Moving clients to the cloud: MTD stick or advisory carrot?

Carrot and stick
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Over recent years cloud software has increasingly made inroads into the traditional heartlands of the desktop accountant.

But has this transition got its roots in the shift to a more advice-based practice model, or has the government’s digital taxation push led the charge? To what extent are practices looking at cloud tools as a compliance solution, or viewing it as a platform for advisory services?

Many practices are now familiar with what cloud tools can offer, but once they’ve made the decision to ‘go cloud’, how do they go about defining a technology direction for the firm and making sure this message is communicated to its staff and clients?

There may be different directions and preferences at work among the firm’s senior management. For example, using cloud to streamline processes and drive compliance efficiencies in a volume model versus building a platform for more profitable advisory services.

‘Second wave’ of cloud

One noticeable correlation has been around when firms chose to adopt cloud tools. Innovative “cloud pioneer” firms built their offerings around cloud application during the past five or so years, and are now exploring how they expand this into new models and ways of working, including a more advisory outlook.

However, later converts appear to have taken up the cloud accounting mantle primarily as a solution to the challenges presented by Making Tax Digital, mainly around getting data into a digital format. The surge in use of digital expenses capture apps like Receipt Bank, AutoEntry, Expensify, Concur and datamolino captured in last year’s awards entry data also supports this.

Data from last year’s Practice Excellence awards flagged a ‘second wave’ of cloud. The cloud growth rate was close to 50% from 2016 to 2017 and has nearly doubled since 2015, with the result that more than four out of five AccountingWEB practitioners had accepted cloud tools into their working lives.

Practice Excellence trends

Last year’s surge, primarily recorded before the government announced a delay to parts of its Making Tax Digital programme, is strongly linked to the need to comply with the regulations. Early results from this year’s Accounting Excellence awards suggests that although movement to the cloud shows no sign of slowing down, more firms than ever are exploring how to use it as part of an advisory model.

Another interesting tidbit from the awards data was the drop in the number of practices calling themselves ‘cloud firms’. One explanation could be that cloud has become so entrenched in the profession that it no longer seems necessary to mention it.

Explaining the business benefits

And the decision to adopt is also not just a one-way process. Stacey Morrison, manager at West Country firm Old Mill, told AccountingWEB that for her practice, which serves a range of clients, some conversions are easier than others.

“For those clients that are more computer-literate, technology-minded and open to cloud-based tools the move is fairly straightforward,” she said, “but for some of our more traditional clients we have to work a bit harder, explaining the business benefits whilst also using the MTD stick.”

Regardless of the reason for its adoption, the cloud juggernaut continues to roll on, and with the introduction of new automation, machine learning and AI tools it looks like cloud will take on new significance for the accountancy market in the years ahead.

We’ll be exploring this and other aspects of accountancy’s transition to cloud in Thursday’s ‘You’ve done cloud, now what’ Accounting Excellence webcast. You can sign up for the webcast here.

About Tom Herbert

Tom is editor at AccountingWEB, responsible for all editorial content on the site. If you have any comments or suggestions for us get in touch.

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20th Jun 2018 12:36

Here's why I moved to the cloud in the end: cost.

PTP (ok it's IRIS) ramped up the price for the software every year until it got to multiple thousands. Cost £200++ per month.

Looked around and a suitable solution was found: Taxfiler. Cost £18 a month.

Of course now Taxfiler has sold out to the IRIS price rampers, I expect they will start the 'add-ons' price hikes (MTD module? That will be £300. Link to something, £300, etc) and I'll be looking for another small software supplier with a basic product that does what I need.

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20th Jun 2018 13:55

Try Taxcalc.

No I'm not affiliated to them any way, or on commission: just a small practitioner.

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