3 Cloud Computing Trends that Every Accountant Needs to Know
Your small business clients are adopting cloud computing at a frantic rate. The anytime, anywhere access to key business and financial information allows them to be more efficient and organized than ever.
With this fact in mind, it’s important to understand the implications and opportunities that you, as an accountant, have in delivering more value to your small business clients.
In this article, I lay out the 3 key trends with cloud computing and the opportunities this provides to accountants.
“The rush to cloud during the pandemic also exposed stark contrasts between companies that embrace cloud technologies and those that have resisted or underfunded them. The aggressive move to cloud, already proceeding at a healthy clip before the pandemic, will spike in 2021.” – Forrester
Trend #1: Cloud Computing Will Dominate Small Business
The cloud is proving to be an essential platform for small business owners across the globe and managing their finances often leads the way. Business owners love the anytime, anywhere access to their key financial information and leaving the ‘paper-chase’ behind makes them more efficient and organized than ever.
By integrating other key systems into their unique blend of tools, businesses can now manage everything from inventory and cash flow through to bill payments and expense reports, all connecting with their accounting system and keeping everything organized and up-to-date.
Their confidence in cloud systems matches the high-level of security offered. Key data is automatically backed up and the checks and balances in the systems reduce mistakes and even fraud.
94% of enterprises already use some type of cloud service
So, how many small businesses are moving to the cloud? According to IBM, 94% of enterprises already use some type of cloud service. The reasons are varied as to why small business is embracing cloud computing more than ever, but one of the key reasons is decreased IT costs.
A recent study reveals IT labour expenses were cut in half among 82% of the business that take advantage of cloud computing. Even more telling, nearly 50% of the IT budget is now spent on cloud software (SaaS – Software-as-a-Service).
Although accountants and bookkeepers have the opportunity to drive the growth in cloud accounting, their clients are currently the driving force behind adoption.
Financial pros continue to recognize that the success and failure of their clients often rests in cash flow and sales growth. It appears that too often, accountants remain focused on offering cost-effective solutions for their customers, rather than advising on systems that will help address the most pressing needs.
Helping customers take advantage of cloud computing goes beyond accounting and bookkeeping systems. Accountants have an opportunity to offer valuable advice on business processes and help create a custom system that meets the unique requirements of small business. Accounting and finances often sit at centre of the system and form the foundation for the business.
As many of the processes become more automated, accounting professionals find themselves in an industry experiencing upheaval, yet there is no one in a better position, nor one that small business owners trust more to advise on their business decisions. This environment means that accountants have an opportunity to offer more valuable services if they ride the new wave of technology.
Trend #2: One Size Does Not Fit All
One factor is clear – business owners require systems that fit their specific needs. One size does not fit all.
A company that ships inventory, online, daily has a vastly different set of needs than a service business that tackles a few massive projects each year. Internal and external pressures, industry norms and hundreds of other factors truly make comparing businesses apples and oranges when it comes to processes and systems.
If those needs aren’t addressed, or more likely, a competitor offers a better solution, that customer is gone.
This means that accountants have the opportunity to offer insights that address a wide range of needs by prospective customers. Although the simplicity of the offering is enticing, in the end, the business owner has specific pinch points that they see as core issues. If those needs aren’t addressed, or more likely, a competitor offers a better solution, that customer is gone.
In addition to those business pinch points, there are key metrics and performance indicators that are necessary for small business health. Accountants can provide advice around these key metrics and performance indicators while the cloud solutions that can bring those together in an integrated and easily accessible manner.
Business owners are beginning to understand the increasing marketplace of cloud computing software that can improve everything from efficiency through to profitability. They only need to identify the set that works best for them and connect the system together. And they’re willing to pay for it. In fact, “85% of small business executives are willing to invest more in small business software solutions over the next 5 years.” – Intuit Developer
This trend provides a window of opportunity for accountants to become up-to-speed on the growing list of small business cloud solutions that impact the financial health of small business. The add-on markets for cloud accounting programs can be a good place to start. Thankfully, the leading cloud accounting software platforms offer an extensive network for connected apps to solve this problem.
Trend #3: Niche is the New Black
So, how are businesses approaching this need for customer solutions?
Small business owners are picking highly specific and often niche products that address a list of core issues and connecting them all into a unique but highly effective system. Software developers have taken notice. The new rules can be summarized as:
“Best in breed is replacing integrated solutions as the paradigm for B2B software. SaaS products need to solve one problem well. Good enough for lots of things is no longer accepted. …Build clever software that solves a specific problem. – SaaScribe.com Link it with others to offer customers an end to end business solution.
With the plethora of niche products, it’s easy to get overwhelmed and confused with what is important.
Small business owners are not immune to the “shiny object syndrome” where software is considered cool, but doesn’t deliver on the goals of the small business. As an accountant, you have an intimate understanding of their key financial indicators and ratios and that information and insight can help guide and coach a small business through the cloud computing priorities and systems.
Opportunity Awaits: Your Role as Advisor
Are you as an accountant the best professional to offer advice? And if so, how do you take advantage of this new paradigm?
Not only is it a clear competitive advantage to know and understand how different tools can be hooked together to solve problems, expect your client to demand it of you.
To answer this question we need to look at the core problem that cloud computing solutions solve. They are solving business problems that relate to finances and the processes that impact the financial health of the small business. Cloud computing solutions work to bring improved integration of business processes so as to improve the financial health and visibility of the organization.
With this in mind, it is clear to see that this is a business problem first and a technology problem second. And small business owners need help to engage in the systems thinking that will bring about the right technology solution by identifying the business challenges first.
It’s important to ask which business professional are small business owners talking to gain the insight into the right cloud computing solutions. Not only is it a clear competitive advantage to know and understand how different tools can be hooked together to solve problems, expect your client to demand it of you. Who else is likely to fill this void?
Your small business clients may begin the conversation around the best cloud accounting system they should adopt, but this is only the beginning.
If you understand the cloud landscape and are able to advise on a truly custom system for your clients, you will have gained their trust, their loyalty and their hard-earned dollars. Not only can you expect your customers to seek help in setting up the systems and processes but an ongoing need for advice translating the data into actionable moves that will help them grow their businesses.
This opportunity also highlights the benefits of selecting a few key sectors to focus on as a firm. Become and expert in a sector and you will attract more and more of those high-value clients.
3 Simple Steps to Embrace Cloud Computing in Your Accounting Practice
It’s easy to watch this trend grow while sitting on the sidelines. It may feel a little outside of your wheelhouse. Here are a few suggestions to start dipping your toes into these waters.
1. Understand the strengths and weaknesses of the cloud accounting systems on the market. Which product would serve your client segments and why?
2. Explore the add-ons that exist for these cloud accounting programs and the specific apps that touch on the financial health and performance metrics tracking important to your client.
3. Review a few of your key client accounts and identify the challenges and frustrations around growing their business. With this in mind, think of the ways that cloud computing could help address these problems.
Becoming an expert in cloud accounting is just the beginning. By becoming an expert in identifying key business processes, advising on customized systems and offering ongoing advice will result in healthier, growing businesses and happier clients. Likewise, it will mean business growth for you.