The Future of Accounting

As part of our Accounting 2.0 series here on CloudAve, we reached out to some accounting software visionaries to give us their take on the future of accounting/business software and how the eco system would look five or ten years out.

Mark Davies is managing director of e-conomic (CloudAve review here) and he agreed to take part in this series. If you’re an accounting or business software visionary and wish to take part – please contact us to discuss.

For more in this series check out this link.

The essence of what most industries strive for has always been the same: how can we achieve more for less; how can we improve productivity; how can we be more efficient and effective?

The accounting sector has shared this ambition. Gone are the Dickensian days with rows of bookkeepers recording figures in giant ledgers. Now we see accountants plugging away on their PCs, PDAs and mobile phones. Today, accountants are less interested in routine bookkeeping and acutely aware of the need to not only fulfil a client’s statutory reporting needs, but also to help them build a stronger business by finding new and better ways of doing things.

Online accounting/SaaS accounting/accounting 2.0 (call it what you will) is revolutionising the way in which we work. The internet is a great enabler of low cost solutions that are simple to implement with no need for expensive consultancy or training. It’s the perfect platform for facilitating co-operation between people or groups of people. Via the web, every part of the accounting process can be carried out by the most appropriate person or resource, no matter where they are in the world, driving greater efficiencies. For example, the services of an external service provider, such as a credit management specialist, can be easily integrated into a company’s finance function with everyone working on the same platform from wherever they are sitting. Another example is the outsourcing of basic data entry work to a bookkeeping specialist, allowing the accountant to concentrate on higher value tasks and the company to stay focused on its customers. Online accounting enables this to take place at low cost and we will see new, innovative service offerings based on this more flexible way of doing business.

While labour intensive number crunching is one area that accountants are increasingly likely to outsource, the requirement for data entry will diminish over time. Transactions and data exchange will become standardised and automated to a level beyond what we can now imagine. The time may come when accountants never need to touch a keyboard because automated processes will deliver financial analyses and decision-driving reports at the click of a button. 90% of accountants’ time will be focused on high value tasks like management reporting and providing financial advice that enables businesses to generate greater profitability.

Communities are a big thing on the internet and they’ve changed the way people socialise and work. We’re already seeing a developing ‘e-conomic community’ where accountants and clients talk to each other, ask advice, share information and ideas, and collectively contribute to our development roadmap. Other accounting communities will grow in blogs and forums. One result of these collaborative communities will be a demand for greater integration between the systems that they use every day. As Rod Drury explained in his Guest Post, this will be a good thing for small businesses. Online accounting will evolve into a broader business management platform that brings key information together and delivers it in useful ways with a minimum of effort from users.

I mentioned mobiles and PDAs at the beginning of this post. Mobile computing is iconic of this generation and there are many theories on the benefits it will bring in the future. As far as accounting is concerned, we are already logging onto our accounts wirelessly from any location, but although online solutions can be accessed relatively easily via a mobile phone, I don’t envisage a much benefit from deploying full accounting functionality on a tiny mobile screen. Where handheld devices come into their own is with their ability to quickly accomplish smaller tasks on the fly, such as calling up a customer’s invoice and order records before a meeting, checking for stock availability or recording your time/mileage/expenses. That kind of thing will soon be as commonplace as reading new e-mails or text messages.

Finally, after many years of lobbying the environmental movement is on a roll. Over the last few years the way we live and our attitude towards the environment have radically altered. Although it’s a trend still in its infancy and its full impact on society and industry is yet to be seen, sharing resources is going to be a big factor, which means online business solutions delivered using a multi-tenant model will have a big role to play. Not only does a centralised, shared platform consume far less energy than millions of users each running their own software, there’s no distribution cost, no packaging to dispose of and a significant reduction in the need for physical travel thanks to shared access to data. That’s not to say that face-to-face contact is going to go away completely, we’re all humans after all! But there will be less need for accountants to travel to clients’ offices and the amount of paperwork shuttling back and forth will be almost completely eliminated.

Businesses may be reeling from the effects of the recession and may tread cautiously with regards to change. But they are certainly in the market for systems that have a light touch on their resources – ranging from finances and capital, through utilities and energy consumption, to their overall environmental footprint – and solutions which improve collaboration and bring greater efficiencies. Online accounting delivers on all fronts!