A con­tin­u­ing evo­lu­tion

Cloud ac­count­ing soft­ware takes its next steps

Accounting Today - - Technology - By Ted Needleman See EVO­LU­TION on 23

Like many things, ac­count­ing per­formed on com­put­ers has come a long way in the last 50 years, es­pe­cially re­cently. While many firms and clients are still us­ing desk­tops, an in­creas­ing num­ber are us­ing those PCS to con­nect with ap­pli­ca­tions and stor­age lo­cated else­where. And the ex­act lo­ca­tion of this “else­where” has be­come less im­por­tant than know­ing that the com­pa­nies of­fer­ing these ser­vices are re­spectable, re­spon­si­ble, sta­ble and af­ford­able. To­day, more and more firms and their clients are mov­ing from in-house to the cloud, and this trend shows no signs of slow­ing down. As in past years, we’ve turned to the ven­dors of cloud ac­count­ing so­lu­tions for an­swers and in­sights.

Where are we go­ing?

One of the first ques­tions we had for the sur­veyed ven­dors was where they thought the ap­pli­ca­tion was go­ing in the im­me­di­ate fu­ture — the next two or so years.

To­ward greater pro­duc­tiv­ity and re­quir­ing less hu­man in­ter­ac­tion was an an­swer that we re­ceived from many of our re­spon­dents. “Over the next few years, we’re go­ing to see more and more as­pects of au­to­ma­tion, ma­chine learn­ing and AI in­cor­po­rated into cloud ac­count­ing sys­tems. First, we’ll see de­vel­op­ments rapidly short­en­ing, and ul­ti­mately elim­i­nat­ing the need for go­ing through a monthly close,” said Tay­lor Mac­don­ald, se­nior vice pres­i­dent of chan­nel sales for Sage In­tacct. “Look­ing fur­ther down the line, we’ll see Ai-en­abled pro­cesses giv­ing cus­tomers greater in­sight into their data, such as a con­tin­u­ous au­dit.”

Ben Rich­mond, vice pres­i­dent of busi­ness growth at Xero, saw change hap­pen­ing in three in­ter­re­lated ar­eas, start­ing wtih in­creas­ing au­to­ma­tion of the pro­cesses. “While there is lots of hype, there is also tan­gi­ble ev­i­dence that this new tech­nol­ogy can pos­i­tively change the way ac­coun­tants, book­keep­ers and small busi­nesses work,” he said.

Rich­mond also fore­sees greater col­lab­o­ra­tion be­tween ac­count­ing plat­forms and fi­nan­cial in­sti­tu­tions: “Banks are in­creas­ingly look­ing to part­ner with in­no­va­tive fi­nan­cial tech­nol­ogy com­pa­nies in or­der to meet cus­tomer ex­pec­ta­tions. Small busi­nesses face per­sis­tent chal­lenges ac­cess­ing cap­i­tal, get­ting paid on time, and ac­cess­ing their data. Banks are in­creas­ingly re­cep­tive to work­ing with tech com­pa­nies to ac­cel­er­ate in­no­va­tion and de­liver new so­lu­tions to these age-old prob­lems.”

He pre­dicts more fo­cus on solv­ing the end-to-end needs of ac­coun­tants: “As au­to­ma­tion tech­nol­ogy be­comes in­creas­ingly preva­lent, and data is shared more seam­lessly be­tween the core prod­ucts and ser­vices that small busi­ness uses, cloud plat­forms will look to build the fi­nal mile of the jour­ney by de­liv­er­ing end-toend prac­tice man­age­ment so­lu­tions for ac­count­ing firms. These so­lu­tions will al­low firms to fully dig­i­tize their prac­tices. Even firms who con­tinue to fo­cus on tra­di­tional com­pli­ance work will have the op­por­tu­nity to ben­e­fit from the cloud.”

Prashant Ganti, the head of prod­uct mar­ket­ing for Zoho Books, agreed about the col­lab­o­ra­tion be­tween ac­count­ing and fi­nan­cial in­sti­tu­tions. He also saw cloud ac­count­ing gain­ing trac­tion in the de­vel­op­ing world be­cause of tech­nol­ogy-driven com­pli­ance be­ing in­tro­duced by var­i­ous govern­ments. Fac­tors such as online tax fil­ing, manda­tory record-keep­ing, and e-in­voic­ing are play­ing a ma­jor role in the adop­tion of cloud soft­ware.

“The abil­ity to eas­ily con­duct busi­ness on a global ba­sis while si­mul­ta­ne­ously be­ing able to trans­act busi­ness on a lo­cal level will be very im­por­tant as or­ga­ni­za­tions look for growth in­ter­na­tion­ally,” is also an im­por­tant area where cloud ac­count­ing will grow ac­cord­ing to Tom Kelly, se­nior di­rec­tor of mar­ket­ing and man­age­ment at Or­a­cle Net­suite.

Acumat­ica CFO Nigel Le­gres­ley added, “We see con­tin­ued mo­men­tum as still more com­pa­nies move to the cloud, of course, and while cloud ac­count­ing will be de­pen­dent on the speed and com­plete­ness of that tran­si­tion, some changes are al­ready quite ev­i­dent: sim­pler, more in­tu­itive user in­ter­faces, the im­por­tance of mo­bil­ity, and the use of ma­chine learn­ing to re­duce hu­man er­ror and repet­i­tive man­ual tasks. Au­to­mated and cus­tom­iz­a­ble work­flows will be crit­i­cal as the ac­count­ing func­tion re­sponds to the in­creased speed re­quired by a dig­i­tal busi­ness.”

Christina Wise­man, prod­uct man­ager of cen­tral­ized ser­vices and tran­si­tions at Thom­son Reuters, sees in­creased func­tion­al­ity and pro­duc­tiv­ity in other ar­eas. “Many ex­ist­ing fea­tures will be more heav­ily used, such as the dig­i­ti­za­tion of pre­vi­ously pa­per items, elec­tronic no­ti­fi­ca­tions, and time clock fea­tures. We will start to see more user-friendly de­ploy­ment of such fea­tures and see them used more broadly. For ex­am­ple, tak­ing no­ti­fi­ca­tions be­yond doc­u­ment shar­ing and more in­te­grated in work­flow. We’ll see much more e-com­merce ca­pa­bil­i­ties, in ar­eas such as online bill pay­ment, and mer­chant so­lu­tions. We’ve seen data en­try re­duced by in­te­gra­tion — we’ll see more elim­i­na­tion of data en­try by tech­nol­ogy such as bank feeds and re­ceipt recog­ni­tion.”

Speak­ing of fea­tures

We asked our ven­dor re­spon­dents what fea­tures they are be­ing asked to add.

“To­day’s ac­coun­tants want a one-stop shop to ser­vice all their clients and man­age all their em­ploy­ees across their en­tire firm,” ac­cord­ing to Ariege Mish­erghi, global leader of the ac­coun­tant seg­ment, small busi­ness self-em­ployed group at In­tuit. “We’re also find­ing that ac­coun­tants are in­creas­ingly lever­ag­ing third-party apps to serve their clients and want the abil­ity to eas­ily rec­om­mend and in­te­grate apps on be­half of their clients.”

In­tuit is cur­rently de­vel­op­ing new fea­tures that will pro­vide even more func­tion­al­ity, she said: “These in­clude Project Prof­itabil­ity — an in­te­gra­tion,

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