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Cloud accounting: Outlook variable

29th Apr 2015
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Whatever way you turn, "the cloud" is a buzzword that is looming over accounting software. 

Even desktop products like Sage Accounts 50, BrightPay and the IRIS Accountancy Suite are building in online functionality, some as an aside rather than a replacement. And there are products that are embracing the web-based cloud architecture for tasks ranging from bookkeeping to tax and accounts production.

Even accountants who are sceptical about technology's latest buzz can't ignore this trend. This is potentially because of what the meaning behind the buzzword essentially is; a way of working and storing information online, rather than a direct connection to a server.

Whether in a personal or professional capacity, every person visiting this website is using the cloud in some way, whether it’s using various phone apps, Dropbox, Gmail or simply even checking your statements via online banking.

Some accounting firms are choosing a holistic approach, going for on and offline versions and perhaps a hosted desktop.

And there are others who are going for the totally paperless, all-online everything.

There is no cloud one-size fits all, which is clear from the massive ecosystem of add-ons available for many cloud products at the moment. The beauty is picking and choosing what suits you and more importantly your clients.

Yet many remain unconvinced, judging from the debate that took place on a recent Any Answers thread, when AccountingWEB member Tickers asked if all this cloud accounting software was pie in the sky

The no argument:

Tickers argued that it’s more of a ‘new toy’ for clients to play with on smartphones and tablets, and most of them don’t know how to use the products properly. He also argued that the premise is based entirely on internet connection which in some parts of the country are patchy at best.

Some members agreed with some of Tickers points, including John Hextall, who has been working with computers and finance/payroll systems for 30 years.

He argues that the "whole history of software development" is based on the idea that “it will all be fixed in next release” and cloud is no exception. He also queried getting relevant bandwidth outside of cities, but another member counter argued that the amount of bandwidth used while doing cloud accounting is a minor amount. 

A real issue for some appears to be internet connection. Many AccountingWEB members have commented on the site that they cannot get speedy broadband or 3G in their area. However, Paul Scholes said he does log in to his cloud accounting package from a shed in Devon on 3G, which works fine. 

This is of course but one example. What might be more interesting are the government's broadband delivery initiatives (such as this one announced in Budget 2015) and increased roll out of faster mobile internet connectivity such as the expansion of 4G by providers such as EE. But, of course, that means accountants will need to modernise their technological hardware and invest in devices that are receptive to the likes of 4G.

Another issue thrown up by comments is that there is still a feeling of the unknown as to where data is being held. Some firms such as Baker Tilly who offer services via a Twinfield cloud product, carry out their own due diligence on the servers. But for smaller firms, many reputable cloud vendors have noted that customers need only ask and they will explain about where the data is held.

Another no argument is Carolelmcarre, who is very happy with her current system, which she says gives her control over what is processed and how, in addition to it only costing her and her clients one fee. She said that paying monthly would be a pain, but if her client base grew and then processed a significant amount of transactions, it may be useful. 

The yes argument:

There are many accountants who have adopted cloud over the past few years, and it is possible that that number is rising as more and more firms join in on the digital revolution, whether from pressure to keep up with others or the fresh onus on a digital way of communicating with HMRC. 

Indeed there are growing firms which are very enthusiastic about cloud adoption, including Kinder Pocock, Hudson & Co, Pillow May and Tayabali Tomlin.

Members on the thread were of the general perception that the cloud is not yet a 100% perfect product. But, it is the way of the future, a "maturing market" and has made a lot of progress within the last two to three years. 

James Reeves commented: “regardless of where we are now, we are only going one way and that’s online.”

Old Greying Accountant, a member who has spent more than 20 years using desktop software, now uses a cloud product. They say while it was difficult getting used to using it, they find the online help and support to be a positive. 

In addition, cloud can allow those in control of their own practice as they get to 'pick and choose' what to adopt. But ultimately, as Della Hudson recently remarked, you should only adopt what's right for your clients. 

Another bonus (or negative) that cloud provides for accountants is the ability to change work policies such as flexible working and working from home. This works for some firms.  Online and hosted solutions can also change ways of working for accountants, such as allowing flexible working for staff, such as is the case with Egarnham.

Again Paul Scholes shared his experience using a hosted desktop. He advised that there are over two dozen cloud systems out there, and that accountants need to find one fit for purpose and not too advanced for them. 

Other members were "amazed" that other accountants were still sceptical of the cloud. 

ChrisScullard said since his firm adopted cloud, it has totally changed the way they work, who they work with, what they can do, and has increased value and productivity and recovery rates.

"But," he noted, "clients do make a total Horlicks of bookkeeping if left to their own devices, so we only let them have access to what they can be trusted with." 

And KPEM Online agreed: "Everything is going into "the cloud". Might be a fancy new for everything online, but it works better than desktop by miles. The ability to collaborate and integrate online systems and cloud tools is how the biggest impacts are achieved." 

While this conversations represents but a select few of the profession, their views give a good insight into what the main issues for those sceptical about cloud accounting software are and why others seem to love it. As the technology advances and add-on partner lists expand, it will be an interesting area to keep an eye on. 

Replies (19)

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By JC
29th Apr 2015 16:30

The term Cloud …

Started off as an extension to the ASP (Active Server Page), SaaS (Software as a Service) progression which then became known as Cloud

The original descriptions had very specific attributes associated with them, such as - browser agnostic, 100% browser based, multi-tenanted (single app running against single dB for all users) … and so on

Then the marketing boys for companies that didn’t have products meeting these criteria became involved and over-night the definition of Cloud morphed into something very different. For one reason or another these marketing ‘gurus’ decided to hijack Cloud when the name appeared – any number of reasons but mainly because of deficiencies in their own legacy products, where they didn’t want to write proper new systems (with the correct architecture) and yet still wished to extend the lifespan of their offerings

Rather than creating a ‘new’ name for their legacy products they adopted the term Cloud – after all it originally described something new and fresh instead of their existing old, stale offerings and therefore epitomised what they were trying to achieve without actually doing it - smoke & mirrors

Therefore the quick fix was to jump on the Cloud band wagon and use the latest jargon to define historic systems – and they defended their approach ‘ad nauseam’ with great vigour (elsewhere on Aweb) despite the fact that Cloud as it had evolved was a world away from what the marketing people were selling

Hence, enormous confusion arose, which was precisely what these legacy software houses wanted. After all if one could muddy the waters to such an extent that there was no clear definition of Cloud then anything goes and their own rubbish products could then be sold to an unsuspecting public as Cloud

And they have been very successful in doing this - just take a roll call of all those products that have added an internet facility to their desktop apps or gone down the old fashioned client/server route or use Citrix .... or .... the list is endless and revealing because they are conning their customer base over this matter

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By Tickers
29th Apr 2015 20:28

Where exactly are the benefits

This is the part I don't understand...

"The ability to collaborate and integrate online systems and cloud tools is how the biggest impacts are achieved." 

What exactly are the efficiencies that practitioners are achieving with cloud accounting solutions other than clients potentially doing their own bookkeeping?

 

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Teignmouth
By Paul Scholes
29th Apr 2015 23:07

@Tickers

Hi - to answer your question, can I suggest you read the experiences expressed on your "pie in the sky" question, linked in Rachael's piece above.

The proof is in the pudding here when I compare what and how we did for clients 5 years ago to what & how we do for them today.  If that has not been your experience and your clients' accounting records are up to date and accurate 12 months of the year and need only a 20 minute review at the year end before you produce the final accounts, then fine, stick with what you are doing, it has become a pointless debate for me as you clearly think we are making it all up.

 

 

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By Tickers
29th Apr 2015 23:26

Tangible

But all that was possible before cloud accounting software came on the scene so what's changed other than the fact the work is being performed in an internet browser that takes 60 seconds to enter a bank transaction? Other experiences you refer to don't give anything tangible, it's all buzz words like collaboration, synergies, new ways of working with clients.

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Teignmouth
By Paul Scholes
30th Apr 2015 00:09

So I'm lying about my experience?

I'm old and cynical enough to be as dismissive of buzz words and fashions as you, my experiences are tangible and that's all that matters to me..

If it's not the same for you then so what?  Just carry on with how you do things and let us get on with what we do.

 

PS: have a client who enters her 300 per week bank transactions in about 10 minutes in Clear Books, your system takes you 60 seconds per transaction, perhaps your in the wrong system....or even the wrong job?

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Replying to Justin Bryant:
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By Tickers
30th Apr 2015 12:00

I' sorry but...

Paul Scholes wrote:

I'm old and cynical enough to be as dismissive of buzz words and fashions as you, my experiences are tangible and that's all that matters to me..

If it's not the same for you then so what?  Just carry on with how you do things and let us get on with what we do.

 

PS: have a client who enters her 300 per week bank transactions in about 10 minutes in Clear Books, your system takes you 60 seconds per transaction, perhaps your in the wrong system....or even the wrong job?

With all due respect, I still haven't heard what exactly those experiences are? I know it has to do with collaboration and synergies etc etc but how has the cloud changed what you do now that you didn't or couldn't do in the past that wasn't already available?

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By JC
30th Apr 2015 07:54

Advantage for small business users ...

@Tickers - as an alternative to benefits you as a member of the profession expect to receive

Why not turn the whole thing on its head and look at the benefits for the small business (your clients) – after all many Professional Firms may well be driven by the wishes of their clients irrespective of their own preferences – or does one intend to ignore client pressure

One would suggest that a main benefit for business is the concept of access anywhere, followed by being able to have their accountant look at any problems easily on-line

Originally there was an initial resistance to SaaS a number of years ago by Firms because they too could not work out the benefit to themselves, but the driving force of many of their clients over-rode their objections and they realised that they had adopted a rather blinkered approach

Anyway if they wanted a client base then they needed to understand that sometimes / occasionally the client is 'king'

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Replying to the_fishmonger:
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By Tickers
30th Apr 2015 12:10

benefits?

JC wrote:

@Tickers - as an alternative to benefits you as a member of the profession expect to receive

Why not turn the whole thing on its head and look at the benefits for the small business (your clients) – after all many Professional Firms may well be driven by the wishes of their clients irrespective of their own preferences – or does one intend to ignore client pressure

One would suggest that a main benefit for business is the concept of access anywhere, followed by being able to have their accountant look at any problems easily on-line

Originally there was an initial resistance to SaaS a number of years ago by Firms because they too could not work out the benefit to themselves, but the driving force of many of their clients over-rode their objections and they realised that they had adopted a rather blinkered approach

Anyway if they wanted a client base then they needed to understand that sometimes / occasionally the client is 'king'

Yes I get the heavy handed sales approach and the customer is always right jargon but as I said previously, clients don't receive any benefits of these tools because they don't understand the information or how to use it.

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By aburt01
30th Apr 2015 12:03

If you can ...

browse your bank account online, (internet banking has been a great success), why not browse your accounts online in "real-time"?

PLUS, if your internet banking transactions can be "copied" easily, in seconds, into your accounting system then you are starting to see real productivity improvement.

But only if you can do this will you start to see the time savings you crave, and your clients? well,  they will see a reduction in fees!?!?! as well as getting instant access to see how their accounts are "coming along"  ...

But perhaps your internet accounts package can't accept your banking transactions.  

Well, we did not need an online accounts package to achieve that, we have been copying and pasting our internet banking statements into EXCEL on our PC for years, this does the job, and accountants/auditors are happy.

Reduced errors too.

Make sure it works for you, is my message.

 

 

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Replying to bernard michael:
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By Tickers
30th Apr 2015 12:26

square pegs

aburt01 wrote:

browse your bank account online, (internet banking has been a great success), why not browse your accounts online in "real-time"?

PLUS, if your internet banking transactions can be "copied" easily, in seconds, into your accounting system then you are starting to see real productivity improvement.

But only if you can do this will you start to see the time savings you crave, and your clients? well,  they will see a reduction in fees!?!?! as well as getting instant access to see how their accounts are "coming along"  ...

But perhaps your internet accounts package can't accept your banking transactions.  

Well, we did not need an online accounts package to achieve that, we have been copying and pasting our internet banking statements into EXCEL on our PC for years, this does the job, and accountants/auditors are happy.

Reduced errors too.

Make sure it works for you, is my message.

 

 

 

This is whole point. In many instances it's square pegs in round holes because clients want cloud software because that's where everything is going and if you're not on board then you're living in the past which will reflect badly on your practice so accountants are shoe horning clients into these products. Fair enough, I understand clients want cloud products but the benefits of cloud appear to me to be grossly overstated in the context of accounting software at this point in time for reasons outlined previously including internet connectivity and badly developed products.

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By JC
30th Apr 2015 12:42

Not giving clients much credit …

@ Tickers – don’t really agree and this has been borne out by Firms ‘having’ to adopt SaaS products because their clients are using them. Clearly these clients perceive them as useful and despite the initial scepticism of some Firms many are now in accord with their client base - surely that is the end of the story

Alternatively Firms that keep on advocating the ‘old’ ways, potentially at odds the direction of their clients may well come unstuck in due course – time will tell

From the clients point of view – if they can do the following from anywhere – evenings or on holiday etc.; then it is rather a no-brainer because the alternative is visiting the office every time they want some information.

Check debtors/creditorsCheck bank accountsObtain draft monthly figures … etc.

Also how many clients do work from home in the evenings or at weekends

In fact I would argue that your approach is ‘.. heavy handed ..’ – firstly in your assessment of clients ‘.. they don't understand the information or how to use it ..’ and secondly by possibly trying to discourage them from using these products because you can see no benefit whilst ignoring any potential benefit to the client

Anyway your argument is fairly abstruse because like it or not in many cases use of these products is driven by the client – which is how they achieved critical mass in the first place

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Teignmouth
By Paul Scholes
30th Apr 2015 16:03

@Tickers

You asked: "how has the cloud changed what you do now that you didn't or couldn't do in the past that wasn't already available?"

You then stated: "clients don't receive any benefits of these tools because they don't understand the information or how to use it."

I'm not going to waste pages on this as these issues have been asked and addressed many times over the past few years on here and, with respect, I think it's for you to spend some mouse work in reading them.

Assuming you are quoting from your clients' experiences, let me ask you, why don't your clients understand the information and how to use them?  

It may be why many of mine didn't understand Sage or Quickbooks and so made a mess of them meaning I had to correct months after the year end, then didn't have time to tell them where they had gone wrong, besides which another 6 months of mistakes will almost certainly have past.  Next year the same mess and wasted time on my part.

Now, I sit with them (or online over Skype) and ease them into the software a bit at a time, letting them into the bits they are capable of dealing with and, every few days or weeks, login to make sure it's going OK and correcting/guiding them when they go wrong.  When they are dealing with the basics OK, I let them into other areas and do the same thing.  The result is a near perfect set of books at the year end, with the real benefit coming to me year two, when I may only need to login 3-4 times in the year to make sure things are going OK, or to deal with the tricky bits that I feel are better dealt with by me.

That bears no comparison with how I could work with the client 5 years ago.

This is one of the key benefits but, as I say, if it doesn't ring any bells with you then stick with what you know.

As far as clients moving and accountants following, I'm fortunate it hasn't happened to me as I got on the bandwagon years ago and so moved them but I know of one firm recently that lost one of its biggest clients because they (the firm) had been too busy to spend time to investigate the benefits and so were unable to support the client who recognised and wanted to work in the Cloud.

On the other thread you generalised about the naff abilities of the systems and, above, made the "60 second per bank transaction" statement, I may be guessing but I'm not sure you have spent long enough investigating these systems?

 

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By jaybee661
30th Apr 2015 17:06

@Paul Scholes

I just wanted to echo everything Paul has said - my practice will soon be 100% cloud and I don't think it's has ever been more efficient, my clients have never been happier and my turnover has never been as high as it is now.

I suggest @Tickers that you perhaps have a look at what you can achieve if you look hard enough - with Xero for example you can import and reconcile a year's worth of bank transactions probably in about 10 minutes - then with Receipt Bank a client that's 200 miles away from you can scan their receipts/invoices using their smartphone then within a few hours that data can be processed in their accounting software.

I think, as Paul said, if you're happy with your lot, then what's the problem? Surely you just need to carry on as you are?

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By SILLYNESS
30th Apr 2015 20:45

CLOUD

Now we are on Cloud, our providers have control over everything and restrict us from sites they say are a 'security' threat, they don't allow us to download our online bank statements as the script required is a danger....what is my job?  ACCOUNTS!!!! They host our accounting software, email etc!!  Now we have gone with them it will be hard and expensive to go back.........Who regulates the Cloud providers

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By JC
01st May 2015 08:47

Good point about regulation … however ..

@SILLYNESS – sympathise with your predicament

Nevertheless, your scenario seems to allied to the type of non-Cloud (true meaning/roots) referred to the earlier post at the start of this thread – as such it more in keeping with remote hosting than anything else

Proper SaaS/Cloud cannot really be blamed for limitations imposed by the company running ‘your’ off-site servers.

Unfortunately the name Cloud has become synonymous with muddying the waters so that customers don't actually now know what they are buying - which suits the vendors

On the wider matter of actual SaaS regulation – from Aweb Cloud Discussion Forum

https://www.accountingweb.co.uk/group-thread/cloud-industry-forum-not-impressed

https://www.accountingweb.co.uk/group-thread/expired-users-access-their-data

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Teignmouth
By Paul Scholes
01st May 2015 09:46

@SILLYNESS

I echo JC's comments, hosting your own software on someone else's computer is not really Cloud, I still have a copy of QB 2008 on my hosted desktop and if I should ever run it I would not be using Cloud Accounting.

I've been with Hosted Desktop UK for many years and have never had any restriction placed on me over downloaded documents, certainly not from banks.  I do however have to ask them to download any executive documents (again never a problem) but none of the banks I've ever worked with require me to run a script locally?

If I were to have such a problem, I'd download it to my local machine then copy it up to the hosted desktop, HDT UK, provide a shared folder.

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By redboam
05th May 2015 07:12

Is the Cloud Safe?

Whenever I read an article on the cloud I recall this from the FT:

"The transfer of vast amounts of confidential data from a company to a cloud service means relinquishing control of data security."

The whole article:

http://www.ft.com/cms/s/0/4729ed7c-3722-11e3-9603-00144feab7de.html#axzz...

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By JC
05th May 2015 07:46

FT Subscription service ...

@redboam - don't seem to be able to read the link without signing up

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By raybackler
05th May 2015 13:17

Left a bit right a bit!

Many years ago a Marketing Director I worked with likened a company to a ship passing through a shoal of rocks.  The Managing Director was on the bridge and he was in contact with the Marketing Director in the bow, who was passing back directions: left a bit a right a bit.  Meanwhile in the stern the accountant was leaning over as the rocks passed by he was saying to himself "phew just missed that one", as he mopped his worried brow.

The moral of the story is that you can work in practice (as it has traditionally been carried out) by preparing accounts close to the deadline nine months after the year-end and be a member of the "phew just missed that one" brigade OR...

You can embrace cloud accounting where you and your client can collaborate as the year unfolds.  They use the parts of the system best suited to them, like invoicing customers and adding supplier invoices.  Whereas we, perhaps, reconcile the bank transactions and alert them to overdue customer invoices, process the payroll and the VAT returns etc.  In this role you can join the Marketing Director in the bow and help steer the ship.  This is a much more valuable and pro-active service to provide.

As Paul Scholes indicates, preparing the annual accounts is a by-product and can be accomplished with a small amount of work, because the accounting records are up to date.  They are also accurate, because the accountant has been working on them during the year.  That is true collaboration that cannot be achieved with desk top software.

Security of data is a dead issue, provided you carry out due diligence on your supplier.  Availability of broadband is also a dead issue, as even the slowest broadband will cope very well with cloud accounting.  We are not talking about graphics hungry applications, we are talking about text and numbers here.

Cloud accounting is the future and those in practice who don't embrace it for small and medium sized businesses will get left behind.

 

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