The Link between Moving to the Cloud and Tax Practices’ Growth
The irony incumbent in technological advancement is that it presents many opportunities for accounting, while at the same time failure to embrace it puts both businesses and clients at risk.
In their heyday, Lotus 123 and Atari were the industry’s premium brands without peers or competitors who could dethrone them. Today, the software packages are almost obsolete as technology and consumer expectations have moved on. We are in an era where customers assume good systems are user-friendly, shareable, and accessible on various devices any time and anywhere.
As with technology, changes in customer expectations transcend industry, making tax and accounting practices susceptible to pressures to meet clients’ needs adequately. Clients want the same ease of service from practitioners as they experience with their favourite online applications and software brands. Accountants and auditors who cannot or will not adapt to evolving technology risk becoming irrelevant in what is an increasingly competitive market. A great majority of accountants are using some elements of cloud software in tax preparation. Nevertheless, only approximately a quarter uses a fully cloud-based solution. The time for adaptation is now or face being left behind.
Cloud-based solutions result in increased efficiency, productivity and profitability through the creation of a streamlined workflow. The greatest advantage being that information is stored offsite, giving tax practice teams access from authorised devices or browser, anytime and anywhere.
Accounting and audit practitioners are also able to give their clients access to view their own data and collaborate wherever they are, at any time that is convenient. Real-time execution is a standard in business today, whether it is fast food delivery, ordering a taxi or finalising tax returns. A single database environment shared between clients, tax, corporate secretarial, ledger, billing and invoicing is key. Facilitating the opportunity to collaborate with clients on real-time data based decisions gives tax practitioners a competitive edge over their peers in the market. This allows them to distinguish themselves and ultimately win new customers, as their advice is based on the correct information because data is current and accurate every time. Enhanced data sharing is crucial to ensure that software is compatible with major data sharing platforms such as Microsoft OneDrive and Google Dropbox.
A central data source has the advantage of cutting out manual data entry and avoids redundancies in entering information such as invoices and source material, which is labour intensive and costly. Apart from this obvious positive impact on the bottom line, less apparent cost savings can also be made using cloud-based software. There is no need to incur the expense of employing an IT team maintain the system, since cloud vendors handle server and software maintenance, and provide tech support. Additionally, system upgrades are taken up and data storage does not have to be an additional expense.
An oft-quoted concern about switching to the cloud is data security. Security breaches expose both practices and clients and could prove disastrous. The media has inundated consumers with horror-stories where breaches have done irrevocable damage to businesses. However, recent reports show that leaving a laptop unattended is, arguably, riskier than using the cloud. It is key to choose a reputable vendor, certified by the South African Revenue Service, and hosting partner with vast industry experience; that complies with the operational frameworks in place.