Impact of Cloud Computing on Accounting Industry in 2023

The accounting industry has evolved continuously over the past decades, making each innovation and addition even better. There has been consistent development and modification from traditional to technological options, which have made accounting easier for owners and professionals.  Cloud technology, the latest trend in accounting, is expected to make accounting applications easily accessible, time-saving, and less expensive. Cloud accounting refers to using accounting software and data hosted on someone else’s server and made available over an internet connection from anywhere on any device.

Accountants in the Cloud

Accountants should take the cloud as a significant opportunity to step up. They can leverage the cloud to empower a new segment of business insight to understand that they can change their business performance. However, this transition isn’t easy, as it would also involve a change in culture and attitude.

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Accountants can’t just adopt cloud technology but would also have to incorporate the change in the work methods that come with it. Cloud significantly changes administrative processes and human dependency, allowing them to utilize their skills and expertise to innovate new levels of services.  Moreover, according to the Microsoft survey, some of the primary benefits of deploying cloud computing in the organization were cost-efficiency and improved productivity.  

Source: Microsoft

Real-time analysis

The real-time updates over cloud computing to all involved parties mean accountants don’t have to get mixed up in the redundant data files anymore. Cloud technology makes it easier to gather and work on financial data.   Cloud provides a common real-time platform to store and access all critical data. Since the data is not required to be shared as an attachment over emails, more time can be devoted to the core tasks, especially during the tax season.  When users can access and edit the same files on the cloud, they will be able to do more and better. Decision-makers also have access to the most recent data and can easily track the workflow, which makes the decision-making faster and, eventually, streamlines accounting practices for the better.

Seamless Document Management

Accounting relies heavily on the documents, such as – invoices, purchase orders, account statements, etc. Rising dependency on internet-based transactions has helped the electronic format of these documents to replace the printed versions. Cloud ensures that the accounting department can easily collect these e-format documents and have them available whenever and wherever required.  Integrating different applications, like banking apps, with accounting software can further help with this process of maintaining the documents, as integrated applications can automatically share various transaction information.

Scalable File Storage

Accounting files are among the heavier ones, and as the business grows, it demands more storage space. With the local data centers, accounting firms will have to regularly upgrade hardware to accommodate the growing demands, which is an expensive solution.  On the cloud, accounting firms can choose to expand the storage space on demand at a much lower cost. There is no need to buy expensive computer equipment and IT professionals to maintain them. Cloud also automatically backs up the data stored at the isolated data centers, meaning that data is always safe.

Enhance Accountant-Client Relationship

Cloud computing offers an opportunity to change and enhance the accountant-client relationship. With permission-based sharing, the accounting files can be shared with the clients easily. It provides transparency regarding the status of the work.  Remote accessibility adds value to the client servicing of the accountants because they are available to assist the clients on the go. Also, accountants can conveniently gather the necessary documents from their clients for tax filing and other financial tasks. It further speeds up the process and helps to serve clients better.  Since the cloud reduces the cost of operations, accountants can offer some discounts or provide additional services at the same price to attract clients.

Is cloud computing making accountants redundant?

It is inevitable that the value of accountants – especially for SMB clients – will be questioned as people ask, “is there an app for that?”  Business owners will always need professional accounting advice, especially when it comes to taxes. And there is no app for that.  Cloud computing allows accountants to spend less time on administrative tasks such as data entry, and chasing up documents and spend more time on valuable revenue generation activities. It means that accountants can do what they are trained to do – explain, work with numbers, and let them precisely focus on the growth of the business.

Cloud Computing Security for Accountants

Adopting new technology is seen as a significant challenge in the accounting industry. Cloud computing security concerns are the biggest reason for hesitance in working with cloud technologies. Cloud computing security is an umbrella term all accountants should be closely familiar with.   The cloud service provider employs a set of policies, protocols, and applications to protect your virtual environment from external and internal threats. Cloud computing security incorporates threat prevention, detection, and correction. A multi-layered cloud security posture is an essential part of moving to the cloud.   The following are the significant focus areas for accountants aiming to enhance their cloud security:

1. Access control measures

Access and identity management is a crucial part of cloud security. Robust access control policies determine which users have access to sensitive information, the privilege to alter or download the files, or view-only access.

2. Protection from external threats

External cybersecurity threats come in multiple forms. Email-based social engineering attacks are one of the most common threat vectors in the current security landscape. External threats can also be malware, Ransomware, or DDoS attacks. A multi-layered cloud security posture that detects new-age threats is a critical addition to cloud computing for accountants. A firewall as a service is a powerful solution for protection from external threats.

3. Event analysis and monitoring

Real-time monitoring and round-the-clock protection are central features of managed cloud security. Security tools like SIEM provide in-depth visibility into what’s happening in your cloud environment. Actionable threat intelligence, comprehensive reporting, and instant alerts strengthen cloud security against advanced attacks.

4. Cybersecurity awareness for accountants

Anybody working remotely or in the cloud with sensitive client information requires thorough cloud security awareness. Knowing how users can be targeted and the best practices in case of attacks is a critical part of any threat response strategy. All staff needs cybersecurity training in topics like:

• Strong password policy
• Phishing detection
• Secure internet connections
• Dangers of unauthorized software

What’s next?

We are just starting to see the impact of cloud computing in the accounting industry. It will take time to determine if the technology would be a key paradigm shift for accountants. Shifting to the cloud becomes way less daunting if you have the right partner. Ace Cloud Hosting has been enabling accountants and counting firms’ secure and successful move to the cloud for 14+ years. Want a seamless, hassle-free introduction to cloud computing?