Cloud Accounting Starting Small?

Posted under: From the Blog 22nd of February, 2011

An email colleague is hosting a survey on whether accountants have fully embraced cloud computing at: Accounting firms strongly influence clients’ IT purchases, so their recommendations have real effects on the market. The major firms interviewed apparently still have concerns over data, integration, customization, cost structures, and IT staffing problems.Our own small Cloud Juice experience with the cloud-based accounting system Xero, which was recommended to us by our accountants, has been very positive in terms of the preceding concerns, and more importantly has changed our relationship with our accountants to a very efficient online collaboration.

Data. We can get our data out anyway we like, whenever we like – I doubt if any inhouse finance systems are as open. Xero have obviously recognised this as a common objection to their service and have countered it pretty well.

Integration.  It is integrated with banking systems and any other systems that are useful (to a reasonable proportion of the user base).  I am sure folk can point out integration Xero doesn’t have, but I would probably question how important it was. If it is important, enough users will want it for Xero to implement it.

Customisation. There are many more options to Xero than we could ever use. And options for custom reporting, able to be exercised with the online collaborative assistance of our accountants.

Cost Structure. Xero was offered to us as an alternative to MYOB and Xero’s monthly rate equated to about 10% of a perpetual MYOB licence, but with the addition of full SaaS support managing our data etc. We considered the time and cost of managing the system on our equipment and decided Xero was worth a try. Those ignoring internal costs would baulk, based on false cost comparisions. Google and Dropbox models of free or cheap start entry would be smarter for cloud vendors of accounting software services.

IT staff. Systems like Xero are no brainers for small businesses who have some basic IT skills and are looking to avoid having their own IT departments. Many larger organisations exhibit a kind of love-hate relationship with their internal IT – IT folk need to engage in the real work of their businesses or they will/should be cloud-sourced. How long before large organisations lose patience with IT groups stuck in the past.

Collaboration. But these typical cloud benefits of Xero are nothing compared to the benefits of easily being able to allow your accountant to access your real time financial data. Our relationship with our accountant is very efficient because they are looking at and can help us work directly on the financial data in the system – no emailing of reports or data in spreadsheets. This has been very helpful in developing one of our Director’s skills in using Xero, helping correct data when necessary, streamlining payroll, BAS and other processes.

All the cloud fear, uncertainty and doubt creates good competitive opportunity for those who research the real issues and take managed risks. I think it is a good time for small businesses in general as large orgs are mainly going to be too stuck in their current models – like the big retailers struggling against those selling on eBay.

What do you think?

Please complete my colleague’s survey.

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