As the modern world evolves, it’s important your accounting firm stays current. One of the best ways to accomplish this is by embracing new technologies. It is expected that hiring of new accounting graduates from universities could drop by as much as 50% by 2020 thanks to technological advances, such as cloud accounting. These advances have lightened the work load for major firms. With a reduction in hiring, there might not be anyone to take over the reins once senior partners begin to retire, and as much as 50% of accounting firms lack a succession plan. Online accounting software eases so much of the day to day operations for firms, but some accounting firms still have not adopted it. Why not?
Your firm might have various reasons for not embracing this new technology, but it’s still worth taking a look into.
What is Cloud Accounting?
Cloud accounting is accounting software that performs your computations on a remote server. You send your client’s information to the “cloud”, where it’s processed and sent back to you, erasing the need for manual entries of all transactions. Imagine handling all the accounting tasks for your firm on a server in the office next door. Your office computers don’t need the software installed taking up space on your computers.
Cloud accounting software has the ability to perform many of the same functions as manual software. But it offers quite a few benefits that you do not get when you install and maintain accounting software on individual desktop or laptop computers.
The benefits of cloud accounting include:
- Frees up space on your office computers
- No software to install
- No programs using up competing time on office network
- Able to access information remotely
- Additional security
- Real-time data
- Less expensive than traditional accounting software licenses
Types of Cloud Computing
The cloud is just a fancy term for a remote server that hosts various applications or creates a platform for the user. There are three major types of clouds: public, private, and hybrid.
A public cloud is the most common cloud available. It’s typically run by a third party and offers services and applications. You manage and access the software provided on a public cloud through your regular web browser, such as Google Chrome, Safari, FireFox, etc. A public cloud can be free or sold on an as-needed basis, and you can count on public cloud to provide high-bandwidth network connectivity that allows you to rapidly transmit your data. Some of the main advantages of a public cloud are:
- Lower cost
- On-demand resources
- No maintenance
A private cloud is a server that hosts computer resources that are only used by a single business. If you opt for a private cloud, it’s for your company’s use only and isn’t accessible by other companies. A private cloud can be located onsite, but doesn’t have to be. Private offsite clouds are usually maintained by a third party.
With a private cloud, various users within the same business share the same resources. Even different sectors or divisions within a single organization can share the same resources. For example, if you operate your business out of multiple provinces or countries, each of your employees from these various locations can access the resources provided in the private cloud. The creation of user accounts are common in a private cloud, and it’s possible to keep track of each users storage, bandwidth use, etc.
A private cloud makes it a snap for larger companies to design, tailor, and implement an application to its own specifications. The company’s information technology (IT) department can handle the maintenance. The major benefits of a private cloud for your company include:
- Outstanding scalability
- Strict security
A hybrid cloud provides you the best of both the public and private clouds. You get the benefits of the onsite infrastructure of a private cloud with the variety of applications and high volume usage of a public cloud.
You may hear the term “cloud bursting” with the use of a hybrid cloud. Cloud bursting is the running of an application or program on a private server while demand is low, but as demand increases, the work moves to the public cloud for faster computing power.
For example, you’re running income statements for your three top clients on a private cloud. You get a call asking for the income statements for your top 50 clients. A hybrid cloud moves the new, larger task to a public cloud to handle the job faster and more efficiently.
Advantages of a hybrid cloud include:
- Cost effectiveness
- Control of programming and applications
- Easy transition into cloud usage
- Flexibility to use cloud resources as needed
How to Embrace Cloud Accounting
Are you ready to take the next step and make life a little easier by adopting cloud accounting for your firm? There are a few ways you can help your team embrace the technology and make the transition seamlessly.
When you’re ready to take the plunge into cloud accounting, take your time. Create a list of the things you currently need and want in an online accounting system. What do you want to accomplish with cloud accounting software? With your list in hand, take a look at the available cloud accounting software to compare such things as pricing, flexibility, security, and training. There are many cloud accounting solutions available today, so research thoroughly to ensure you select one that completely meets your needs.
It’s a good idea to talk to fellow accountants to see if there are specific platforms they recommend. You can join online support groups that cater to entrepreneurs to find out which software the members most prefer.
If your staff seems a bit hesitant to make a switch to cloud accounting, then it might be easier to start slowly. What area of your accounting firm could benefit from cloud accounting in the short term?
For example, if your company handles the payroll for several businesses and your associates tend to feel pressure as these dates near, consider using cloud payroll software in this department first. As paydays approach, the work moves over to a public cloud and your associates can see the benefits of the increased processing power.
Meet with Your Staff
While many of your staff members probably enjoy a surprise party, they probably don’t want a surprise upgrade to the cloud. When you’re ready to move all or part of your firm’s work to the cloud, it’s a good idea to have a short and succinct meeting explaining the exciting, new changes. Ask for input from your workers, and answer questions as thoroughly as possible during the meeting. Remain available and transparent throughout the upgrading process.
Outline the benefits of cloud accounting for the firm and for your employees. You can highlight things such as improved security, faster processing, and ability to access information remotely.
Listen to the Feedback
Some of your staff members may have past experience with cloud accounting. It’s a good idea to find out which employees have past experience and have a private meeting with them. Take notes as they discuss the pros and cons of using cloud accounting, and find out if they have any recommendations. Your workers can be your best resource, so don’t hesitate to heed their feedback. Experienced workers can also help bring inexperienced workers up to speed when using the cloud system. They can also help identify areas of concern and maintain the workflow throughout the transition. Use them to your advantage.
Cloud Accounting Training
If your accounts receivable department is confident with the current software, why would they want to change? Some of the reasons you and your employees may hesitate at embracing cloud accounting or online accounting software include not knowing how to use it.
If you think this might be the case, an outside consultant can provide training. Many of the online accounting software companies offer training videos and provide step-by-step instructions on the usage of their software platform. It’s essential to set aside a few hours or days to train your employees on the new cloud accounting system. This can help build confidence in your staff members.
After selecting the cloud accounting program that best suits your needs, you can learn more about the easiest way to migrate your current files over to the new application. Do your best to clean up files and streamline your company’s work as quickly as possible, so you can return to focusing on your business. Remember that mom-and-pop bakery that was your first client but closed two-years ago when the couple retired? It might be time to remove that info from your accounting system.
While preparing your files for migration, it’s beneficial to start with the larger, more time-consuming clients first. You can let these clients know that you switched over to a cloud accounting system and inform them of the benefits of cloud accounting.
Recognition and Accolades
If you have a couple of standout star performers on your staff, you might consider starting a recognition program to recognize and encourage staff members who embrace the new technology. This program can be as simple or elaborate as you want. It’s a good idea to have a Most Improved Associate award to encourage your more technologically challenged team members to hop aboard and strive to learn.
When you’re ready to commit to cloud accounting, QuickBooks has an online accounting program to make your job of embracing new technology even easier. QuickBooks Online Accountant helps you manage projects, tasks, and clients together. Sign up for free.