Finance & Accounting

Future of Cloud Accounting & Financial Services- A Complete Overview

As automated and intelligent technologies are disrupting our lives rapidly, they are reinventing the accounting and financial services ecosystem. With the present pace, cloud accounting is undisputedly becoming the new normal. The benefit of modern accounting cannot be undermined as it can make a real difference to the financial ecosystem. It has grown exponentially in the last few years. However, what will be its future like? This is an important query. This article will discuss the future of cloud accounting and financial services.

What do you mean by Cloud Accounting?

Cloud accounting^[1] means the ability to store, access, and edit accounting data in the cloud through the internet. This eliminates the need to store such data on the hard drive or in other storage devices.

Cloud accounting updates financial information automatically, thus allowing real-time reporting. It can be accessed anywhere and on any device, having an internet connection.

Cloud accounting is also called online accounting or remote accounting. The data can be securely stored through this means. You will be able to access your financial data easily through this means. Earlier manual processes were in place, but now it has rapidly evolved through automation.

Benefits of Cloud Accounting

Cloud technology has many benefits, especially when you consider managing accounts from the perspective of business expenses.

Some of the crucial benefits have been discussed below-

• Time-saving

With cloud accounting, manual and repeatable tasks are automated, which saves a lot of time. The latest accounting techniques permit the transmission of financial data easily. As they are free of human intervention, chances of error are also reduced. Accountants can easily analyze financial data and gain valuable insights, which otherwise would take a lot of time and effort.

• Flexibility

Cloud accounting allows persons to access their data anytime and from anywhere. This permits real-time analysis and helps in making informed decisions whenever it is required to be made.

• Data security

One may be reluctant to store sensitive information in the cloud. This is because the breach of data can be catastrophic in financial terms and it would also lead to lawsuits etc.

However, many need to learn that cloud accounting increases security for most businesses. Cloud providers ensure multiple security levels that only authorized persons can access your data. The data is also backed up automatically.

• Automation

With the physical process, getting an accurate and updated view of the business can take time and effort. Moreover, it can cause errors or issues that may go unnoticed. Cloud accounting eliminates this issue by providing a real-time view of the business through the automated process. It also improves efficiency by automation, and various tasks can be efficiently performed. Automation saves time and enhances productivity, which can be an added advantage in the future.

• Centralize Tasks

With cloud-based accounting, it can serve as the one-stop provider for all your accounting requirements. The automated process allows helping you to centralize and consolidate the accounting processes on a single, comprehensive platform. Thus, you can concentrate your tasks with cloud-based accounting.

• Maintain relationships

It is necessary to have a good relationship with vendors, distributors, etc. With the help of cloud accounting, you can locate invoices and bills quickly. Also, you can identify in case any payments were missed. This form technique allows business owners to collaborate with accountants to ensure that the financial information is up to date. This will ensure that the filing of tax-related compliance is completed seamlessly and efficiently.

• Accuracy and back-up

Human error in accounting can cause losses at times. However, with the help of cloud accounting, such errors are mitigated, and the accuracy is improved drastically. Issues such as repetitions, duplication, and incorrect data entries can be identified easily and are resolved instantly.

Further, the data processed is backed up to an external server. In case of any security attack, the data can be recovered since it is backed up.

What will be the future of cloud accounting and financial services?

Earlier, the accountants used to charge as per their working hours. However, this trend has begun to change. Today, many bookkeepers and accountants have fixed their prices of services and are basing their charges on the value they offer.

With the current trend leading towards outsourcing accounting tasks, the present system permits enough margins despite the low costs of delivering the services.

Accountants still charge standard rates, although it may change. Clients today prefer convenience, and various accounting firms provide service packages that include accounting, advisory, and compliance under the exact charges.

Staying Competitive

Earlier, the accounting companies, sole trader bookkeepers, and accountants relied on local accountancy firms based on the nearness and recommendation from friends and families.

However, with the advancement of technology and the wide reach of the internet, everyone has a chance to compete.

The competitive landscape has forced people to come up with innovative ideas for staying competitive and relevant. As new technologies have emerged, many niche income opportunities have also developed.

In order to stand out in the competitive business world, one must specialize in a niche service.

Blockchain and accountancy

Blockchain technology has become popular with digital currency, bitcoin, etc. Blockchain is a technique that records data through cryptos. Blockchain can enhance accountancy practices. However, it will happen with the creation of a new accounting model that can be updated and edited without the issue of it being corrupted.

The modernization of blockchain technology will grab the eyeballs of financial professionals in the future. It will push the future of cloud accounting to the next level.

Replacement of humans

Rapid technological strides pose the question of whether technology will replace humans altogether. Despite the level of automation and cloud accounting concepts, experts believe that professionals in the accounting industry will not be replaced. They believe that the advancement of technology cannot address the complex issues faced by accountants’ clients.

Decoding the Future of Cloud Accounting through Present Trends

More businesses in the future are expected to adopt cloud accounting to keep track of their vital financial records and perform transactions. However, there are many who are uncomfortable with storing data in the cloud. Thus, it leads us to whether the shift to cloud accounting will be sluggish or will be quick.

As per the current trend, cloud accounting is here to stay. Many small businesses have already adopted cloud technology for at least some part of their functioning. With the rise in the internet and accessibility to technology, more companies are expected to adopt cloud technology.

The future of cloud accounting is very bright. This is because, today, business owners are allowed to work from their physical office location. With the increasing connectivity, they can afford to work from anywhere worldwide. Location is no more a barrier to them.

Also, businessmen and women who can access and update their data and information from anywhere enjoy a clear advantage over their competitors. Further, many people are already doing their banking online, and it seems obvious to have cloud accounting that can use real-time details from the financial accounts and input the data into the accounting documents.

It will ensure increased accuracy in bookkeeping, and the business executives can also focus on other essential aspects of the business.

Future of Cloud Accounting and the Security Concerns

Going forward, cloud accounting must be made more secure than ever. This is because accountants and financial professionals are very cautious in security matters. They must be careful and competent in data and information security. Thus, companies dealing in cloud services should ensure a higher degree of protection to attract more people to it and keep it relevant in the future.

The more security, the more businesses will be attracted to it. The concept of cloud accounting belongs to those businesses that want to stay caught up in the competitive market.

Conclusion

The future of cloud accounting will innovate the delivery of financial services. Many businesses have already adopted it. This scenario may see a constant upward trend as companies don’t want to be at a disadvantage with competitors. With the flexibility, accuracy, etc., being offered by cloud accounting, businesses, whether big or small, would want to tap into this technological advancement.

Read Our Article: Upcoming Future of Financial Services: An Overview