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The Advantages of Using Technology in Accounting: Why The Cloud is Crucial to Your Growth

12th Jun 2024
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sliverfin

Cloud software with live client files, connected workpapers and AI you can trust.

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Accounting firms face many challenges, from handling vast amounts of data to ensuring compliance with evolving regulations. 

These daily pressures can make it hard to stay up to date with technology and its new or improved advantages. One of the most common and risky is a continued reliance on familiar desktop solutions, which can hamper growth and efficiency. 

Here’s how your legacy software is holding your firm back, exposing it to unnecessary risks, and the advantages of using technology in accounting to solve these problems.

Why The Cloud is Crucial to Your Growth
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The Risks of Desktop Solutions for Accounting Firms

  1. Security Vulnerabilities

PwC's Global Economic Crime Survey shows that almost two-thirds of British businesses experienced fraud, corruption, or other economic crime between 2020 and 2022.

Desktop solutions for accounting firms fall short of providing the necessary security to protect sensitive financial data against these attacks. Unlike cloud-based systems, desktop software lacks advanced encryption, multi-factor authentication, and continuous monitoring capabilities, making it more vulnerable to cyber-attacks like phishing, malware, and ransomware. 

Moreover, desktop solutions rely heavily on local storage, which can be easily compromised through physical theft or unauthorised access. Regular updates and patches are crucial for maintaining security, but desktop software often requires manual updates, increasing the risk of running outdated and vulnerable versions. 

  1. Lack of Real-Time Data and Collaboration

Desktop accounting solutions severely limit accessibility, confining the flow of financial data. This restriction means accountants aren’t working with real-time data, which can be highly impractical and inefficient, especially in today’s increasingly hybrid work environments. 

The delays in accessing critical financial data can impact your firm’s ability to respond to opportunities and threats, hampering your profitability and competitive advantage.

Additionally, desktop solutions are not designed for seamless collaboration. Multiple users cannot work on the same documents simultaneously, leading to workflow bottlenecks. Without centralised access, firms struggle to ensure that all team members are working with the most current information, potentially leading to errors and inconsistencies in financial reporting.

Read more: The Hidden Cost of Excel in Accounting: How Spreadsheet Dependence Fuels Burnout

 

  1. Inefficiency and Redundancy

One of legacy systems' biggest challenges is their reliance on manual processes. Accountants frequently need to enter data multiple times across different systems, which consumes valuable time and increases the likelihood of human error. 

This duplication of efforts results in wasted work hours that could be better spent on more strategic tasks such as financial analysis and client advisory services.

The lack of integration between various desktop applications leads to more data inconsistencies, further complicating reconciliation and financial reporting and requiring additional time for review and correction. 

This fragmented approach to data management hinders workflow efficiency and makes it difficult for firms to maintain accurate and up-to-date records

Read more: The Limitations of Excel for Accounting: Why It's No Longer The Go-To Choice for Working Papers

 

New Advantages of Using Technology in Accounting

  1. AI in Accounting

Artificial Intelligence (AI) addresses many of the inefficiencies and risks associated with desktop accounting solutions by automating tasks, enhancing accuracy, and improving data management. 

One major issue with desktop solutions is the inefficiency caused by manual data entry and the subsequent risk of human error. AI tools like Silverfin Assistant solve this by automating anomaly detection. 

The system continuously analyses client files to find unusual balances, missing transactions, and outliers. Automatically flagging these discrepancies and suggesting fixes saves your firm from hours of manual checking while improving accuracy and client satisfaction.

“Instead of reviewing the data manually, we ran it through Silverfin Assistant. The tool ran around 100 checks and spotted three or four opportunities that were ‘nice to know’ but also four errors that were spot-on. It would have taken an accountant 30 minutes or more to dive into the file and find those anomalies.” Russell Frayne, Director of Transformation at Gravita

Read more: The AI Advantage: Why AI and Accountancy Goes Hand in Hand

  1. Greater Data Accuracy and Standardisation

If your firm relies on manual data entry, you’re most likely dealing with costly errors and wasting time with frequent corrections.

Cloud-based solutions like Silverfin help you avoid all these pitfalls by giving you high-quality data and a strong foundation for accounting automation.

Using a connected data hub and integrations with leading accounting tools, Silverfin automatically collects the information and standardises your client data using a built-in AI mapping tool.

Your firm will immediately benefit from enhanced data accuracy by automating tedious processes and ensuring your team only works with the latest financial information.

 

  1. Cloud Access

One major risk of desktop solutions is that they restrict the flow of data access. Accountants who need to work remotely or travel lose access to critical information stored on offline systems. 

Cloud-based platforms like Silverfin offer unparalleled accessibility, allowing accountants to access financial data from anywhere, anytime, using any device with an internet connection.

Moreover, cloud access enhances collaboration within accounting firms. Multiple users can work on the same documents simultaneously, ensuring that everyone is up-to-date and reducing the risk of errors due to outdated information. 

This real-time collaboration is especially beneficial for firms with multiple offices or remote employees, as it ensures seamless workflow and consistent data management across the organisation.

“There are a lot of other software companies out there who claim to be cloud but aren't fully cloud. We wanted to make this change once and not encounter access, update or other issues in the future. We were really drawn to Silverfin as you can log-in with any web browser anywhere and the interface is extremely easy-to-use.” Mark Thurston, Director, Gascoynes

 

  1. Enhanced Security

Enhanced security is one of the most compelling advantages of cloud-based accounting solutions.

With robust encryption methods to secure data both in transit and at rest, these protocols ensure that even if your client’s data is intercepted, it remains unreadable to unauthorised parties. 

Regular automated backups in cloud environments protect against data loss due to hardware failures or cyber-attacks, offering a level of data protection that desktop systems typically cannot match.

Additionally, cloud platforms provide multi-factor authentication (MFA), which adds an extra layer of security by requiring users to verify their identity through multiple methods before accessing the system. 

Cloud providers also employ continuous monitoring and regular security updates to stay ahead of potential threats and are designed with compliance in mind. They often adhere to strict regulatory standards such as GDPR, ISO 27001, and SOC 2, ensuring that financial data is handled according to the highest security protocols. 

This compliance helps accounting firms meet legal requirements and maintain client trust.

Read more: Why and how the cloud is the safest place for your accounting firm’s data

 

Unlocking Efficiency with Finance Automation Software

Desktop solutions in accounting are fraught with risks that can impede your firm's growth and efficiency. 

Why not embrace the future of accounting? 

Cloud-based platforms like Silverfin offer a multitude of advantages, from enhanced security and data accuracy to cost savings and improved client service that can help your firm stay competitive and efficient.

Request a demo with Silverfin today and take the first step towards transforming your accounting processes.

 

Frequently Asked Questions

  1. Why should accounting firms move away from desktop solutions? Desktop solutions pose security risks, limit accessibility, and involve high maintenance costs. They also lack the efficiency and accuracy provided by modern technology.
  2. What are the key benefits of finance automation software for accounting firms? Finance automation software helps accounting firms reduce manual data entry, minimise errors, and save time on repetitive tasks. It allows for real-time financial reporting, enhances data accuracy, and improves client service by enabling faster response times and better advisory services.
  3. How does automation software enhance compliance and regulatory reporting for accounting firms? Automation software ensures accounting processes adhere to current regulations by providing regular updates and built-in compliance checks. It simplifies the creation of audit trails and the preparation of regulatory reports, reducing the risk of non-compliance and associated penalties.
  4. What cost savings can accounting firms expect by adopting automation software? Adopting automation software can lead to significant cost savings by reducing the need for manual data entry, minimising errors, and decreasing the time spent on routine tasks. Additionally, firms save on IT infrastructure costs and benefit from scalable pricing models that align with their growth.