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The future of accounting data will rely on the cloud

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The cloud is no longer merely a ‘nice to have’ for accounting – not least because of the rising importance of artificial intelligence and automation technologies.

26th Mar 2024
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Most accounting teams will now be alert to the power of technologies such as automation and artificial intelligence (AI) to revolutionise accounting processes, boost productivity and uncover new business insights. Less widely known, however, is that practices will need strong cloud-based infrastructure if they are to pursue competitive data strategies with automation and AI.

It is becoming obvious that without the cloud, accountancy practitioners will experience significant limitations on any competitive edge they hope to gain through automation and AI. Accounting product providers are increasingly making use of AI to identify irregular transactions or patterns of inconsistency during auditing and financial reviews, and support clients with financial data analysis or forecasting.

Having a solid cloud infrastructure is also a fundamental component of a competitive data strategy. With readily available, real-time data in the cloud, practices can make informed decisions – whether that means moving quickly to capitalise on market opportunities or planning long-term business strategies based on AI-driven forecasting. Scale and security also play a role here: the main reason that real-time data can be stored and readily available is the elastic nature of storage in the cloud. Beyond that, the cloud’s vastly improved security posture is also critical for data security.

Cloud products taking prominence

The reality is that the vast majority of software development expertise is now focused on building cloud-based products. Some sophisticated on-premise systems exist, but today many technology companies are cloud-native, and even those that existed before the cloud are starting to shift to a cloud-first development approach. Building and running applications with serverless systems is easier, allowing for AI and automation applications, many of which would be impossible to host on static servers.

Vendors are also focusing on building tools for cloud-based platforms for ‘data wrangling’ (converting raw data into a usable form) and data visualisation. They are doing so not just because many of their customers store their data in the cloud, but because many of these corporate clients are geographically dispersed and they all require fast, reliable access to data to enable timely business insight.

And, when it comes down to it, data is the lifeblood of AI. The cloud is critical for supplying a pool of data whereby accountants can analyse and extract actionable insights. It is also critical to provide data in a way that is conducive to training AI models so that they stay relevant and improve over time.

Training complex machine learning models also often requires major computational resources. Without the cloud, practices will not be able to secure scalable computing power to run AI at scale.

APIs and AI

The cloud is also key for an ‘API-first’ approach to software development. Application Programming Interfaces (APIs) are the foundational building blocks of modern business software; to work effectively they must live in the cloud so that developers can access and use them to build applications.

As we move into a ‘no-code, low-code’ culture, it is entirely likely that accountants will develop their own AI tools. There’s a growing AI-API market, where developers can access APIs to build AI-powered products and services – an approach facilitated by the cloud.

Companies will look to cloud platforms for help with AI model development and deployment, and elements like machine learning frameworks, development environments, model training, and model deployment services will all be available via the cloud. Accounting practices will need a cloud infrastructure to take advantage of these new tools in a seamless way.

Automation and AI have the power to sift through and make sense of data at speed. But without the cloud, practices will likely struggle to create the flow data needed for these new technologies to be useful. It won’t be long before the cost advantages of deploying automation and AI will become too significant to ignore, and practices not set up to integrate AI will risk losing their competitive edge.

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John Toon
By John Toon
26th Mar 2024 10:33

Looking forward to seeing CCH API on Zapier some time soon? It'd probably make a good t-shirt too...

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Replying to johnt27:
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By FactChecker
26th Mar 2024 18:20

Good luck with the T-shirt, John.

My opinions on the two-edged sword proffered by over-reliance on the Cloud are well known so I won't rehearse them again here.
But a smile flitted across my face when I read: "today many technology companies are cloud-native, and even those that existed before the cloud are starting to shift to a cloud-first development approach."

Partly because that is almost word-for-word what the proselytisers have been saying for at least 15 years ... so will the proposed 'tomorrow' ever be 'today' (and before there's a new magic pill)?

And partly because that is what I was told in 1998 as (in my pre-retirement company) we set out to build from scratch 'the best integrated HR/Payroll' software. Whilst over the first decade of the century the cries grew louder (and a few large clients left us to sample the 'new stuff' before without exception hurrying back shame-faced), I continued to ignore the siren calls of marketing.

Although I've no control any more as to whether the software will eventually crash & burn or re-emerge like a butterfly, we managed without Cloud for best part of 30 years - and staff and clients were very happy with the results.

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Replying to FactChecker:
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By johnjenkins
03rd Apr 2024 16:20

You said it, we should all ignore the siren calls of marketing.
Look what it did to the banks not to mention the union jack.

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boxfile
By spilly
03rd Apr 2024 23:35

Cloud only works with good internet speeds - sadly lacking for quite a few of my more rural clients, so spreadsheets will still rule meantime.

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