially when it comes to SMBs. They will be looking for an app to replace the accountant’s role completely. However, this is not the true scenario as no app can take the place of professional accounting advice.

The cloud accounting cannot replace accountants but simply help them lower their workload for managing and carrying out the various administrative and accounting tasks.

Top Benefits of Cloud Accounting

When it comes to cloud accounting, users can gain access to it with the help of their devices and smartphones, considering the fact that 2.6 billion smartphones are used on a daily basis in the world. So, let us look at some of the major benefits of cloud accounting in detail:-

  • Concurrent Analysis

The complexity of managing redundant data files comes down to the minimum level with real-time cloud accounting updates. The financial data gets gathered easily for work, and due to the lack of need for sharing attachments over emails, the substitute time can be utilized in managing the core tasks.

This proves to be a blessing during the busy tax season, and with instant access to data, decision-making also becomes feasible. This is the reason 53% of companies that invested in the cloud have witnessed more revenue growth.

  • Scanning Documents

Purchase orders, invoices, account statements, etc. form the basis of accounting, and these documents in the electronic form can be easily scanned and processed through cloud accounting. With the integration of the banking app with the accounting software, the information of various transactions can be shared easily.

  • Storing Files

The accounting files are some of the heaviest files, and with the business growth, managing them becomes painstaking. However, by using the cloud accounting services, the storage space can be increased as per the requirement, and the files can be stored at the minimal cost.

Apart from this, the files containing the data get backed up with cloud accounting, ensuring the safety of your data forever. According to PCWorld, 50% of business adopting a cloud accounting approach needed less IT infrastructure, adding to the overall cost-saving benefit.

  • Enhancing Client-Accountant Relationship

With cloud computing, accountants get the opportunity to change and nurture the relationship between them and the clients. The accounting files are shared easily with permission-based sharing, providing transparency in work. Due to a reduction in operations costs, accountants can offer discounts to attract clients.

As per the InformationWeek survey, 65% of businesses said that cloud accounting helps in meeting the business demands more quickly and efficiently.

Also Read: 99.9% Businesses Start with Loss – Are You Still Among Them?

How Cloud Technology Streamlines the Work for CPAs?

The impact of the digital revolution in the accounting industry has been substantial. With the accounting processes becoming automated due to cloud computing, accountants and CPAs can upgrade their role to that of an advisory, providing additional client value, along with enjoying the following benefits:-

  • Finest Accounting Software

With the advancements in computer technology, software quality has improved a lot. If we talk about cloud accounting, the software quality has increased considerably. The recording of transactions with hands on a ledger during business accounting has been replaced completely with cloud accounting, which provides access to the data from anywhere at any time.

  • Incorporating Automation

With cloud accounting, automation comes into play at large. Although not all the financial tasks can be automated, some of the major ones like invoicing, inputting, auditing, searching, updating, reconciliation, etc. can be automated for sure, resulting in an overall reduction of the workload and time consumption. Apart from this, it also streamlines the accounting processes. which include counterparties settlements, data analysis, lending operations transaction, and more.

As the tools improve more with the passage of time, the accounting software becomes more and more intuitive. A recent study conducted by Verizon stated that 77% of businesses feel that cloud technology makes them have a competitive edge.

  • Inflated Accessibility

Through the medium of the internet, cloud computing provides access from any part of the world. For instance, a CPA can access and review the files of his/her clients along dealing with the tax planning requirements and concerns while traveling. This eventually speeds up the client feedback too due to instant data access and sharing.

  • Data Security

Data security has always been a major concern for the accountants, but with cloud accounting, this concern comes down to the minimum level. With data encryption, firewalls, Intrusion Detection and Prevention Systems (IDS & IPS), and more.

Cloud accounting is strong enough to resist any unauthorized access, explains a provider of QuickBooks bookkeeping services. As per a recent survey, 20% of the cloud users who said they had switched to cloud technology were able to recover their data in less than 4 hours.

  • Enhanced Productivity

A significant increase in productivity has been witnessed in the daily operations of 59% of SMBs, as per a Forbes report. This is due to the fact that the time spent on the manual works is reduced greatly, and CPAs are able to utilize the same time in improving their work productivity.

Apart from this, the time required to correct the manual errors also comes down to zero, leading to even better utilization of the time. For example, a beverage company by the name of Sunny Delight cut $195,000 in employee costs and increased yearly profits by $2 million.

  • Minimized Technology Concerns

It has been observed that CPAs find it hard to understand the various versions of the accounting software, making them spend an enormous amount of time in trying to understand its working. However, with cloud accounting, such concerns are reduced greatly since the accountant and client share the same platform on the cloud.

  • Proficient Systems

One of the biggest benefits that come along with cloud accounting is the paperless environment of working. Accountants can gain quick and easy access to the business and client data through a reliable storage system which is safely stored and secured properly. As per the Pike Research Report, the energy consumption of the data center will come down to 31% by 2020.

  • Data Recovery

There have been numerous cases in the accounting world, where data is lost due to poor manual handling or unauthorized access. Cloud accounting helps you to stay prepared for such mishappenings by offering automated backup facilities and data storage in various geographical locations, ensuring zero data loss due to any man-made or natural disaster. 43% of IT employees reported planning of moving to cloud accounting for a better data recovery option.

Conclusion

The above-post clearly explains the importance of incorporating cloud accounting in your accounting operations. It not only helps you to gain instant access and in the sharing of data, but also minimizes the risk of any potential human error. The software updates are quick and easy to include, along with reducing the time and costs due to manual efforts.

With access from any part of the world, the communication between the client and accountant becomes simplified. This speeds up the accounting operations as the suggestions and improvements become real-time. It is important to move with the technology, and the accounting firms have started to realize the same, eventually reaping the benefits that come along with cloud accounting.

Also Read: 6-Step Guide to Avoiding Financial Stress when Running a Business

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