We have been conservatively sitting on the sidelines watching the game of cloud based services develop. A long time ago, I made the decision to be on the leading edge and not the bleeding edge when it comes technology, especially when it involves my clients. There have been fads and ideas that are the latest and greatest that disappear as quickly as they arrive, but that is not the case with “The Cloud”. We have been sitting and watching this technology develop, letting the cloud industry make its mistakes and mature its products, before we consider assessing and embarking on a cloud based solution for FWO and for our clients. I suppose it’s just the conservative nature of being an accountant, minimising risk for clients and understanding the bigger picture, instead of diving headfirst into unknown waters.
In my view, “The Cloud” is here to stay. Why? Because the major software providers are developing their products and solutions based on cloud delivery. Over the past few years, specific applications were being provided in the cloud, but the major software applications were not there yet. From a personal and SME perspective, my benchmark is Microsoft. The biggest software provider in the world: Word, Excel, Outlook, PowerPoint, and so on. The applications that are used by most businesses every day in one way, shape or form. At FWO we now use Office 365, which is a Microsoft hosted solution where all of our Microsoft Office applications are online. We don’t have to have them on our servers or keep them updated to the latest version. It happens automatically. All of our files and data are still saved on our servers in Brisbane, but the Office applications are taken care of for a small per user cost per month. In fact, Microsoft will now manage your entire IT system, so all you need is the internet and device to connect.
When I look back at the last 25+ years of technology being used for accounting, the accounting software industry is finally at a place that enables more accurate and timely reporting, thanks to the Cloud. Moving from handwritten cash books to seamless cloud accounting integration, the cloud solution is only going to get bigger and better. The main SME accounting software companies have been developing and providing cloud based accounting solutions for some years now, but it is really only on the last 12-18 months that the number of SME’s embracing this technology has increased. The cloud based accounting solution Xero has really shaken up the market. Xero is only available through a cloud based solution and has been gaining some traction in the market, which caused MYOB (the biggest SME software provider) and Reckon/QuickBooks to get their cloud solution up to speed.
We have a small number of clients using Xero, with the majority using MYOB and then Reckon/QuickBooks. Whilst we will always be able to provide our accounting services to our clients using whatever version of these applications they use, it wouldn’t surprise me to see the software companies moving to cloud based solutions only, as the momentum continues to build in this market, just like Microsoft. This won’t be in 1 year, but I’d expect the balance to have significantly shifted over the next 3-5 years as Cloud solutions develop.
I see the major benefits of using Cloud based accounting applications such as MYOB, Reckon/QuickBooks and Xero as:
Low cost monthly solution to have your software maintained and up-to-date.
Data security as it is always backed up
You can access your financial information from anywhere
You reduce risk as you are not reliant on your IT infrastructure working (which may be just one computer)
Simplification of business processes so that it reduces processing and administration time
It allows you to give access to FWO to go in and look at your financial records at any time, without you having to back up the file and send it to us.
Better monthly reporting by utilisation of other applications that can link directly with your cloud based accounting software.
In saying this, remember that the cloud based applications aren’t quite as feature-rich as the desktop versions yet across all products, so if you are considering moving to the cloud, you need to make sure that the cloud version of your MYOB or Reckon application does everything you want it to. From my review, I think that the online versions will suit the vast majority of businesses at present, but it won’t be too long before the cloud based versions are just as feature-rich as their desktop counterparts. After all, most users only use about 20% of software features anyway.
So watch the cloud space, as it is not only the accounting solutions that are moving online. Many businesses now operate their operational software applications via the cloud, and with seamless integration between different software applications via the use of plug-and-play API technology, applications are simply talking to each other.
We are keeping a close eye on this space, and I have no doubt that as it develops further, the solutions will simplify and business processes. If you would like to look at the some cloud solutions, click on the following links for more information.