Whether you’re running a small business or supporting small businesses, the benefits of cloud accounting cannot be ignored or underestimated. But I feel what we’ve seen so far is just the tip of the iceberg, cloud accounting as we know it today is the start of something much bigger that puts businesses front and centre.
What does your business need when it comes to business software? Or maybe I should ask – what doesn’t your business need?
Cloud accounting makes it possible to throw away your assumptions of what accounting software is and consider what accounting software could be, for you.
What has created this paradigm shift in accounting technology?
It’d be fair to say that until recently desktop accounting software, alongside many other business systems, has worked very well for businesses of all sizes. Accounting software has long been heralded as the one business system you cannot live without. But in the last decade our business tools have expanded and so has our ability to connect with people that matter to our business.
Smart-phones and tablets have mobilised business owners in an incredibly cost-effective way; the value of this to a plumber or a tradesman who travels from job-to-job each day, for example, is obvious. This on top of our growing culture of connectedness has forged change within the software development industry urging us to shape programs and services that work across more than the humble PC; and isn’t this a welcome change.
The other part of this is changing customer/client expectations. If you sell a product it’s likely many of your consumers now expect to be able to purchase it online. If you have clients you may find there is an expectation that you are far more available to answer their questions than ever before. If you’re a supplier you may find customers want an invoice immediately. Cloud accounting systems make it easier to meet customer expectations by being available when and where we need them.
Other key benefits of cloud accounting are:
• no software installation is needed;
• user experience is built with web in mind;
• most commonly only accessible via a browser;
• updates occur at any time;
• users usually pay a monthly fee for access;
• they often have an open API that allows for added tools from 3rd parties;
• they’re accessible on any device.
The next wave of business technology will stretch our current thinking
I’d argue that cloud accounting as it is in the market place today won’t be the same in just few years.
Look at how social media has evolved over the last decade. It may be hard to believe but My Space only began ten years ago and Friendster only the year before. How much these sites have changed. Friendster was the first social platform to be about friends connecting with friends and accepting ‘friend requests’.
Despite My Space and other sites gradually becoming more popular than Friendster the platform did prove that the concept was something people wanted. The success of Facebook today again shows this, but while Facebook is the clear winner in the social media space today the rapid pace of this industry makes you wonder where it will go next.
I think cloud accounting software will have a similar trajectory. First movers in the cloud space are demonstrating that the concept is popular. In the future we’ll see that while the concept of cloud accounting remains true, the way programs and services are purchased, designed and delivered will shift and shape in the years to come.
The revolution has occurred, the rest is evolution
Right now cloud accounting solutions are offered in comparatively the same way we see desktop products offered – you choose the program based on your business size, or based on specific features you need, and pay a set rate. Cloud accounting in this regard is somewhat immature and we can be sure it will move beyond this.
This takes me back to the first question – what does your business need when it comes to business software?
Anecdotally many accountants and bookkeepers who use Reckon software tell me that their clients, small businesses, use less than 50% of the features available to them in their desktop accounting software. While they may have purchased a program with multi-currency or any number of specialised features they don’t need all of them but they come as part of the one package. Quite frankly this means the program is over-complicated and users are paying too much. While up until now cloud accounting solutions haven’t changed this – cloud accounting can change this!
At Reckon we’ll soon release a a modularised cloud accounting program, Reckon One, which allows you to cherry-pick features. If you want only time & billing and payroll they’re the modules you use and pay for. Similarly if you decide you no longer want time & billing you can turn the module off. You could never do this with desktop accounting software, operating in the cloud gives us the capability to stretch our thinking, to offer accounting software in a brand new way.
This program vastly expands upon our current online offering in terms of potential because the possibilities of this program are virtually endless. Over time we could potentially develop a limitless number of modules specific to various industries or business needs that someone could pick from.
Looking at the cloud in years ahead
Cloud accounting is here to stay, but that doesn’t necessarily mean we’ll see desktop accounting software products fall by the wayside, they are still used by the majority of small to medium businesses in Australia today. For Reckon, desktop alongside cloud accounting software and hosted accounting software will remain part of our offering.
To put it simply, Cloud is now another choice, and a very effective one for competitive businesses. Cloud is also evolving and growing at a fast rate. Expect cloud accounting to change far more quickly that its predecessors just as many parts of business continue to change at a rapid rate.
Where do you see cloud accounting in the future?
Hear more about future trends in the accounting industry at Reckon National Conference in Melbourne on 20 September, 2013.
This piece was originally published in the August issue of Taxation in Australia magazine (iPad edition).