Cloud accounting is no longer coming, it’s well and truly here and is now the mainstream technology.
By Daniel Wyner
Historically, people approach their accountant the same way they approach their dentist – they don’t enjoy a visit and usually put it off until they have a toothache, by which time it’s often too late.
Typically, consulting an accountant was a transactional relationship focused on the retrospective assessment of costs, expenses and deductions, whether clients were individual taxpayers or a business at the top end of town.
The accounting sector cannot escape the impact of the increased connectivity and automation that has already transformed so many other industries and is now taking ours by storm.
In 2007, CPA Australia released its Firm of the Future report. At that time the prospect of cloud computing was just a small puff of smoke on the horizon that very few took any notice of.
Fast forward seven years and we have seen the birth of countless cloud applications designed to improve collaboration, productivity, data collection and analysis, not only for accountants but also their clients, highlighting both the possible risks and rewards.
More than 69 per cent of accounting firms in Australia use cloud computing-based SME bookkeeping applications.
According to a recent research paper from Wolters Kluwer, CCH, Can the accounting profession “keep up” with clients and the cloud?, the tipping point between the cloud being a fad versus it being mainstream has now been and gone.
More than 69 per cent of accounting firms in Australia are currently using cloud computing-based SME bookkeeping applications, and that’s not to say how many of them are also running their own practices in the cloud.
The last software chief in Australia's cloud accounting fray.
When we think about technology in accounting, our minds immediately jump to software and the new efficiency gains it drives. In doing so, simple methods of building better connectivity with clients using technology can be overlooked.
Millward Brown research in 2014 showed the mobile phone is now the primary screen used by Australians. We spend an average of 132 minutes looking at our smartphone screens each day (compared to 125 minutes for the former king, television).
These insights could drive more personal interaction by accountants with clients in future, if they embrace the opportunities to provide proactive advice and regular contact through these new, targeted channels.
Standing still is not an option. Yes, the uptake of the cloud is a bit pull and a bit push. Whichever way, it’s happening and is the new norm.
Accounting practices, engineers and architects are all being squeezed by the big-name firms with their broad internal skillsets and deeper pockets for investing in automation. The larger players are leveraging their early adoption of high-end technologies and global reach to now package affordable services for clients who were conventionally served by smaller firms in tiers two and three.
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While these competitive pressures are very real, in the near term the cloud will absolutely level the playing field with accountancy firms. Size is irrelevant. Every business has access to the same sophisticated technology platforms. You can look like a big player, or any way you like, to attract any market you wish to target.
To remain relevant and reach imposing growth targets in the face of a squeeze on compliance revenue, accountants need to do more than look in the rear-view mirror for their clients – they need to start gazing into the crystal ball.
So what can be done to ensure we keep transforming to address industry challenges, capitalise on the cloud and provide more value and insights to clients?
A 2013 survey of Australian business owners, commissioned by CCH, found that accountants are the most trusted of all advisers. We are deeply ingrained in our clients’ financials, collating data from spending habits to income and investment patterns. But this data should be used far more proactively to better position clients for the future.
A forward-looking view paints an exciting yet daunting future. The pace of change in the past seven years, in terms of the rapid introduction and adoption of new features and software, has brought us to a point where it’s impractical to know what is coming in the next 12 months, let alone the next seven years. All that can be known with any confidence is that the term “cash is king” will likely have a new partner with “data rules the roost”.
The power of data, when connected, analysed and then served up to a professional using their experience and judgement, will only further boost the technological advancements to come. Firms can no longer afford to wait until clients come to them with an accounting “toothache”.
Accountants need to be capitalising on their crystal ball, using data and insights to help clients look far into the future.
Daniel Wyner is general manager Australia and New Zealand, sales, CCH
Demystifying the cloud