Cloud accounting has become increasingly familiar and hugely valuable to many businesses in recent years, and forecasts suggest that this market will be worth more than US$20.4 billion by the end of 2026, up from just over US$11 billion in 2018.
Research has also shown that 90% of accountants believe there’s been a cultural shift in their line of work in recent years, and the majority believe the sector needs to increase the pace of technological adoption.
If you’re still using traditional accounting methods, you should be on the lookout for signs that it's time to shift to cloud accounting.
1. Remote working has caused problems
The explosion in remote working, caused by the COVID-19 pandemic, was arguably the defining trend of 2020 as far as day-to-day work and business operations are concerned.
Research suggests this won't be just a passing trend. A Gartner survey published in July 2020 showed that 82% of company leaders planned to let their employees continue working remotely some of the time even after people started to return to the workplace. A key finding in PwC's CEO Panel Survey, conducted in June and July 2020, was that both remote collaboration and automation are "here to stay".
Some businesses were better prepared for the sudden shift to remote working than others. If you were still reliant on traditional accounting software, on-site IT infrastructure and manual processes, it was probably a major challenge.
Cloud accounting systems allow members of the finance team to access the tools and data they need from anywhere, making remote working infinitely easier.
2. Manual processes are slowing you down
One of the most frequently cited benefits of cloud accounting is that it includes an element of automation, which allows you to complete routine tasks, such as data entry and invoice management, more quickly and accurately.
If jobs like these are still being done manually, there's a good chance you could save a lot of time by making the transition to the cloud. Furthermore, you could see a reduction in human error, which is always a risk when you're asking people to do repetitive, detail-oriented tasks.
As well as benefiting the business as a whole, moving away from manual accounting processes frees up your employees to focus on more interesting and fulfilling work.
3. You're questioning the security of current accounting methods
If you're used to taking a traditional approach to managing your accounts, security might be a factor that’s held you back from making the move to cloud. Having sensitive financial data stored on a remote, off-premises server might be an alien concept that makes you nervous.
However, there’s a strong argument to be made that cloud accounting is a more secure option than storing financial data on computer hard drives, USB devices or perhaps even in old-fashioned ledgers.
Keeping your account information all in one place raises the risk that, if your storage is compromised - a USB device is lost or your on-site IT is infected with a virus, for example - all of that critical data will be lost.
Cloud accounting services let you save your data on a secure server where it’ll be regularly backed up, significantly reducing the risk of you losing any vital records.
4. One-off fees are causing cash flow problems
The traditional licensing model for accounting software is that you pay a one-off fee to access the technology and services you need for a set period of time. However, paying a lump sum to guarantee you can use vital software might not always be feasible, especially if you don’t have the financial resources and you need to think carefully about how you manage your cash flow.
Moving away from these occasional but potentially large one-time payments to an ongoing, subscription-based model could be preferable if you want more flexibility and control over your finances.
Many cloud accounting platforms give you the option to pay monthly, or to pay upfront if you can afford it in exchange for a discount.
5. Current software is falling behind the times
Dissatisfaction with your current services and a feeling that they're not keeping up with the times are arguably the clearest signs that you need to move away from your existing accounting software and into the cloud.
Unlike cloud solutions, traditional software might not benefit from regular updates, meaning it could quickly become out of date or irrelevant. This can be particularly problematic when you're faced with regulatory changes that impact how you manage your finances.
If you want to feel confident that your accounting practices aren’t just efficient but legally compliant, cloud software is certainly an option worth considering.