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Is cloud the answer to accountants' vertical challenge?

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22nd Oct 2014
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Managing director of Twinfield UK Barbara Kroll outlines how the cloud can help firms solve a vertical challenge.

The UK accounting sector currently stands at a crossroads. After generations of solid progress in its core areas of strength, in recent years market dynamics have been challenging the traditional business model and forcing practices to explore new platforms for growth.

Firms have typically structured their operations into distinct business areas – ‘verticals’ – chiefly in the areas of tax, audit and accounts. But as UK regulatory changes contrive to shrink the market for compliance work, and progressive practices exploit advances in technology to deliver more agile and efficient services, they clamour to diversify and add new business areas to stimulate growth has become intense.

In an increasingly competitive marketplace, practices are facing a ‘vertical challenge’ – the need to extend their portfolios with value-based services that go beyond the traditional offerings.

For the firms that succeed, the answers will depend on two things: a willingness to change and the ability to leverage new technology.

Agile, accessible and real-time cloud-based tools are giving firms the opportunity to develop a broader ‘outsourcing’ vertical that extends beyond payroll and bookkeeping and into consultative advisory services. Moreover, although the essence of the vertical is steeped in the core values of basic accounting, the service is not merely tactical – it can bring strategic benefits too.

Some of the UK’s most progressive businesses are recognising the advantages of cloud-based accounting and are outsourcing their entire financial functions to proactive practices that have spotted the opportunity. The age of the Virtual Finance Director is no longer something in the future, it’s now a reality, virtual or otherwise.

The benefits of using cloud-based accounting tools to underpin a high-value outsourcing vertical are significant. The best tools bring immediate efficiency to previously protracted processes; with the inherent ability to scan data directly into the system, intuitive cloud solutions can automate many of the manual processes that plague traditional bookkeeping.

This not only improves workflow but it also removes the need for unnecessary and expensive manual labour – increasing productivity, accelerating outputs and driving significant cost reductions.

These productivity gains can free accounting experts to focus on client liaison, and allow practices to offer additional services such as preparing VAT returns, management accounts and even more advanced business consulting to practice clients.

So what are the barriers to progress?

The most obvious is the standard fear of change that can so often stifle growth. Certainly, migration to cloud-based methodology can appear quite daunting for an established accounting practice – but the perceived headache of implementation should not become an obstacle to development; with the right partner and a structured implementation plan, the utopia of the cloud can easily be reached.

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