Cloud Computing for Accountants



Some computer analysts and vendors define cloud computing narrowly as an updated version of utility computing: basically virtual servers available over the Internet. Others go very broad, arguing anything you consume outside the firewall is "in the cloud," including conventional outsourcing.Cloud computing changes the way we think about technology. Cloud is a computing model providing web-based software, middleware and computing resources on demand.

Cloud computing is a general term for anything that involves delivering hosted services over the Internet. These services are broadly divided into three categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). The name cloud computing was inspired by the cloud symbol that’s often used to represent the Internet in flowcharts and diagrams.

Traditionally, if you’ve used a computer – you’ve installed software (such as Microsoft Word, Outlook, etc.) on your computer, and it, along with the files created, have been stored on your computer. Today, software has migrated to be ‘installed’, and used, on the Internet. And you use it through a web browser such as Internet Explorer, and Firefox, or even a smart-phone such as an iPhone.

Instead of clicking an icon in your START menu to access a program, you can click a "Bookmark" in your web browser to access it. Many people refer to the Internet as the "the cloud", and Cloud Computing is simply "Internet-based Computing", where shared resources, software and information are provided to computers (and other devices, like iPhones & Androids) on-demand, much like electricity!

If you’ve ever used Google’s "Gmail" service, you’ve cloud computed, because you didn’t have to install any software on your computer, you simply accessed your e-mail via a web browser, your activities (replying to, creating messages) and your content were all accomplished & stored online.

By deploying technology as a service, you give users access only to the resources they need for a particular task. This prevents you from paying for idle computing resources. Cloud computing can also go beyond cost savings by allowing your users to access the latest software and infrastructure offerings to foster business innovation.

A cloud service has three distinct characteristics that differentiate it from traditional hosting. It is sold on demand, typically by the minute or the hour; it is elastic — a user can have as much or as little of a service as they want at any given time; and the service is fully managed by the provider (the consumer needs nothing but a personal computer and Internet access). Significant innovations in virtualization and distributed computing, as well as improved access to high-speed Internet and a weak economy, have accelerated interest in cloud computing.

Cloud computing comes into focus only when you think about what IT always needs: a way to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel, or licensing new software. Cloud computing encompasses any subscription-based or pay-per-use service that, in real time over the Internet, extends IT’s existing capabilities.

Cloud computing is still at an early stage, few providers large and small delivering a slew of cloud-based services, from full-blown applications to storage services to spam filtering.

Cloud Computing at a glance

SaaS
This type of cloud computing delivers a single application through the browser to thousands of customers using a multitenant architecture. On the customer side, it means no upfront investment in servers or software licensing; on the provider side, with just one app to maintain, costs are low compared to conventional hosting. Salesforce.com is by far the best-known example among enterprise applications, but SaaS is also common for HR apps and has even worked its way up the food chain to ERP, with players such as Workday. And who could have predicted the sudden rise of SaaS "desktop" applications, such as Google Apps and Zoho Office?

Utility computing
The idea is not new, but this form of cloud computing is getting new life from Amazon.com, Sun, ediaro.com, IBM, and others who now offer storage and virtual servers that IT can access on demand. Early enterprise adopters mainly use utility computing for supplemental, non-mission-critical needs, but one day, they may replace parts of the datacenter. Other providers offer solutions that help IT create virtual datacenters from commodity servers, such as 3Tera’s AppLogic and Cohesive Flexible Technologies’ Elastic Server on Demand. Liquid Computing’s LiquidQ offers similar capabilities, enabling IT to stitch together memory, I/O, storage, and computational capacity as a virtualized resource pool available over the network.

Benefits of cloud computing for your accounting practice

Cloud computing is becoming ubiquitous these days, including some services with household names: Gmail, Google Docs, QuickBooks Hosting and many accounting applications like Bill.com and others. On the business front, applications such as software as a service (SaaS), remote file back-up, file storage, and file synchronization are all considered "the cloud".

While cloud computing may seem too complicated or foreign for small business owners who prefer to concentrate on managing cash flow and growing their business, in reality, it’s a growing tech trend used to reduce risk, save money, increase business capacity, access, and mobility.

  • Manages data loss risk. This is arguably the most critical benefits of cloud storage for your small business. Should your equipment malfunction or disaster occur, such as a computer crash, flood, or fire, you have the safeguard that your business’s data is safe when it is stored through cloud computing.
  • Saves your business money. Cloud computing products can significantly reduce your software and hardware costs. Not only do storing documents on your computers and services consume hard drive space, but software products are expensive, including the additional licenses you may need. Servers. Another huge advantage for many employers is the ability for employees to work anywhere they have access to a web browser and Internet access.
  • Increases business capacity. Cloud storage can free up your internal storage space, which is particularly beneficial if your business is growing. Cloud storage essentially allows for unlimited growth — a great solution and benefit for start-up companies.
  • Promotes mobility and flexibility. Cloud storage enables small business employees to access files while traveling, at a client’s site, or from home. Important documents are readily available at your fingertips through your mobile devices: iPad, smartphone, iPhone, Blackberry, or Android tablet. Multiple people can work on documents, spreadsheets, or presentations even when they’re not physically together.

How The Accounting Industry Is Being Changed By Cloud Computing

The market for accounting and tax services are in quandary primarily because customers are gearing towards bookkeeping services which are less costly and that big accountancy firms are pushing other players out of the high-priced market. However, all is not lost. Accountants must see it as a challenge. With the current financial difficulties everyone is facing, accountants can offer more value-for-money services to small and medium-sized enterprises. Instead of the yearly client discussions, accountants must be prepared to offer interactive services in order to meet the requirements of these SMES who are bracing themselves for another difficult year.

Cloud computing is slowly transforming the accounting industry by offering to streamline accounting processes in order to cut costs and adopt services which add value in a subscription-based scheme. Such services can include tax planning, profitability advices, cash flow forecasts, and real-time approach to scanned invoices. With software-as-a-service, accountants will be able to deliver services in more innovative way.

Accountants must be able to view cloud computing as a big opportunity for them to step up and take the lead in empowering a new phase of business insight in order to understand that they can change the SME’s performance. However, this shift is not an easy one because it will also entail a change in culture and attitude. Accountants do not just adopt cloud computing but must also incorporate a new approach in working which will minimize administrative processes which are repetitive and which will eventually free up gifted individuals so that they can share their knowledge and expertise with the market.

An important part of the cloud computing solution is the integration of document scanning. Invoices can be instantly scanned and posted automatically to the accounting system after which the accountant can check and confirm the entry. Through scanning invoices, cost of processing goes down because the invoices can be scanned in bulk or by every client on their end. Through cloud computing, accounting firms can now compete with those offering low cost bookkeeping services.

By encouraging each client to scan invoices daily, an accountant can have timely information which can be used to provide additional value added services. This powerful capability to offer real time intuitiveness is a welcome service to SMEs. Clients can just log into the accounting firm’s portal to find out how their businesses are performing. They can also asses the currency fluctuation’s impact or track cash flow which is helpful in providing confidence in clients’ business decisions. Accountants can offer new services like business analysis or cash flow forecasting in order to offer an in-depth financial expertise which SMEs will find essential in maintaining or growing their businesses.

Cloud computing is a tool every accountant can take advantage as a leveraging tool so that he/she can retain his/her clients without necessarily slashing his/her fees. With the new technology, an accountant can provide timely reports and advices to SMEs so that they can still be in business. He/she can provide real time perspective to the client’s profitability by undertaking cost analysis and delivering advices on business expansion or transformation. These types of services are highly demanded by customers who need to make difficult decisions. The practice of reviewing the business’s performance has become irrelevant and outdated with cloud computing.

Financial software offered in cloud computing technology provides an opportunity to change and enhance accountant-client relationship. Taking advantage of software-as-a-service, an accounting firm need not invest heavily on server infrastructure or internal IT personnel because most of these cloud computing services are on subscriptions. Monthly subscriptions are also very low to encourage accountants to take advantage of the innovative business model. By reducing IT costs and making information available 24/7 online, the accounting firm’s cash flow is greatly improved.

Although accountants are still generating income despite the current financial situation, the changing market and the clients’ pressure push them to think of innovative ways to maintain their clients because there are bookkeepers who offer their services low and there are also huge accounting firms who are also moving to capture the mid market. Accountants must wake up to realize that the current movements in the accountancy arena have serious implications and that there is a need to make the big leap to change to the new cost base and business model.

Steps Accounting Firms Can Take To Move To Cloud Computing

When an accounting firm decides to take advantage of cloud computing, it is highly significant to consider the internet connectivity because the internet plays a vital role in cloud computing systems. Once you avail of cloud computing, you also have to move to a higher bandwidth internet subscription. As much as possible, you have to buy the internet service offering the best bandwidth availability you can afford. As your accounting firm grows, your bandwidth needs will also grow. Also, you may have to inform your internet service provider about the significant rise in bandwidth usage during the usual accounting busy season.

You don’t need to be locked with bandwidth contracts for a long time because technology is continuously evolving which drives internet service providers to offer more services at a lower price. You may also consider blocking some media sites which stream huge amounts of information to end users. Instead of blocking these sites, some companies initiate internet acceptable use policies which determine acceptable and unacceptable utilization of your company’s bandwidth. However, for better management of bandwidth, you can implement both. You can have an internet acceptable use policy and, at the same time, block sites which stream a lot of data.

When an accounting firm first migrates to the cloud, it is expected that it has no knowledge about which applications to migrate first. Although a lot of accounting applications can be migrated to the clouds, the best and easiest application to migrate is the applications for tax preparations. Tax applications on the clouds offer accountants flexibility because tax returns can be generated anywhere and anytime. This move will greatly benefit those accounting firms who want to improve their employees’ work-life balance. This also benefits the younger generation of employees who desire to work differently than the previous generations ahead of them. More importantly, updates to the tax software become the responsibility of the cloud computing provider.

The next phase of migration must move document or content management of the accounting firm. Document management becomes a breeze with cloud computing. An accounting firm employee will just need keywords or phrases to be able to search voluminous data hosted in the clouds. Recovery of information is faster with cloud computing than physically going through file cabinets for the needed information. Data is also protected and secured from unauthorized access by other employees.

Aside from tax and content, the accounting firm can then migrate other practice areas like CPE and Education Tracking; Employee Evaluation; Electronic Workflow; and Practice Management. Aside from migrating applications specific to the accounting profession, the accounting firm can also move other solutions common with other industries like e-mail. Applications used to collaborate with clients can also be migrated to the clouds. There are applications available which lets an accounting firm bill a client and provides a way for that client to pay online. Most of these applications can even be integrated to the current accounting system being used by the accounting firm.

Moving your applications and data to the clouds may not necessarily decrease overall spending. Although the clouds provide reduced spending on on-premise infrastructure, an accounting firm may need to spend more money on internet service, space allocation subscriptions, and storage. In essence, cloud computing does offer a lot of benefits to accounting firms. However, extreme caution must be exercised in choosing the right cloud computing vendor in order enjoy all benefits the clouds can offer.


About

For over 5 years ediaro.com (a member of Fladio International Nigeria Limited) has provided web solutions and advertising for public and private sectors. Our main division is Computer and Information Technology. Thanks to our flexible approach towards the development of new solutions, we have often been at the inception of digital revolution and incorporating the most recent technologies. When you partner with ediaro.com, you are associating with one of Africa’s best company for your ICT needs, we are the 1st Nigerian Company listed on the Economic Community for West African States (ECOWAS) ECOBIZ computer session in 2010. Focusing on quality, reliability and design of our products and services has brought us customers and partnership with local and Multinational Companies such as United Bank for Africa Plc (UBA), Interswitch Limited, Stanbic IBTC Bank Plc among others. Our current customer portfolio covers individuals, companies and Government agencies across the globe including Nigeria, India, United Kingdom, Mozambique and United States of America.

Share with friends on

Leave a Reply

Your email address will not be published.