Cloud accounting is not only getting bigger and better, there’s been a change in perception with accounting firms and business owners, says Deborah Defer, managing director of Business Services and Outsourcing at BDO USA, LLP.
People in the U.S., particularly in the accounting profession, have recognized the inevitable technology change with the benefits that cloud-based accounting solutions bring. They are starting to understand it’s so much more transparent and efficient that it’s worth making the change.
“Embrace the change. You can kick and scream all you want, but it’s coming,” Defer says. “Don’t wait, because you’ll be sorry. You can’t imagine how many clients tell me ‘I wish I had done this two years ago. Why didn’t I do this before?’”
Smart Business spoke with Defer about what business owners need to know about cloud-based accounting.
How much has cloud accounting grown?
It continues to grow. As a good example, in BDO’s Business Services and Outsourcing advisory group, four years ago, we had a few clients who used QuickBooks™ Online. Today, it’s several hundred.
The products are also advancing rapidly. Everyone, from small startups to big corporations, is investing hundreds of thousands of dollars into improving the technology. For example, a hybrid product, which is partly used in the cloud and partly on your own hardware, can often be a bridge for learning how to work in the cloud comfortably. It can allow you to keep certain feature sets that you aren’t prepared to give up.
What’s the biggest benefit to switching?
As business owners start utilizing the systems, they realize they can get hours of their day back. You have access any time, anywhere to real-time data. For example, if a business owner uses QuickBooks™ Online and turns on an external add-on, he or she can get key performance indicators instantaneously.
How do you make an accurate business decision looking at a financial statement that’s weeks or months old? Cloud-based accounting can help you manage your cash flow much easier. You’ll know what is your outstanding accounts receivable, what is your inventory turnover, etc. You can see today, right now, your cash flow and know where you’ll be a week from now.
Cloud accounting also can be used for a variety of areas, from a sales representative that is tracking expense reports, to time entry and GPS that tracks miles.
And while low cost can be a factor, it’s usually not the highest priority.
Is security still a concern?
It’s always going to come up. But you need to realize that your accounting solution may be more secure on an Amazon server that has been thoroughly vetted and reviewed, than a desktop where somebody can walk off with your laptop or hack into your personal computer.
How can business owners get the most out of their cloud accounting solutions?
Find an adviser, first and foremost. You should align yourself with an experienced adviser — someone with a track record that can recommend and help you build out your end-solutions.
There are thousands of different applications out there. Business owners do not have the time to vet five or six different point-of-sale systems. They don’t have time to figure out what expense report is the best. They don’t have time to figure out which system holds hands with another system.
Even after you chose a product and have gone through the initial training, that adviser can be helpful. You could need to set up specialty reporting or maneuver in the system, as time goes by.
When you implement cloud accounting, you will have to spend some time preparing a timeline and game plan. You have to make sure your employees are trained to utilize the third-party applications that complement the system, prior to operation. You may decide to run the new program simultaneously next to the old system during a transition period; others just switch over. However you do it, you can work with your advisers to ensure it goes as smoothly as possible, and that your history, your comparative financial statements, is still accessible.
Insights Accounting & Consulting is brought to you by BDO USA, LLP