The practice cloud is ready to emerge

Suddenly all the tax and practice suppliers are talking about cloud computing. What took them so long, wonders John Stokdyk in the first of a series of articles examining this trend.

For the past seven years, AccountingWEB’s Software Satisfaction Awards survey has helped us to track the adoption of cloud accounting within the UK.

Following the latest round of voting, among AccountingWEB members the level of penetration now sits at 42% - almost exactly the same figure as that quoted in the past few weeks by Intuit and IRIS.

Since it’s an online survey that has included some particularly enthusiastic user pools in the small business accounting categories (47%), the SSA figure may be higher than you would expect from the profession as a whole, but the momentum since 2007 is clear.

Phill Robinson, CEO of IRIS Software confirms that the adoption rate for cloud accounting is accelerating. “Today we have 45,000 end users of cloud technology targeted at accountants and clients. From a standing start three years ago, that’s very rapid growth and it’s more than doubled in the past 12 months. The horizon is getting closer nd we’re expecting to see rapidly increasing levels of adoption in the next 12-24 months.”

The pull of the cloud is undeniable. For the past year, AccountingWEB has been flooded with surveys, webinars, articles and downloadable guides to the subject. But with cloud accounting reaching the mainstream how many people are using it is less interesting than how they are using it, and how it is affecting the way practitioners and business accountants work.

Just before the accountancy profession goes into its traditional self assessment hibernation, AccountingWEB will set out to document in a series of articles what practice applications are available now, what is promised over the next year or so, and how practitioners are adapting their internal and client facing processes for the cloud era.

Continued...

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Comments
Paul Scholes's picture

This will delay my retirement    1 thanks

Paul Scholes | | Permalink

6-7 years back, when the sexiness and novelty of accountancy started wearing thin, I started to plan for all the other things I really wanted to do....(like doing voluntary work at Sutton Community Farm, the biggest community farm in London, that is currently looking for pledges to develop its lovely vegbag scheme - hurry only 13 days left....I'll love you forever xx).....and then along came The Cloud and hosting, and, whilst I'm still going to give half a day a week to the Farm (mentioned above) I have a new lease of Debit & Credit life.

Sitting back and reading John's excellent summary, the bit that rings bells is:

"Changing software isn’t just a question of stopping what you’re doing, installing a new system and picking up where you left off. The hardest part of any overhaul is reviewing your processes and adapting them for the new system. Then you have to educate clients and the software users how the new systems work - and this applies both to the software suppliers and their accountant customers."

What's been interesting to observe about Cloud Accounting is not that so many are now going for it, but that some are merely doing exactly what they did before, with land based systems, only now on someone else's server, ie they are still keeping it to themselves, excluding clients, and even doing nothing about corrections and adjustments until they come to look at the books after the year end.  They are missing the point.

Where I disagree with John's paragraph, is that the change over is particularly hard, both when I hosted all our systems and then as I've moved clients over to Cloud accounting, the transition has been a small price to pay for the almost immediate benefits.

The impending explosion of Cloud based facilities for Accountants' own practice and compliance work means interesting times ahead, with the accountant being the ultimate beneficiary from the battle between the two sides of the industry (Landed & Clouded).

Xero, with its accountant systems already up & running 12,000 or so miles away, threw it's hat in the UK ring some time back and Clear Books has announced this week its intention to do the same, in a novel way, that mimics what my local Farm is doing (the one I mentioned above).

Finally, on the Farm, when I visited to see what I could help out with, they jumped up & down when they heard I was an accountant as they really need help with their Cloud accounting, so I'll leave my spade at home and, dust off my Mac.

one single point of failure    2 thanks

The Black Knight | | Permalink

One single point of failure?

Wait till the broad band goes down.

 

It's all about the quality of the software

neilrobinson5 | | Permalink

I agree that it's handy being able to access information in the cloud. However, for me, when it comes to accounting software, I am far more interesed in the quality of the software. I love QuickBooks. When Intuit brought out their Cloud software, I had a look at it. It was ok, but it was not as good as their original product. I won't be changing.

I don't see any single points of failures

spellinn | | Permalink

If my broadband goes down (rarely these days..about twice a year perhaps) I just fire up the WiFi hotspot on my phone and connect via that. If that proves to slow, I just walk down to the nearest coffee shop and use their free WiFi whilst enjoying a latte.

4G is around the corner and will provide broadband-like speeds to most of the country, allowing access to your cloud-based services from virtually anywhere at office-like speeds.

 

Regards

 

Neil

Lutondata's picture

OK for the slow mo`s    1 thanks

Lutondata | | Permalink

Access to clients through the cloud.  Wow, whats the difference between that and taking a data backup?  OK everyone can use their own obscure program that they have purchased depending who is the new kid on the block. Half the programs we have seen have their own plus`s and minus`s but its no big deal.  They all have disney like interfaces but not that good at actual reporting

For any book keeper worth their salt they would be totally frustrated using cloud based.  The program can`t keep up with the data entry/keyboard strokes.

If I ruled the world everyone would use TAS books, probably the most well constructed program ever.  100% keyboard and a soft Year-end close.  Up to four years P&L in a row etc.  Drill down facility.  Perfect!  Give me a PC based program anytime!

nigelburge's picture

Really?!

nigelburge | | Permalink

spellinn wrote:

4G is around the corner and will provide broadband-like speeds to most of the country, 

Some of us can't even get 3G.

"Most of the country" appears to be a misnomer for "most of the population", but the two certainly are NOT synonymous.

Internet not reliable enough

Marion Hayes | | Permalink

and certainly not country wide.

I spent a few days in Whitby, no broadband even though should have been lots of hotspots, no mobile signal so no mobile broadband, and only one internet cafe. How can you depend on a system which is so unreliable?

I live in south lincolnshire at the extreme of an exchange's range. Broadband can be so slow that there is a minute between hitting the key and the internet realising - ad surprise surprise we are not even being considered for fibre. Our exchanges are not large enough to matter. Mobile signals are also patchy and I daren't imagine the likely cost

 

Not convinced

Jeeves | | Permalink

I can understand the argument for the use of cloud bookkeeping software in collaboration with clients - but I agree with Lutondata that it's slower than a PC-based programme.  I much prefer a combination of VT Transaction + and logmein.

However where I really disagree is with the need to have practice software in the Cloud.  Who would even think of replacing VT or Moneysoft with a cloud-based product?  And if you absolutely must, surely it's now possible just to have the desktop software hosted - surely that ends up potentially being the best of both worlds (setting issues with broadband speed aside) i.e. you continue to use the software you know but can access it from any location? 

Lutondata     1 thanks

WillWood123 | | Permalink

Lutondata 

"For any book keeper worth their salt they would be totally frustrated using cloud based"

You need to try Xero.com - it reduces the time it takes by half over the incumbent desktop based systems. 

Xero allows you to have multiple screens, auto reconciling of the bank, copying journals, unlimited users, automatic bank feeds all this adds up to faster more efficient bookkeepers.

Yes is has some issues but you can leave feed back with Xero and they take it on board and release updates regularly. Try that with the traditional disc selling software providers.

Have I mentioned unlimited support at no extra cost.

Lutondata's picture

Costs?

Lutondata | | Permalink

OK first shot across the bows from Willwood.  I`m not sure I want multiple screens, and certainly don`t want multiple users unless strictly controlled.  TAS is easily networked anyway.  I worked at an accountants in Potters Bar that had 40 plus users.  Half putting in rubbish!  Bank feeds tend to cause a lot of problems from my experience.  I prefer to reconsile as I go along.  There, I`m showing my age!  I just find it faster

I paid around £700 plus VAT for unlimited companies with CIS add-on with Tas around three years ago.  I use it daily with no extra costs.  Its very stable, and if I really, really want to I could pay for an update, though from experience its a waste of money

How much would I pay for unlimited companies with cloud?

15-all?

P.S.  If VT or Money soft ever change, sell, or go to the cloud.  I`m off!!

Had enough fun and games with Taxcalc this year

 

You win on cost but time is

WillWood123 | | Permalink

You win on cost but time is money so we easily re-coup this for our customers in how fast we can produce monthly management accounts.

Another feature of Xero is cash coding you can reconcile similar items for a whole year in seconds. 

There are issues with bank feeds but with some basic checks these can be managed.

We recently saved a client 20 hours a week by linking his internal management system to Xero via its api. We can now finally get internal systems talking to each other CRM, EPOS for small businesses this just wasn't possible before without a decent budget.

Things have moved on and we are 100% committed to the cloud.

I agree with you on moneysoft there is no real reason to put this software in the cloud but bookkeeping software badly needed this. The fact that you can work on the same data as your clients in real time has changed the game imho.

As for practice software - There isn't as big a need but Xero are about to release cloud working papers that link directly into Xero and I know they want to release stat accounts production so if all your systems talk to each other then that can only be a good thing.  

agree

The Black Knight | | Permalink

Lutondata wrote:

OK first shot across the bows from Willwood.  I`m not sure I want multiple screens, and certainly don`t want multiple users unless strictly controlled.  TAS is easily networked anyway.  I worked at an accountants in Potters Bar that had 40 plus users.  Half putting in rubbish!  Bank feeds tend to cause a lot of problems from my experience.  I prefer to reconsile as I go along.  There, I`m showing my age!  I just find it faster

I paid around £700 plus VAT for unlimited companies with CIS add-on with Tas around three years ago.  I use it daily with no extra costs.  Its very stable, and if I really, really want to I could pay for an update, though from experience its a waste of money

How much would I pay for unlimited companies with cloud?

15-all?

P.S.  If VT or Money soft ever change, sell, or go to the cloud.  I`m off!!

Had enough fun and games with Taxcalc this year

 

 

not sure what improves if its in the cloud? not being able to see what's wrong perhaps.

an extra bill for the software and IT industry?

It is the modern way to process a load of rubbish and wait to see if HMRC spot anything. Then charge extra or give your profits to an insurance company.

a bit like putting your car in for an mot before fixing what you know is broken.

 

squay's picture

TAS & Xero    3 thanks

squay | | Permalink

We used all versions of TAS in over 15 years and in the final three years we used TAS Books for Accountants edition. Great program, a few run time errors but nothing serious. In June 2012 I became a Xero Certified Advisor and moved our own practice's accounts to Xero followed by all our clients' data. We kept TAS going for a year during the migration and stopped it this year now that the migration is complete. 

We also used TAS Payroll but TAS jumped ship when RTI came along and gave us Sage payroll instead. We used the opportunity to move to a cloud solution instead. Remote working via the cloud is a real boon so we can work from the office, from home, deal with client queries from anywhere.

The packaged cost of TAS for us was about £1200 ex vat. With Xero we pay per client monthly. If the client wants to use Xero we charge them the Xero fees. Otherwise we absorb them as costs where we use Xero as a book-keeping tool. Annual clients are moved on to the ledger only option at £2pm, Then once a year the plan is changed up for a month, job completed, and then back to ledger only again. Both TAS and Xero do book-keeping well enough but TAS was never going to embrace the features that we now have with Xero such as bank feeds, uploading purchase invoices, importing spreadsheets. For our IT challenged clients where we cannot get bank feeds, or for our annual clients, we use Autorec for creating csv files extracted from paper bank statements and uploading to Xero.  The time and efficiency savings are sufficient alone to realise we made the right move. Add in working from any location and sharing the data with clients, supporting clients in real time, emailing sales invoices and statements direct, things I could never do with TAS, Oh and what about giving TAS clients end of year adjustments journals to do. They often get that wrong. Now in Xero we make the adjustments to the same shared data. Simple.

We are very lucky that, although in rural Dorset, we have decent broadband at the office and home as our village has its own small digital exchange. However we realise that superfast broadband will never happen for us. The cloud is here to stay and we chose to get on board some 15 months ago. Best thing we ever did.

Locutus's picture

Technological shifts

Locutus | | Permalink

I think the cloud is one of those technological shifts that happens to our profession (and indeed the wider community) every decade or so.

From 1990 to 1999 the big technological shift was the increasing use of PCs and laptops.

From 2000 to 2009 the big shift was widespread use of the internet and e-mail.

I'm convinced that in this current decade the big shift will be the cloud.  It's now far too widespread to be a fad, often more efficient than alternatives and facilitates a more collaborative approach to working.

I attended the Xerocon conference yesterday.  Although cloud computing is still in its infancy it is clear to me that by the end of this decade any accountant that says they don't use the cloud in some form will sound as out of touch as one that says "I don't use the internet" in today's world.

Paul Scholes's picture

Don't knock it till you've tried it    1 thanks

Paul Scholes | | Permalink

I can understand the frustration of those with iffy internet connections listening to the majority who have fast or even basic boring connections but what doesn't make sense are those that decry something new (ish) when they have had little or no experience of it.

I'm old enough to remember raised eyebrows in the office when it was suggested that, in an office of 10 accountants, we really needed more than one calculator (and later more than one PC), and similar reactions when faxes, Windows and Quickbooks appeared or when it was mooted (in very hushed tones) that we might one day, do without paper or time sheets.

After reading some of the above, I remember Mrs Whitehouse.

As with squay, my experience in over three years of running everything hosted and with the majority of my clients now running their books in the Cloud, is that you are not comparing like with like when looking at a land & cloud based piece of software.  The better comparison is in looking what more you can do with the latter, than you ever could with the former.

John's article is about practice based applications and comments like: "Who would even think of replacing VT or Moneysoft with a cloud-based product?" completely miss the point, the only bit of practice software there is accounts production, which is only a small part of my Iris software.

Up until now, decent fully integrated practice software, has been pretty much covered by Iris, Digita and 3-4 others but it can take years for improvements to come through whereas fluid cloud based applications can be chopped & changed in weekly timescales, which it's why it's so difficult to draw up a meaningful comparison chart of the features of each cloud accounting application.

The price of these landed practice systems reflects their architecture which is why, if they don't move to the new architecture they won't last, and the above discussion will become academic.

 

It's all about the quality of the software    2 thanks

chatman | | Permalink

neilrobinson5 wrote:
It's all about the quality of the software

Exactly, which is why I do all I can to avoid using QuickBooks.

alan.collett@gomatilda.com's picture

Keep on doing the same old thing ...

alan.collett@go... | | Permalink

... and those who choose to innovate and embrace change will pick up your clients.

Sitting at home in Australia, logged onto our server in the UK.

Best regards.

Online access, hacking

markabacus | | Permalink

Hi

Our practice is split about 50:50 between accounts/tax and book-keeping/payroll services. For the latter we use Sage Client Manager, not a great fan but then I don't use it much. I periodically look at changing it but moving 25+ client's data is not a 5 min job and it would be me that would be doing it in between the a/c's and tax.

Cloud - All very interesting but whilst Sage is not cheap it's a lot less than say £10/mth per client. Yes time is money but I wonder how much people really are saving reading the above and other threads.

Internet - Like one of the other contributors we are Lincolnshire based [North] and our connection is not great either, 2megs if we are lucky. And when it goes down, not often but we have lost it several times in recent years, last year for 3 consecutive days, so that we wld mean no work. 4G, um, hardly get 3G where we live and we could hardly expect it to tether 3 users on our network.

Security - Only last week on our way back from a day out diving my dive buddy [retired, not an accountant] got talking about the Cloud and wondered when it would become the next big target for hackers. Um now there's a thought.

 

A few more benefits of the cloud

WillWood123 | | Permalink

Its not just the time that the cloud saves its also the accessibility. In the past you used to have two copies of  client data, one on your Sage in the office and one with the client.

Now we can both view the data at the same time. What a difference that makes ! We can keep an eye on their bookkeeping and correct little mistakes before they become big ones.

The next issue, for me, is that it is a sad fact that most owner managers don't understand their accounts and one reason is that the bookkeeping package is locked away on a laptop somewhere, in the bookkeepers office or at the accountants.

The Cloud offers unlimited users for your £10 - £25 a month. So now they can log on and check what we are up to as bookkeepers, run their reports etc

Just thought of another reason this is great for clients with more than one business or multi site clients, or for multiple investors everyone can log on and keep and eye on the finances. 

Also I don't know about you but trying to get sage backup as always been a pain. Originally we used to collect them on a floppy disc, then a CD but the cloud has come to the rescue again.

As you can tell I am a convert and I think that IRIS etc will also be in the cloud eventually just because these cloud systems connect to each other. So your cloud bookkeeping will connect to your accounts production and then your tax etc.

Its difficult if your internet connection is bad at the moment but that situation won't last for long. I would be harassing BT to try and get a better service or looking into an alternative.

Hacking - I agree security is an issue but my reasoning is that its in the cloud software providers interest to make sure they never get hacked and also who want to hack a small businesses bookkeeping package anyway. Surely not high on any hackers list?

In my opinion the days are numbered for desktop based software. 

If you are interested here is a link to a blog I wrote why I was converted to cloud software

nigelburge's picture

"In my opinion the days are numbered for desktop based software"

nigelburge | | Permalink

Yeessss well.................

That has been said of desktop PCs for years and years now and they are still around. This idea of everything being "in the cloud" has been around for years too and it still hasn't happened.

Some will work one way and some another - fanatics will insist only one way is best and the rest of us will just continue to do what we have always done - use what is most efficient for us at the present but remain open to change.

Karen Bennett's picture

IT Challenged Clients!!!

Karen Bennett | | Permalink

squay wrote:

For our IT challenged clients where we cannot get bank feeds, or for our annual clients, we use Autorec for creating csv files extracted from paper bank statements and uploading to Xero.  

As SQUAY mentions those IT challenged clients still exist. (Thanks again for the mention). While bank feeds are an option they won’t work for all your clients. 

AutoRec is a data extraction tool for those ‘shoebox’ or incomplete records clients. Using OCR technology, the hard copy of the bank statement is simply scanned on any standard scanner, processed through AutoRec to extract the transactional data into a spreadsheet. It’s even better if you have a PDF or digital file. AutoRec recognises 140+ types of bank statements including paper, online, PDF’s, credit and master card. OCRex is continually adding new statements to our list of supported banks which are released and available to all our clients free of charge. Exports from AutoRec can be directly imported into a number bookkeeping and accounting packages such as Sage, IRIS, VT, CCH, . You can also export to excel or CSV too.

With increasing levels of adoption of cloud accounting solutions, we recognise as software provider we need to react to this demand. A cloud based version of AutoRec is due to be released later this year also. It will also have a different name and slightly different features to avoid confusion.

We have another cloud based application that will be launching soon called DocuRec. DoucRec is a data extraction tool that captures information from invoices, receipts, purchase orders, packing slips, etc. DocuRec is already fully compatible with Xero such that it will automatically send the data straight into your accounts software via the Xero API. Additional API integrations are currently in the process of being added. It is currently in beta phase at the moment.