coming soon, that connects Quickbooks Online, Tsheets by Quickbooks and Quickbooks Online Payroll.” Another example, currently under development, is the integration of email with Quickbooks Online Accountant, utilizing AI and natural-language processing.
Sage’s Mcdonald noted, “Reporting and analytics are a huge focus for many of our customers. They are always looking for ways to streamline the standard reporting processes, while also gaining the ability to dig deeper into their financial data.”
Multi-entity reporting and multi-entity accounting are features that AccountingSuite customers are asking for, according to co-founder and COO Kurt Kunselman, along with customization of the product and the ability to work offline.
“Our currently most widely used features are workflow automation for bill payment, alerts, customized financials, performance analysis, and dashboards. The common features that customers are asking for are dashboards for mobile devices and customizable text notifications. Accountantsworld is working on implementing those,” said the company’s vice president of marketing, Div Bhansali.
Acumatica’s Legresly added, “We’re always receiving customer feedback and suggestions about dashboards, reporting, and analytics of ever-increasing sophistication. It seems the appetite for those features is insatiable. Our mobile app is very popular with customers and very complete, and yet we still get requests to improve it even further. Finally, again, integrations and automated workflows are in constant demand.”
“Customers are looking for increased user-friendly application of features that may already exist within applications and for more seamless workstreams between their applications,” said Thomson Reuters’ Wiseman. “What does that look like? Mobile apps, online bill payment, bank feeds, easy-to-understand metrics ... and notifications of required actions.”
Taking off vertically
Vendors also expect to experience significant growth in offering vertical solutions in the cloud. “It has always been a focus for Sage Intacct to not just engage with vertical markets, but micro-vertical markets. By zeroing in on a particular micro-vertical, we are able to consistently meet the needs of companies in that category,” Macdonald commented.
According to Oracle Netsuite’s Kelly, targeting verticals is and will continue to be a focus for the company: “Netsuite started by focusing on industries where companies were broadly similar. As we have moved forward, we now provide offerings for key verticals. We are going more in depth within verticals, or what we call micro-verticals, narrower categories with more specific needs.”
Not every vendor we surveyed believes that vertical applications will experience explosive growth. According to Xero’s Richmond, “I do not believe that this will be a major area of focus for the major cloud accounting platform companies. That’s because one of the core benefits of building a platform — as opposed to a specific set of products or services — is that customers have the ability to integrate the vertical-specific applications of their choice. In other words, cloud platforms can serve the broadest possible number of customers by ensuring the core platform meets needs across all verticals, as opposed to delivering a tailored experience for a specific set of industries.”
Can’t we all just work together?
We asked our vendors how they saw cloud accounting developing in terms of working with other applications.
Thomson Reuters’ Wiseman told us, “One of the benefits of the cloud is the promise of integrating previously disparate systems. As firms fully embrace cloud accounting, they’ll see integration growing in two ways. First, as they re-evaluate their current systems, they will look at cloud offerings with the expectation that they can combine many of their previously separate functions within applications that handle multiple functions ... . Second, APIS will continue to grow, allowing previously separated software to work together more efficiently.”
“There are a couple different ways cloud accounting can integrate with other apps,” Zoho’s Ganti said. “The ‘Zoho way’ is to develop software wherein all business applications and the accounting solution are part of the same bundle. This integration is out of the box, and businesses can just log in and get started. Zoho also works with all external vendors even though we provide a full suite ourselves. The other way is for the accounting system to work within an ecosystem. In this case, the user has to purchase the individual applications and set up the integrations.”
“There are two forces at work here,” said Oracle Netsuite’s Kelly. “In the case of true accounting, like revenue recognition or fixed assets, I expect to see these capabilities be part of the core of cloud-based accounting systems. Operationally, for example, a mobile workforce like plumbing or other services that are performed at the customers’ place of business, I expect best-of-breed applications to continue to grow. That said, it will be important to ensure customers are connected to key applications in the markets that they serve or are seeking to serve.”
Working on the blockchain gang
Asked the direction accounting technology will take in the next five or so years, one frequent answer from vendors was that it would incorporate blockchain. “We’re confident blockchain will have a major impact on accounting in the years ahead, but the reality is that it is virtually impossible to predict whether that impact will be felt within the next couple of years, or across a longer time frame,” Bhansali said.
Oracle Netsuite’s Kelly also doesn’t see that quick of an incorporation. “Blockchain is beginning to have an impact, but I do not see it happening as quickly and pervasively as AI,” he said. “Artificial intelligence and machine learning will have a big impact on accounting and finance, and cloud accounting suites must offer this functionality. Many bookkeeping tasks are already being impacted by AI, such as accounts payable and automated data entry and soon payroll, taxation and auditing will be performed by AI.”
Accountingsuite’s Kunselman views blockchain as increasingly important, but just one area where cloud accounting will move. “Blockchain accounting and supply chain will become add-ons for many of these cloud applications. The model will be cloud accounting with ‘sync’ function, a desktop app, a mobile app that looks the same, and the ability to move to private cloud and on-premise in a smooth process for growth purposes. Also, users will be able to back up their account to a digital backup hardware tool such as a USB drive or whatever the next generation is out there. Also, to take it up a notch, cloud accounting will be able to connect with 3D printers for advanced small businesses. Lastly, we will finally get to the collaborative supply chain as the security protocols for applications are enhanced.”
Zoho’s Ganti also had a few thoughts on the topic: “Cloud accounting will move to mid-markets and enterprises. In a few key emerging markets, ‘cloud’ will no longer be a buzzword. Conversational interfaces and machine learning are going to change the way we do accounting. Businesses that have their cloud accounting unified with other systems will realize operational efficiencies. And accounting and banking will start converging. Cloud accounting will be a key success factor in the SME finance business.”
Xero’s Richmond, meanwhile, sees cloud accounting becoming ever more mainstream: “I believe that one of the big trends we will see over the coming years is consolidation across the industry as cloud accounting becomes the default way practices are run. We’ll increasingly see traditional firms looking to partner with, or acquire, upstart cloud-based firms. On the one hand, this will be a defensive move. Traditional firms will understand that they are no longer the default destination for talent because cloud tools provide a much lower barrier to entry, making it possible for an ambitious accountant to start a new practice with little more than a laptop. On the other hand, it will be a proactive move, as firms see that adopting cloud tools is essential to their long-term success.”
Oracle Netsuite’s Kelly echoed some of these sentiments: “At some point the word ‘cloud’ will be removed from ‘cloud accounting.’ As more and more organizations holistically embrace the cloud there will no longer be a distinction of on-premise versus cloud — the result will be cloud-only!”
Leadership is the common denominator of the firms that have great technology and the single most important differentiator between the leading firms and the rest of the pack. Digital transformation requires these skills, and the firms and the clients that don’t have them will struggle. Most firms want to stay competitive and enhance the client experience. Firms also need to sustain margins and be future-ready to make the necessary investments in talent and technology.
The 10 skills that will position you and your firm for the future while sustaining the success of the firm and its clients are listed below (see “Future critical”).
Let’s briefly review each and understand the meaning and context of the skill as it applies to an accounting firm. By the way, these skills also apply to your clients and provide significant opportunities for advisory and consulting services.
This is where growth is occurring in the profession. be, do, have, experience and create? What is your personal vision? It is difficult, if not impossible, to succeed without a defined vision, strategic plan, and an IT strategy to support the vision and plan. Visioning and planning are not only the responsibility of the CEO but also of other firm leaders. This reinforces the fact that IT needs a seat at the management table in today’s environment.
Mindset. Transformation requires skill sets, toolsets and mindsets. Mindsets are the most difficult for most organizations. The gravitational power of the status quo is often greater than the opportunities related to transformation. Some of the most essential mindsets are growth, life-long learning, collaboration, value versus effort, investment versus overhead, and who versus how. At Boomer Consulting, we utilize a “mindset scorecard” to determine where you are today, and where you want to be in six months and one year.
Communications. Any successful technology leader will tell you communication is one of their biggest challenges for several reasons. Too much communication can be as harmful as little or no communication. Also, people communicate differently. Most IT leaders find email is not the solution. Effective communication requires multiple methods, consisten- cy, and the ability to understand the vision and the plan.
Simplification. Simplifying communication, the approach, and agile business processes are all important. Use graphics to explain more difficult concepts. Today, technology can automate or replace processes that add little or no value. This has always been the case in accounting. Some of you remember the 13-column worksheet. Most simplification of process starts with the aggregation of data and workflow.
Governance. Firm leaders often dismiss governance, but it is vital to sustain success, communicate, and remain future-ready. Leadership is paramount, but structuring of the IT task force or committee is also critical. Governance does not have to be overly time-consuming, but does require resources, and internal and external collaboration.
Convergence. Major breakthroughs and productivity gains come when multiple technologies converge. Great examples from the past are tax return preparation software/digital printers and general ledger software/idea. Artificial intelligence, machine learning, and networks and sensors are already changing the way firms use applications and integrate data.
Team building. IT leaders must be able to build collaborative teams with multiple skills and unique abilities. They must also be able to collaborate with external resources like service providers and consultants. Having a clear vision and plan enhances the capability to develop a unique-ability team.
Peer relationships. The ability to connect with peers in and outside the profession is crucial. Even the best leaders can get high on their own supply if they don’t participate in peer groups and attend relevant conferences where they are exposed to new capabilities and thinking.
Innovation. Everyone is talking about disruption and innovation. Understanding the innovation process and being able to bring together hindsight, insight and foresight are extremely important in today’s move from transactional/compliance work to high-value advisory and consulting services. IT leaders must be able to assist in the packaging of multiple services.
L. Gary Boomer, CPA, CITP, CGMA, is the visionary and strategist at Boomer Consulting Inc.