Tag: AI

Businesses of all sizes and across industries are increasingly moving to cloud-based solutions for a number of functions, including cloud-based accounting, which promises a bevy of efficiencies and other benefits to boost business productivity and cut costs.

Cloud computing has seen dramatic growth in recent years, and a July report from Harvard Business Review Analytic Services indicated more than two-thirds of organizations accelerated cloud adoption over the past year but more than 60% reported difficulty keeping up with evolving technology. Finance departments are among the most likely to rely on cloud-based solutions, and the coronavirus pandemic pushed many businesses toward cloud-based accounting out of necessity as offices closed and remote work became the norm for many.

“The last couple of years there’s been an explosion of cloud accounting,” said Kimberly Gangi, a partner at Rochester-based Insero & Co., who runs the firm’s outsource accounting services group.

Despite the increase in cloud-accounting, many business leaders are still wondering if it is right for their firms and are not sure what questions to ask and what to look for when considering a move to the cloud.

Clients frequently express concern about data security, said Michael Doody, a partner in Rochester-based EFPR Group’s Tax and Business Services Department and the lead partner for the firm’s finance outsourcing branch EFPR Solutions. Doody, who has been in the accounting industry for more than 25 years, said the benefits of cloud accounting “far outweigh the risks” at this point.

“In our mind the security is more than adequate; you can see who has been in the files, when they’ve been in the files and what they’ve done in the files,” Doody said. “I’d say it’s just as, if not more, secure than someone housing their small business records in their office.”

Major firms developing cloud accounting software have security front of mind when designing the systems and install redundancy and backup as part of the systems, Doody said, noting there are risks with traditional systems as well.

Gangi and Doody described a myriad of benefits that can come from cloud computing, including increased speed and efficiency, the ability to work from anywhere and the ability to utilize add-on, or tie in, applications that feature artificial intelligence and automation.

One of the main advantages, and a major driver of adoption, is the ability to complete work from anywhere using cloud-based accounting software.

“If you have an internet connection and it’s secure, you can do accounting in the cloud,” Gangi said. “And in this environment that we all work in today, resources are scarce and people are even scarcer. Everybody is vying for the same talent and cloud accounting makes it possible to broaden your reach for talent.”

Cloud-based accounting platforms allow for the integration of add-on, or tie-in applications like bill pay services. Those services can collect invoices, scan them and automatically populate the information into the accounting software, something Doody said can eliminate formerly human tasks and allow bills to be paid as soon as the approval process is completed.

“It makes it go a little faster,” Doody said. “And you can scale faster with the same resources, or you can do more with less.”

AI and automation tools that interact with cloud-based accounting platforms can complete simple bookkeeping tasks and free up employees to work on higher level, more value-added tasks, according to Doody. He said that can lead to improved retention and make firms more attractive to prospective employees, especially younger accountants who learn about these capabilities in school and expect it when they enter the workforce.

“It’s a way for companies and firms like ours to say, ‘hey we value you, and we want you to use you at your highest and best use,’” Doody said. “We’d rather have you do higher level work and critical thinking.”

Asked about potential cons to cloud-based accounting, Gangi and Doody did not express any true drawbacks to the technology but pointed out the implementation of such programs and the transition from traditional accounting to cloud-based applications can be difficult for some organizations.

Organizations must be willing and able to invest the time and resources necessary to make the transition, Gangi said, adding it can be especially challenging for those who still rely heavily on paper. Some organizations simply aren’t ready to make the leap to cloud accounting, but Gangi said there are benefits for just about any organization ready and willing to make the move.

Ensuring the right staffing is in place to make a move to cloud-based accounting is critical, Gangi said, and organizations must have, or hire, qualified individuals who can implement a new system.

“And you have to be committed and make sure you have people who are embracing the change and ready to move forward,” Gangi said. “Buy-in from leadership and the finance team is very important.”

There are several steps and considerations firms should have in mind when deciding whether to move accounting functions to the cloud.

Doody recommends firms talk to someone who has made the transition, especially in the same industry. Having been through it, they may have insight into what to avoid or the benefits of certain products, Doody said, noting on the retail side one common issue is point of sales systems not properly communicating with the accounting software.

“You probably want to do a little homework beforehand and say, ‘here’s all the things that I have that I need to have talk to it,’” Doody said, adding anyone considering such a move should make a list of all the features they want connected to the accounting platform, and find out if what they’re currently using is compatible.

Doody also said it’s important for businesses who utilize small, local banks, to make sure their bank can work with the accounting platform to show transactions.

Planning the initial migration is an important task that can be significant, Doody said, especially if firms want to move over a lot of data. For clients switching from a desktop version of a program like Intuit’s QuickBooks to a cloud-based version like QuickBooks Online, a transition can be completed in as little as 48 hours, he said, but moving from more archaic systems to the cloud can be more time consuming, especially if firms have a desire to migrate historical data.

“Sometimes we’ll just say, ‘wait until year end,’ and when you have your year-end numbers finalized, we can start the new file up with those closed out, year-end numbers and you start with clean numbers,” Doody said.

In addition to the tall task of deciding whether a move to cloud-based accounting is right for your business, there are dozens of products claiming to be one-size-fits-all accounting solutions, and the sea of options can be overwhelming. Anyone considering a move to the cloud should take the time to engage help and make the right decision.

Gangi said choosing a reputable software firm with a successful track record is important, and she suggests finding a capable firm to help find the best product and complete the transition.

“You have to sit down with somebody who can help you vet what it is you need, what the most important features are for you, what you are using it for and what you are trying to get out of it,” Gangi said.

Matthew Reitz is a Rochester-area freelance writer.