How to move your accounting to the cloud

Rene Millman

5 Apr, 2018

If you have always done your accounts with a traditional accounting package, it’s perhaps time you started thinking about moving them to the cloud.

Many organisations turned to cloud applications to either help reduce costs or improve operational speeds, yet those same organisations have now started moving their accounts to the cloud too. While there’s some trepidation about moving highly sensitive financial information off premises, the drivers to do so are becoming harder to ignore.

One such driver is the Making Tax Digital initiative from HMRC. From April 2019, all companies over the VAT threshold of £85,000 will be required to keep digital records and submit these electronically. There are also some suggestions that income tax could become mandatory as well, meaning businesses will have to review all aspects of how they engage with clients today and what that might look like in future.

There’s increasing pressure on accountants to do more than has traditionally been expected of them. According to a recent survey of accountants, 83% said clients expect them to do more than they did five years ago, with 42% expecting their accountants to offer business advice as part of the service.

“With this in mind, accountants are looking to lighten their administrative burden which will enable them to spend more time attending to these new demands,” says Sean Evers, accountant development director at Sage. “Moving accounting to the cloud allows organisations to spend less time on admin and more on attracting and serving customers.”

Benefits of cloud accounting

One of the main benefits of moving accounts to the cloud is quicker access to better software.

“Software is constantly evolving and improving, from bug fixes, patches to new features,” says Kris Brown, UK R&D Director at TechnologyOne. “When you enhance the software for one customer, all customers benefit. Not only is it much quicker to deploy cloud solutions, you also gain full control over the deployment process for new software. “

If you only wish to implement certain parts of the solutions, you can test those and then leave the other features ‘switched off’.”

Paul McCooey, a partner at chartered accountants Duncan & Toplis, says that recording long lists of payments is a thing of the past, as your bank account automatically syncs with your software.

“[There are] no more manually listing invoices [either]. The software can issue them automatically. And no more lost receipts or unclaimed tax relief – simply take a photograph of your bills or receipts and upload them,” he says.

“You’ll spend less time chasing debts too – cloud accounting software can issue automated reminders and ‘pay now’ buttons as payment prompts.”

Defining the future state

Paul Nicklin, technical director at inniAccounts, says that moving to the cloud isn’t as simple as flicking a switch so you need to do your homework.

“The world is going cloud first, so you’ll have an easier time if everything is in the cloud. However, you still need to consider how systems interact.

“For instance, if you have an ERP system and payroll plugged into on-premise accounting package it will be more tricky, but far from impossible, to move than if you have cloud-based services that are compatible with your old and new provider,” says Nicklin.

Brown says that the first phase in moving an organisation’s accounts to the cloud is to have a clear view of what success will look like – the future state – and to clearly define the current state.

“Every organisation is unique and will develop its own unique path to transition based on its existing applications, systems and requirements,” he says.

“It can be as simple as taking a copy of what you have on premise and starting the next day in the cloud. A like for like move of business process and software doesn’t have to be a massive task. But, a ‘lift and shift’ approach – placing current applications into a hosted environment – won’t deliver true transformation.”

Brown adds that if you are moving to a new provider, then this does need to be considered as a new implementation, and at that point, a change of processes and culture will be required to realise the full benefits of SaaS.

Nicklin believes that if your business is small, and your existing accounts aren’t as streamlined as they could be, then moving to cloud is the perfect opportunity to clean things up.

“In our experience of moving accounts from complex spreadsheets through to exports from accounts packages, we’ve encountered quality issues,” says Nicklin. “Our advice, therefore, tends to be not to bring too much history. It’s often wrong.”

Integrating accounts with other cloud apps

By migrating other parts of the back office into the cloud, it ensures that the benefits seen by the accounting team are also seen across the board, argues to Sage’s Sean Evers.

“Back office functionalities can often be time and resource consuming but moving to the cloud will take away much of the heavy lifting associated with these processes, allowing organisations to focus on serving their customers and improving workforce efficiency.”

He believes that once accounting is moved to the cloud, organisations should regularly review processes and challenge their efficiency. This is particularly useful for identifying those processes that can be automated or streamlined by using a third-party app, provided it’s able to connect to your cloud accounting service.

“That way, not only are you saving time and money around the accounting aspect, but all over your business. It also means more time to do what you want to do – whether that’s growing your business or more personal time,” says Evers.

David Lindores, technical director at Eureka Solutions, says that it is not a requirement to have other parts of the business in the cloud, however, this is highly advisable.

“There are integration tools that are available which allow businesses to transfer data seamlessly between cloud-based software solutions and on-premise software,” he says.

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