Accounting Firms Plan to Join the Cloud Technology Revolution - Finance Silos

Accounting Firms Plan to Join the Cloud Technology Revolution

The increasing popularity and benefits of cloud-based automation technology has reached the accounting world as well, according to a study conducted by CaseWare International. The leading software provider surveyed 3,095 accounting professionals globally about current industry challenges and future trends.

The 2022 State of Accounting Firms Trends Report highlights these findings. The most overwhelming trend and the basis of the survey is that more than 65% of accounting firms plan to adopt cloud technologies in the next 2 years, with one-third taking more immediate action within the next 12 months.

Why cloud technology?

Overall, implementing cloud technology is a response to two recent trends in the workforce: Faster and larger quantities of data, and the remote work environment created by the pandemic.

In fact, the 2 greatest benefits that respondents hoped to receive from using cloud technologies are “easier collaboration and remote working” and “reducing errors through standardization of processes and tasks”. These directly correlate to the challenges of processing large amounts of data and staying connected in remote work environments.

“We are driven by the needs of the industry and what we hear from this report is that remote work has accelerated the move to the cloud and those who are embracing new technologies have the competitive edge,” said Dave Osborne, CEO of CaseWare. “This is a clear indication that firms of all sizes need tools that go beyond securely sharing files, and the cloud is where the adventurous forward thinkers are headed to equip themselves for effective collaborative work.”

But the benefits of cloud technology don’t end with the recent trends of the past few years. Cloud technology can improve age-old business challenges such as client relationships and employee efficiency.

Although 77% indicated that they were using some sort of client collaboration software solution to communicate and share files with their clients, 57% percent felt their overall client engagement process was not as efficient as they liked. By implementing cloud solutions, almost half of the accounting professionals hope to improve client relationships, a very important aspect for a service such as accounting.

In addition, 40.5% of respondents hope to benefit from saving time and costs when implementing cloud-based solutions. Efficiency has long been one of the most important goals in the business world as saving time and cutting costs equals greater profit. Technology can improve efficiency, and businesses in all areas are seeing the benefits.

“An increasing number of firms recognize that cloud technology can be more efficient by enabling instantaneous, interactive reviews of continuously-updated engagement files,” said Scott Epstein, Chief Product Officer of CaseWare. “This can help by “keeping track of deliverables so managers can quickly reallocate tasks among staff to ensure workloads are equally distributed, and answering team member questions in real time, even at different locations.”

Additional Ramifications

Although the main point of the survey is to highlight the benefits and trends of cloud based solutions in the accounting sector, the accounting field is only a small portion of a large scale movement towards cloud-based automated services across the board. These trends in the accounting sector are very similar to the switch to cloud based automation solutions that we are seeing among finance teams in all types of industries. Much of the same results were echoed in a Deloitte global survey about the challenges and opportunities that FP&A software solutions provide, especially in regards to the effect of Covid-19 on finance teams.

In terms of efficiency, adopting these solutions isn’t the end goal for C-suite executives and team leaders. As the report shows, accounting practice leaders want to see into their firms’ operations in order to be more equipped to fine tune their workflows for better outcomes. 55% said they “would like to have more visibility into their staff members’ workloads,” in order to improve meeting deadlines and grasp which engagements employees are spending the most time on. If deadlines are overlapping or work can be reallocated, then the overall efficiency of the firm can increase dramatically.

Challenges Ahead

But cloud technologies can’t completely eliminate all of the current challenges. Due to the nature of the accounting industry (although this applies to finance teams of all companies) the biggest challenge named in 47% of the answers was new tax laws and regulations brought on by the pandemic.

The next biggest concern (42.5%) was using new technologies, and many attribute this to the pandemic as well, due to the rushed changes that many businesses had to adopt overnight. “Lack of direct interfacing with clients” and “adjusting to remote work” were both named in well over a third of the surveys as well.

And of course one of the biggest issues of the business world could not escape being mentioned either- talent management. A full 94%(!) described finding and hiring the right talent as challenging, while 88% said retaining talent as difficult in some way.

Although cloud software can’t solve all of the difficulties of the business world, accounting experts who took part in the survey showed that they are using different types of automation technologies to attempt to bridge the gap of each challenge. Over 91% said they are using, or going to use software that automates processes, such as rolling forward client data from year to year, generating draft financial statements, or populating trial balances.

Lastly, experts are using many different types of analytics such as automated testing, AI, and ad hoc in order to keep up with the advanced technology and automation trends.

Conclusion

This report shows the overwhelming trend occurring throughout the accounting world, namely the fast pace move to join cloud based solutions. Although there are many additional challenges that still need to be dealt with, automation technologies can help eliminate these as well. In fact, we are seeing the continual adoption of analytics, automation, and other cloud based solutions in order to take on the challenges brought on by the pandemic.

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