The Cloud Has Changed Accounting Practices
According to Flexi, the Cloud accounting market is growing and is projected to reach $4.25 million by 2023. When it comes to accounting, this means that a number of Cloud Accounting Software applications have appeared on the market.
Cloud computing is now a significant part of accounting practices in the UK. From payroll processes to client communication, the advent of this technology has revolutionized businesses in many ways. Cloud-based accounting softwares increase automation in day-to-day business processes, such as accounts payable, expense tracking and payroll.
Not only has it made things easier for business owners and their employees, but it has also changed the way that accounting is done. This is because it has made accounting processes easier and more efficient than ever before:
- According to Sage UK, 67% of accountants prefer Cloud accounting and believe that Cloud technology makes their businesses more successful.
- 63% of accounting firms that had a cloud-based management system in place felt they handled Covid-19 disruption well.
- Businesses can shorten close process times by 36% by switching from spreadsheets to cloud financial management, accounting facts show.
- 53% of them have already adopted Cloud-based practice management solutions for project management and communication with clients.
- 67% of accountants say Cloud technology is improving client interactions and service offerings
- 56% of accountants say that practice revenue has increased in the last 12 months.
As a result, businesses can save money on their operations and focus more on their core competencies. It allows companies to share resources, work together and collaborate more easily. In a world where remote working is becoming the norm, more and more companies are recognizing the benefits of the cloud in a hybrid organisation.
Cloud Accounting vs Traditional Accounting
Cloud accounting services are also gaining popularity among small businesses because they offer many benefits over traditional accounting systems.
One such benefit is flexibility; Cloud-based applications allow users to set up multiple accounts within minutes and access them from any location via an internet connection. Also businesses that make use of cloud computing are able to significantly reduce their operating costs, as they do not have to install expensive software or get rid of outdated hardware in order to accommodate the demands of the business during peak times
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The UK's accountancy industry is the first to recognize the need for cloud-based accounting software and services. Mostly because UK’s major accountancy firms receive consistently reliable income from their audit segments.
The UK's regulatory environment for businesses and companies has gone through a number of changes over the last decade, with a central focus on "businesses in action". This has led to a more compliance-based strategy, as well as the continued use of computer systems. With this in mind, and data security at the forefront of IT decision-making; cloud computing is becoming an increasingly viable option for small to medium sized enterprises (SME).
One of the (many) benefits of cloud accounting, is its ability to make new accounting technologies such as Big Data, Power BI and AI accessible and simple. These technologies can help businesses analyse their revenue streams and identify areas where they can improve efficiency and profit margins. This means that businesses can make strategic decisions about how to grow their company based on real data rather than guesswork or intuition. Simply put, by harnessing data, modern accountants can move from descriptive analytics to prescriptive analytics.
To quote Forbes 'Centralizing data management, particularly through the use of cloud technology, reduces waste and lowers costs considerably by improving communication and collaboration'.
The use of data makes it possible to create reliable audit trails, which can help businesses ensure that they are complying with all regulations. Additionally, cloud computing means that businesses don't have to worry about maintaining their own servers or networks, which means they save time and money while improving their efficiency.
Meeting clients' needs: how the cloud is redefining the role of the accountant
The automation of repetitive and low value-added tasks has forced accountants to rethink the scope of their work. The traditional role of an accountant has always been complex, but it's becoming even more so as businesses need accountants who can advise them on how best to utilize technology in order to increase efficiency and productivity.
Now that routine tasks are handled by digital, their clients now expect them to provide business advice. Sage research finds that 82% of accountants agree that clients now expect services such as advising on relevant finance and accounting technology and 45% said they see their role becoming more strategic in the next two years.
This means that accountants need to become experts in a variety of areas — from finance to marketing — if they want their clients to succeed in today's competitive marketplaces. As a result, 82% of accounting firms say they are willing to recruit from a non-accounting background, for positions within project management and client services.
The future of accounting
The cloud offers huge benefits to UK SMEs, and a growing number of companies are now turning their attention to the technology that can save them a small fortune and gain a competitive edge in the UK business industry. And because accounting is based upon the review of financial records, this will likely lead to more reliable financial practices for any company that is utilizing cloud computing practices
As more companies turn to cloud computing, the accounting practices used by companies in the United Kingdom are changing. Cloud computing presents several business opportunities for accountants. However, it also comes with the cost of having to learn a new system and having to adjust their existing accounting practices. The good new is, many cloud accounting solutions provide their clients with an onboarding process and customer service management.
As for adjust their existing tools and practices, again, cloud-based solutions are designed to integrate with existing tools, not the other way around. This compatibility between tools makes it possible to create transversal and secure approval circuits.
Last but no least, many accountants are hesitant because they are afraid that cloud computing will require them to spend more money. While it is true that cloud computing can be expensive, it doesn't necessarily have to be. In addition, one should not forget the many hidden costs that burden the budget of accounting firms, starting with scope creep.
