IT Briefcase Exclucive Interview: Cloud Computing in Accounting and Financial FirmsOctober 25, 2017 No Comments
As businesses continue to transition systems and processes to the cloud, accounting and financial firms are adjusting as well and striving to provide more innovative, technological solutions. The ability to integrate disparate applications and provide clients with a more holistic view of their organization in a seamless user experience is integral to financial service providers and it is important to make clients aware of the opportunities and risks present. Sharon Berman, a principal for Rehmann, a fully integrated financial services firm, spoke with ITBriefcase on the tech movement and cloud-based solutions being implemented by accounting and financial services firms.
- Q:What is your name, title and role at Rehmann?
A: My name is Sharon Berman, and I am a principal in the accounting, consulting and tax (ACT) department of Rehmann. I serve on Rehmann’s ACT executive committee and lead the firm’s SkyBooks team, our cloud accounting initiative.
- Q: How did accounting and financial firms first react to the introduction of the cloud and cloud computing?
A: At first, like most industries, many accounting and financial firms were skeptical about implementing cloud solutions into their business due to security concerns. Unfortunately, there is a common misconception the cloud makes you more vulnerable to being hacked, and when dealing with a business’s financial records, this misconception, coupled with our industry’s tendency to be slow to change, implementing cloud-based solutions becomes a difficult pitch.
- Q: How do you respond to these safety concerns?
A: We focus on all of the advances in cloud security, and the advantages of having corporate data backed up at a multitude of secure data centers. When it comes to securing data, controlling access is much more important than the actual location where the data is stored. There are ways to reduce exposure, such as multifactor authentication, password policies, limiting login attempts, etc. As data is migrated to the cloud there is less need for servers and IT support, which creates less vulnerability. Additionally, the increased accessibility to the data by authorized users is a significant advantage for maintaining business continuity. In extreme circumstances, like the recent hurricanes, there is a major advantage to have data backed up in various locations allowing organizations to maintain operations from any location as long as they have access to a computer and the internet.
- Q: Can you go over the specific applications cloud computing allows?
A: Virtually all organizations utilize the cloud in some way. Cloud accounting software can be used for a wide range of accounting needs: accounts receivable, accounts payable, payroll, account reconciliations, financial reporting, etc.
As cloud accounting continues to evolve, features and options continue to be enhanced. Some key features of the cloud include:
- Access to financial information no matter where someone is geographically;
- Ability to customize the look of financial management systems;
- Automated tactical vendor management workflows across the entire accounts payable process to increase purchasing speed, accuracy and efficiency;
- Ability to configure workflows, screens and preferences, all without costly coding or scripting;
- Ability to store and share documents online with unlimited document management.
Implementing cloud solutions on the financial management side allows us to select the “best in breed” for each financial management solution, which means integrating other applications to the general ledger. This seamless integration improves efficiency and accuracy of financial information to other applications. Commonly integrated applications include payroll, point of sale system and CRM.
- Q: What other advantages do you see with cloud computing?
A: Cloud computing creates a better working relationship between businesses and their accounting firms, and provides real-time insight into business transactions allowing advisors to provide proactive, year-round strategic support and business planning. Accounting firms in the past have worked under a snail-mail process with the business and the firm having to go back and forth waiting for updates on projects. The cloud allows for changes to be made in real-time and makes it easy for the client and the firm to work cooperatively on tasks.
To expand on the advantages of being able to edit and add in changes in real-time, a huge benefit is being able to deal with changes in accounting and tax policy as it happens. Instead of waiting for a 12/31 date to see how a new accounting standard or tax law is going to change your finances, you are able to proactively use the system to see the implications of a policy change on your business right away.
- Q: How much does implementing cloud computing cost?
A: Another common misconception people have is that moving to the cloud will create expensive infrastructure update costs. In reality, switching to the cloud actually eliminates the need for expensive servers and extensive IT support, and new releases of cloud software solutions are automatically rolled out to users rather than causing organizations to shut down to update and implement.
- Q: How much can a company actually save by using cloud computing?
A: The return on investment (ROI) will obviously vary based on each company’s unique circumstances. We see a lot of the ROI come from saved time or repositioned jobs due to the processing efficiencies that can be achieved by automating processes and eliminating manual processes. Tasks routinely handled by someone in-house are now being done digitally through the utilization of these services. Additionally, as I mentioned above, data being migrated to the cloud allows companies to save money on servers and IT support.
- Q: How will cloud computing be seen in accounting and financial firms in the next five or 10 years?
A: Given the demands of business and the emergence of cloud technologies, outsourced accounting services will continue to be a growth area for firms. We are seeing more clients relying on outsourcing to just ‘handle it’, asking their accounting firms to be the full-service team capable of managing all their IT, financial, payroll and benefits needs. To efficiently and effectively offer this type of full service management, cloud computing will become the norm, and all needs will be handled digitally and through the cloud.
Technology is not slowing down. We will continue to see cloud-based solutions and, soon, solutions for the next technological advancement. As these solutions are transitioned to provide efficiency in our accounting practices, capability and security will remain at the forefront of the conversation. Businesses will look to outsource companies with a one-stop firm to provide support services for all of their business needs. It is the firm’s responsibility to have this technological capability and market its security and efficiency.
Sharon Berman is a principal in the accounting, consulting and tax (ACT) department of Rehmann and is based in the Farmington Hills office.
Sharon has over 20 years of experience in public accounting, at local and national firms, as well as experience in private industry. She is a member of the Rehmann’s ACT executive committee, principal-in-charge of the southeast region ACT department and also leads the SkyBooks team, which is the Firm’s cloud accounting initiative. In addition to providing accounting, audit and review services, Sharon focuses on providing business solutions primarily to privately-held businesses. Sharon participates in the Firm’s quality control program by participating on internal inspection teams, providing technical reviews, technical research, and assisting with timely resolution of accounting issues.
CLOUD COMPUTING, Fresh Ink