Accounting and bookkeeping are functions that apply to every industry. They are critical to the smooth operation of business, from the smallest mom-and-pop endeavor to the largest multinational corporation.
Traditional accounting has involved hours of data entry and quadruple-checking numbers. Despite these best efforts, “Human error is one of the greatest challenges of traditional methods for bookkeeping,” says the website Scale Factor. Perhaps the next greatest challenge would be the sheer time needed to do all of this manual labor.
But today, the field of accounting is undergoing a revolution that will change or even eliminate these constraints. Instead of using spreadsheets or programs that reside in the accountant’s computer, many companies are moving to cloud-based accounting solutions that vastly reduce the amount of time needed to perform basic functions.
Not only do these programs shorten accounting processes, they also increase its accuracy and even automate some things that once had to be done by hand. These time savings add up, freeing accountants to focus on higher-level functions and increasing the importance of this role.
Learning how to take advantage of cloud-based accounting methods is best done in academic programs, such as University of North Dakota’s Master of Accountancy online. This education can prepare graduates to function in today’s increasingly computer-enabled world and help them to understand cloud computing’s impact on accounting.
Benefits of Cloud Accounting
Before discussing exactly how cloud accounting changes the accountant’s role, we should understand the many benefits of this new methodology. On the website Firm of the Future, CPA Barry MacQuarrie lists six good reasons to consider migrating your accounting functions to the cloud:
- Anytime, anywhere access – In traditional desktop accounting, you can only access your information when you are using the accounting program’s home device. With cloud solutions, you can access your accounting software and your data from a browser or mobile device – wherever you happen to be.
- Better security – This idea may seem counterintuitive since security for cloud solutions is out of the user’s hands. But most companies that offer cloud accounting software are highly security conscious and are probably doing more to protect your data than you would on your own.
- No installations or updates required – This is a big one. You just subscribe to the software, and the cloud accounting vendor does the rest. It will maintain the software and install updates as needed, with zero effort required from users.
- Automatic backups – How many times have you forgotten to back up your data? This worry is off your plate with cloud solutions, since the vendor assumes responsibility for system backups. Not only are backups done promptly, but your data is often stored in multiple data centers – so one disaster will not wipe out your information.
- No startup costs or long-term commitments – With cloud accounting applications, all you do is sign up for a subscription. There is no startup or maintenance cost in servers or software. And if you don’t like the service, you can just quit it and try something different, with no financial penalties.
- Platform agnostic – It doesn’t matter whether you use Windows, Macintosh, Chrome, Internet Explorer or Firefox. Your cloud accounting application will work on any of them.
Risks of Cloud Accounting
Along with its many benefits, cloud accounting carries a few risks. Firm of the Future identifies three worries with internet-based accounting:
- Disappearing vendors – If you do not choose your hosting company well, you could end up with a host that goes out of business overnight. You should always have a contingency plan in case of this type of disaster.
- No internet – Cloud applications require internet access. If your internet goes down, or if you find yourself in a place without a connection, you’re out of luck.
- Security breach – Although increased security is a benefit of cloud solutions, it is equally a liability. When your software and your data both live online, there is a chance that someone could access your information.
Changing Role of Accountants
So, what does all this mean for accountants? Basically, cloud accounting and the automation of data entry such as debit, credit and client information is lifting a huge time burden off accountants’ shoulders.
“Automated processes…will allow one to enter the transaction in only one field. The software will then perform the duty of processing the information and relating it to all other pertinent records in the system. It performs these roles with minimal error. It generates an appropriately structured report, posting with the correct date and time stamps that contain all relevant entries and related data,” explains Scale Factor.
The question, then, becomes what to do with all this extra time. It turns out that there is no extra time because clients have an endless need for accounting expertise that goes beyond the traditional data-juggling functions.
Accountants today find themselves acting as consultants in various financial areas. Some are offering services such as portfolio management and business consultation. CPA firms are also spending more time on staff recruitment, which is an ongoing and major challenge for the industry.
Accountants seem to understand this shift. In a survey, the organization Nerds Support found that 83% of accountants now feel that understanding technology is just as important as understanding accountancy. They see the way the industry is changing – and they are rising to the challenge. Other accountants should consider doing the same.
University of North Dakota’s Master’s in Accountancy Online Degree
University of North Dakota’s Master of Accountancy (M.Acc.) online program helps students master accounting principles and general accounting terminology, as well as related skills necessary to reap the career benefits of accounting at the highest levels.
UND is accredited by the Association to Advance Collegiate Schools of Business International, which only recognizes about 30% of business programs in the United States. The master’s in accountancy online program offers practitioner and fundamentals tracks. Coursework is done online, which allows busy professionals to study accountancy and earn their degree without disrupting their work or personal lives. For more information, contact UND today.
Human error in accounting – Scale Factor
Benefits of cloud accounting – Firm of the Future
Risks of cloud accounting – Firm of the Future
Automated processes – Scale Factor
Changing role of accountants – Nerds Support