Should Accountants be using the “Cloud”?

In my last post I mentioned two big, big driver that make the “cloud” something that accountants and their firms need to embrace for the reasons of cost, convenience and speed.

Here is an extract from an article titled  “Aussie companies lead the way with cloud computing” written by Michelle Hammond which appeared last year on the startupsmart.com.au website. Although it is over a year old it raises some excellent points. It’s a good read 🙂

Australia is leading the way in the adoption of cloud computing in the Asia Pacific region, but companies continue to be cautious about the workload of moving to the cloud, according to a new report.

Business research and consulting firm Frost & Sullivan recently released a report, titled State of Cloud Computing in Australia: 2011, as part of its cloud computing research program.

According to the report, 43% of Australian companies now use cloud computing in some form, while 41% of IT decision-makers say cloud computing will be a top priority in the current fiscal year.

The figures confirm the findings of another survey by technology giant IBM, which reveals 60% of chief information officers in Australia and New Zealand plan to implement cloud computing over the next five years, compared to 39% two years ago.

According to Frost & Sullivan, companies value cloud computing due to the reductions to capital and operational expenditure, cost savings, increased business agility, and the ability to deliver IT on demand.

Their report also provides a breakdown of the main cloud computing deployment models:

Public clouds are typically offered via a web application or as web services over the internet, and involve applications such as customer relationship management, messaging, conferencing, payroll and office productivity.

Private clouds are owned by the user company and/or a service provider deployed inside a corporate firewall.

Hybrid clouds involve a combination of public and private cloud services.

According to the survey, hybrid cloud deployments are the most popular model in Australia, adopted by 22% of companies, compared to 18% of companies using public clouds.

Not a lot to add here. If the cloud is good enough for so many of the above businesses then why not accounting firms? Go the cloud!

Is your head in the cloud yet?

I’m often amazed how technology has changed our lives. When I started my business back in the late 1990’s I used a fax machine almost every day, made regular trips to the bank to deposit & withdraw monies and when things started to build started to hire staff and bought all the necessary computers, networking and software that came with an office of 6 people. When the dot-com crash came I had to downsize dramatically – cut costs wherever I could. Thankfully I survived intact and things started to improve a year or so later.

The above experience taught me a valuable lesson. Only spend money when you have to. The web, and now “the cloud”, offer an amazing array of free and low-cost alternatives to traditional methods of procuring and using products & services. One such area is software. Data storage, secure backups, document management, website analytics, market research, email, diary, international online collaboration & publishing are just a few examples of items I use almost everyday without any charge – completely free.

Now of course I run a one-man band (with the occasional help from one or two close associates) and its easy for me to set myself up in such a way. But I’m convinced that many accounting firms out there aren’t taking advantage of the low-cost environment that the cloud can offer.

Putting aside the usual objections of risk and “what would my clients think?” the cloud can offer accounting firms tremendous cost and flexibility advantages. Do a little reading in the subject – you may just surprise yourself who out there is using the cloud to run at least part of their businesses. A recent study indicated that the sample survey reported around 80% of respondents use the cloud in some way to run their businesses (see http://www.virtela.net/press-room/industry-news/cloud-news/new-study-reveals-80-percent-of-companies-using-cloud-computing-applications-800623031)

In fact there has been an explosion of accounting software available for business and professional firms that is exclusively cloud based. At last count there are around 200 available in the world market today. Here are just a few: Xero, Zoho, Outright, Kashflow, Freshbooks, Ledgerble, Bill.com, OpenBooks, Wave Accounting, Pransform, myERP, AccountRight, Concur, 24SevenOffice, Financial Software Solutions, Liquid, Compleat, Kashoo, TRACT Billing, WorkForceTrack, Priority, Averiware, Acumatica, Tallyzip, Yendo, e-conomic, ERiS, Remotia, Intrix, Skyledger, Clear Books, RSA eBusiness, MyB2B, Pansys, Slingsot Software, iWebNotes, Deskera, Replicon, Ofipro, Chrome River, AppFolio, Bill4Time, Cleanbill liteBooks, Expensify, Texthog Receipt Bank,LiveStream, Captoom, Crunch, Fanurio, RSDataWeb, Point of Sale Software, Digital Invoicing, Centerpoint Fund Accounting, FreeAgent, SurePayrol, Less Accounting,AccountsPortal, Aqilla, Portfolio Genioius, TurningPoint, Twinfield Online, NECS entreeWebExpenses, Merchant Mirror, myTooq, AccountExact, Reporta, Pantonium …

In fact the local (i.e. Australia) favourite MYOB is about to launch their  “Accounts Live” platform in the cloud in the next couple of months.

Maybe its time you put your “head in the clouds” (sorry I couldn’t help myself) for a while and had a think about what this brave new world can offer!

All my best,

James E

 

 

Updating the accounting practice

The other day I was reading through the website cpatrendlines.com and came across a most interesting article written by Steve Erickson – an accounting firm consultant based in the US. To be honest I’ve never given the area of changing roles within the firm much thought before since my focus is on the client side. However, Steve’s insights got me thinking about how changing roles can help make firms more effective in serving their clients. Enjoy the read below! (source http://cpatrendlines.com/2011/11/21/three-new-staff-positions-you-didnt-know-your-firm-needed/)

I have been giving quite a bit of thought to the cost/price squeeze facing many CPA firms. Salary and benefit costs are at an all time high as a percentage of net revenue and profit margins have been decreasing for a number of years.

This is, in many cases, due to the upward delegation of routine tasks to experienced accountants just because they have scanners and computers on their desks.

Technology is supposed to replace high cost labor, not the reverse. As a result we have many of our best and brightest performing clerical tasks in an inefficient manner. CPA Firm staffing choices can make a significant impact on bottom line and overall firm performance.

Bill Gates once said: “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency”

I have come to realize that the CPA profession is operating by the second rule in many instances.

It is time to rethink your staffing models to make sure you have employees with the right skills to perform certain tasks.

Here are a few that come to mind:

1. Data Management Specialist — An employee that prepares and files electronic data for use by the professionals in the firm. This year I have been in firms where $100,000-plus managers are preparing PDF documents. It’s really hard to make money with this cost structure. Hire an expert in electronic documents. Costs will go down and productivity will increase.

2. Email Expediter — An employee who files email into folders for use by the professionals. According to a survey I recently conducted, professional staff are spending in excess of 1 hour per day dealing with email. In a firm with 25 professionals with an average billing rate of $150 this represents almost $1,000,000 in potential lost fees every year. I have no doubt that this position would pay for itself many times over in the span of a year.

3. Technology Coordinator — Hire some folks who really know the software and can become expert in its application. Let your professionals focus on professional matters. I’m not saying to not allow professionals to use software. I’m just saying they shouldn’t have to become software experts to practice public accounting. Just look at all the training costs and lost efficiency simply due to the lack of expertise in software use.

Keep smiling and bye for now,

James E