Cloud Computing Becomes Crucial for Accounting Firms
By Samantha Mansfield
“‘The Network is the Computer’ was Sun Microsystems’ slogan of the 1990s. It described what computing has now become,” says Nicholas Carr in his book, The Big Switch: Rewiring the World from Edison to Google; the internet has become our computer. Purchasing a PC or laptop today is less about the computing power of the machine itself and more about the mobility and security it can offer while it accesses the internet and cloud-based software.
The World Wide Web became available in the U.S. on April 30, 1993. Its main use quickly became one of commerce, as opposed to a place for meeting and sharing knowledge. Having access to the internet has become as vital to a business as electricity. The pandemic only accelerated the growth of e-commerce adoption and the accessibility of remote work. As the percentage of workers, leaders and decision makers who have never lived without the internet grows, it becomes even more vital for businesses, including accounting firms, to incorporate cloud-based workflows and interactions into their normal operations.
Adopting a Cloud-first Mindset
Computing power has become a commodity. No longer does a firm require the financial means and technical knowledge to launch high-powered, sophisticated systems. There are many providers that will host your software and data. For approximately two decades, technology companies have been investing in hosted and cloud solutions. Well-established companies, like Caseware, have cloud-based versions of their offerings, with these online versions poised for the greatest growth.
With 85 percent of Americans saying they go online daily, according to Pew Research’s Survey of U.S. Adults, conducted in 2021, and another 31 percent who report being online constantly (this number goes up to 42 percent for college-educated adults), firms that want to compete for top talent and clients need to have an online approach to conducting business.
The Pandemic Effect
Cloud computing took on even greater importance during the pandemic. Mobility became crucial to keep businesses functioning. The U.S. Bureau of Labor Statistics reported in July 2021 that 65 percent of employed, college-educated adults worked from home, up from 19 percent in 2019. Organizations that were already leveraging cloud software and laptops were able to swiftly move their teams to safely work from home without skipping a beat in client service.
Looking forward, Gartner states in their Top Strategic Technology Trends for 2021 report that “An anywhere operations model will be vital for businesses to emerge successfully from COVID-19…The model for anywhere operations is ‘digital first, remote first."
As we define the next normal, remote and blended work environments will continue to exist. Organizations are standardizing policies for remote work and flex schedules. Accounting professionals have proven accounting can be done remotely.
Data has shown employees being more productive when they are working remotely, in part because of fewer distractions. Some firms have reported billings are up while hours are down. This efficiency is only possible through the use of cloud-based applications and fixed-fee and value pricing. Not only is this transforming how we work, it has redefined the services the profession is providing.
Remote Accounting Realities
Remote audits had been discussed long before COVID-19 disrupted our lives, but the topic really grew during the pandemic. Organizations found that their staff and clients preferred remote auditing to auditors traveling to client locations. Instead of clients handing over the files and the audit team sitting in a conference room, clients were able to digitally deliver their files. The auditors are still able to collaborate as a team, share files and divide tasks.
Cloud software keeps them all working with the same data and current work papers. Concerns over version control of files, backing up data and ensuring laptop applications are current are eliminated. The audit team’s time is devoted to the task at hand: performing a high-quality audit engagement. Now when they meet with the client, it is purposeful and creates more value-add in the eyes of the client. More firms are recognizing the efficiency and possibilities of remote auditing.
There are various regulations that prevent auditors from performing some audits completely remotely, but many of these situations are being reviewed to ensure audit procedures stay relevant and incorporate the technology that adds to accuracy and quality. Some regulations and standards don’t account for the use of data analytics tools, artificial intelligence (AI) and remote procedures, but the rules are being evaluated now by the governing bodies.
Auditing’s Digital Transformation
Like most industries, auditing is going through a digital transformation. The profession began digitizing - moving from manual processes to digital forms - 40 years ago. Digitalizing involves doing things in new and better ways that drive improved outcomes. Digital transformation leverages all the digitalization that has occurred to redefine how we create synergy between people, technology and processes, and also how we create services that are relevant today and will be in the future. Digital transformation in auditing means utilizing cloud technology, working remotely and incorporating AI and data analytics to deliver more efficient and insightful results.
Technology adoption accelerated five years in less than six months during 2020, according to multiple sources. McKinsey and Company found the largest changes are the most likely to stick; the move to the cloud was noted as being more than twice as likely to remain in place. Those organizations not in the cloud will have a harder time competing for talent and clients as more and more of us are appreciating the computing power and flexibility it provides. The time to move is now.
Caseware is helping accounting firms seamlessly adopt cloud technology to ensure they are equipped for today’s - and tomorrow’s - challenges and opportunities. Learn more about Caseware cloud today.
Samantha Mansfield is a Michigan-based consultant, public speaker, and founder of Samantha Mansfield LLC. She has been in the tax and accounting technology industry for over 20 years, consulting firms on implementation and business model transformation.