Corporations continue to pay for accountancy and audit services to achieve regulatory compliance, as they must, but with cloud-based book-keeping solutions now available that can streamline processes and facilitate the provision of a real-time accountancy service, traditional delivery mechanisms are no longer essential. How should finance professionals from the treasurer to the chief financial officer (CFO) and boardroom executives respond to this new landscape? What impact will it have on the way they run their businesses and the way they interact with their accountants and partners in the financial supply chain?
Online accounting solutions can offer the end user simplicity and ease-of-use, combined with 24/7 access, reduced upfront IT and admin costs, and genuine scalability. The move towards online accounting in the cloud is not, however, without its challenges, with the on-going fees just one of many benefit versus cost elements that users should examine before taking the plunge.
Cloud-based book-keeping solutions can simplify and automate accounting functions, turning a traditional service – typified by the attitude that ‘my accountant does my books’ into something that may feel more like a commodity from the corporation’s viewpoint. Just as traditional, face-to-face banking is being challenged by online banking, and High Street insurance brokers have largely been replaced by comparison websites, there is the potential for online accounting to de-personalise accounting services and encourage a transaction-based mentality. This may suit some corporations better than others depending on their requirements and need for personal service or guidance.
The main benefit of online accounting for users is the ability to log into the online system via their accountant’s own website. Monthly fees for the software can be incorporated into a single, inclusive charge for accounting services. Less staff may be necessary and certainly less complication. By tying the technology and service elements together in the cloud using Software-as-a-Service (SaaS) deployment mechanisms, you can create a holistic service.
Secondly, collaborative working can be encouraged by online accounting. This advantage arises quite naturally from the fact that when accountancy firms and their clients use an online SaaS accounting system it can be as effective as if they were sitting side-by-side, looking at the figures together, especially with back-up Skype, virtual private networks (VPNs), support agents and other support services easily available if so specified. When either party enters new information into the system, it’s immediately available to all parties in the financial supply chain, enabling continuous review and immediate remediation of problems. This should translate into simpler, more efficient operations for the treasury and other professionals in corporation’s finance functions.
At the moment it is typical for businesses that rely on traditional physical accountancy services and site visits to meet quarterly or even sometimes annually if it is a small firm. Occasionally, clients supply source documents or send in files into the accountant for processing and they might meet later to discuss the results.
Online accounting systems can encourage collaboration and bring the accountancy function closer to a firm’s everyday operations. Potentially this can mean:
Keeping ahead of the market: as collaboration sets you apart from the global market and gives you a distinctive character. Clients and accountants who work collaboratively through an online accounting system tend to have a much stronger working relationship and partnership, which should translate into real-world benefits. Whether it’s enough to replace a one-to-one relationship depends on the size of the firm, but for large-scale corporations that act more transactionally it is more appropriate.
Allowing real-time decisions: Having shared access to accounting data allows all parties access to view information which is updated in real-time, which can be useful to treasurers undertaking daily cash management activities. Online accounting systems improve financial insight for forecasting purposes too and make it much easier to assess the impact of business changes. Improved decision-making will ultimately improve company performance. Collaborative working, based on real-time financial data, opens up the possibility to get advice instantly rather than just at quarterly or annual reviews.
The Future is Collaborative
Online accounting is already having a huge impact on the service offerings available to CFOs and other finance professionals and the rate of change will only accelerate as more and more companies make the switch. Like all new technologies, online accounting in the cloud creates challenges and change; however it’s clear that the benefits are gaining adherents.
Probably the most significant opportunity to realise benefits is via the aforementioned collaborative working practices. Only through online accounting can clients and their accountants work in parallel on the same real-time financial and business data to help inform decision-making and improve business performance.
The businesses that make the most of these new, collaborative opportunities and embrace new technologies in this way will undoubtedly be laying the foundations for continuing sustained growth.
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