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Financing in the Cloud: A "Revolution" in Tax Preparation?

Cloud computing in finance and accounting 

Cloud-computing in finance and accounting: Though previous innovations may have made your office run more efficiently, the Cloud positively revolutionizes the way you do business, leaving everything that came before it in the dust.

The word “revolution” gets thrown around a lot these days.

Everywhere you look there’s some new product, promising to change your life or the way you do business.  It comes as little wonder, then, that so many are unfazed when industry experts go into ecstasies over the latest trend, exclaiming that “nothing will ever be the same.”  And so on.  And so forth.  Etc., etc.  At some point you have to stop and ask yourself:

“Is this newfangled gadget or doohickey really going to do all that it says it will? Or is it just going to end up collecting cobwebs in the garage, like so many other products we’ve bought over the years? Might this not be just another throwaway destined to be tossed into the dustbin of History?”

It’s happened to us all before.  Each and every one of us has gotten burned at some time or another.  Some innovation comes along and it’s heralded as the next big thing.  Once it finally comes out, however, it turns out to be a huge bust.  Remember Windows Vista? Or if you’re a little older, maybe the dreaded Microsoft Bob, #49 on Time’s list of the “50 Worst Inventions of All Time”? What a piece of junk that was.  Thankfully, most of us are too young to have any recollection of Smell-O-Vision, first unveiled in 1960 — a product so godawful that it somehow managed to be worse than its name led people to expect.

Stepping back from all these spectacular tech flops and bunk prognostications, however — speaking of which, it’s 2012…wasn’t the world supposed to end? — you have to admit that there have been certain tools and devices that have really changed the way our world operates.  In fact, we’ve become so reliant on them that we barely even notice their existence anymore.  The world before the internet seems a hazy, distant memory.  And can you even imagine anymore what life would be like without cell phones?

Well, recently, Accounting Today (together with Bill.com)assembled an all-star team of panelists to sit down and discuss calmly just how revolutionary the Cloud may actually be.  Moderated by Erik Asgeirsson, CEO of CPA2biz, the list of discussants features a peerless lineup: Becky Brown, founder of Keeping Your Balance Bookkeeping & Tax Prep; Michael Hsu, founder and CEO of DeepSky; René Lacerte, CEO and founder of Bill.com; and Douglas Sleeter, president of The Sleeter Group.

After a brief introduction, they pose the foundational question: “Should accountants be leading the pack?” Indeed, for many tax preparers and accountants who are vacillating or thinking twice about going out on a limb and diving headfirst into a new technology, this is the question of the hour.  Many are unsure of how they should proceed.  Luckily, already in the opening exchange between Asgeirsson and Lacerte, this issue is addressed front-and-center:

Erik Asgeirsson: There have been a number of questions when it comes to how one should navigate this coming sea-change.  It feels different today.  Over the last decade, there’ve been a lot of technological changes.  When you look at what’s going on now, is this different [from that]? With the Cloud, some people say it’s a passing fad.  What’s your take on the changes occurring in the marketplace?

René Lacerte: It’s a huge paradigm-shift, a game-changer.  The Cloud really represents the democratization of information, services, and tools.  Time was that if you were a small CPA firm in Iowa or wherever, you’d have to wait until you were much bigger to be able to have access to some of these services and tools.  Having the ability to create these tools and this information enables the profession to move forward.  It empowers you as an advisor to your clients.  It’s a game changer, when you think about the historical impact over time.”

To further elucidate the many ways the Cloud revolutionizes accounting, they break down their analysis into a series of five separate topics.  Enumerated, these include:

  1. Standardizing client services: Focusing on the potential for creating uniform firm processes and approaches.

  2. Improving security: Focusing on the security benefits that come with adopting the cloud.

  3. Opportunities with verticals: Focusing on how the cloud enables verticalization and vertical-focused strategies.

  4. Anywhere/anytime access: Focusing on the benefits of mobility and constant access.

  5. Firm profitability: Focusing on firm profitability.

The videos really are exceptional; I hope it won’t seem like too much of a plug if I recommend that readers watch all of them.  Trust me, it’ll definitely be worth your while.

Conducting finance operations in the Cloud is sleek, streamlined, and easy.  You can share or transfer files instantaneously without having to print off endless copies.  And the best part is — you don’t have to be a giant within the industry to use it! It’s so affordable, it can reduce costs for companies of practically any size.

Reviewing all this information, here’s one way to think about it:

Let’s say that back in the halcyon days of the 1990s, you bought a beeper, pager, or even one of those electronic organizers.  When cell phone technology advanced far enough that almost anyone could afford them, as happened in the early-to-mid-2000s, they basically rendered all these older forms of technology obsolete.  Cell phones play the role of beeper, pager, and electronic organizer all wrapped into one.  (Soon, they’ll almost double as laptops or tablets).  You wonder to yourself: Why’d I buy all this stuff in the first place? I should have just waited for this to come along.

They say hindsight’s 20-20.  But think about it: Does it therefore follow from these considerations that the old beeper, pager, or electronic organizer you bought back in the 1990s did nothing to change the way you interacted with the world? Of course it doesn’t! These things were cutting-edge in their day, and opened up all sorts of new opportunities at the time.  Maybe they’ll never be remembered as having been so totally revolutionary as cell phones or modern smartphone technologies, but let’s give them their due.  They were a big improvement.

The same basic logic holds when it comes to making the switch from desktop E-Filing systems to the Cloud.  Desktop computing was a huge advance over what came before.  The takeaway should be that the Cloud will likely be even more of a “game-changer” than that.

Topics: Industry, Tax Updates, ERO, financing, accounting, tax preparer, cloud


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