Adding intelligence to the bottom line
Moving to a cloud-based accounting solution delivers more than just simplicity: more and more businesses are finding that going online cuts dead weight and promotes innovation
The time comes to refresh all IT systems, but the demand for changes to business-critical services such as accounting are often met with fears: fear of disruption, fear of the new, and fear of the difficulties of migration. And yet, as business needs grow in both size and complexity, legacy systems can hold organisations back, acting as a brake on innovation.
Tony Connolly, founder and chief executive of cloud-based accounting software provider AccountsIQ, said a major reason for businesses seeking to shift their accounting away from on-premises systems was growth and the complexity it threw up: in other words, businesses that are expanding, especially into a multi-entity world with offices in multiple jurisdictions, can find that their existing systems cause problems.
“When people are working in a multi-entity group finance department, the cloud makes it far easier to access and control group-wide activities – and that’s something that’s hard to achieve with an on-premises setup running in your office,” he said.
Going multinational also means dealing with different accounting and tax regimes. Irish business, post-Brexit, now finds itself looking more and more toward continental Europe, while still continuing to expand into traditionally favoured markets such as the United States, Australia and Britain.
Obviously, there are complexities around different jurisdictions, and recent attempts to put an end to global giants closing sales from one country in another have also led to a tightening of regulations.
“Post-Brexit, and with things happening globally around tax, businesses are being, at a minimum, asked to distinguish their operations between jurisdictions,” said Connolly adding that AccountsIQ’s software is now used by clients with operations in around 80 countries.
“We handle foreign currency and local taxes like Vat in Ireland, Vat in the UK, GST in Australia and sales tax in the US. In the UK they have implemented MTD, making tax digital to digitise returns, and we are fully compliant with that,” he said.
Internationalisation is not the only trend, however. Accounting, like other key business applications such as customer relationship management (CRM) and enterprise resource planning (ERP), is in the middle of a technological and cultural revolution. Businesses not only want to lower capital expenditure on IT systems, they want to add intelligence to their operations. The upshot of this is a move to cloud computing platforms, notably Software as a Service (SaaS) such as AccountsIQ.
“The world is moving to the cloud, and the reason for that is the idea of computer applications as a utility: you pay as you use it,” said Connolly. “We charge our customers as they use it, whereas in the past first you’d pay a sizeable upfront licence fee and then have to buy a server, plus maintain and back it up. So there were [both] capital expenditures and ongoing costs.”
AccountsIQ’s customers no longer have to worry about things like back-ups, as the software does it automatically in the cloud. “Our focus is on providing customers with anytime-anywhere access 24-7,” said Connolly.
But cloud does more than change cost structures and ease maintenance. It also adds flexibility.
“Covid has been an interesting experience in that regard: businesses need their people to access their systems remotely even from different countries, and the way to do that is in the cloud.”
Indeed, AccountsIQ makes use of cloud platforms for its own internal operations and so was able to have its workforce up and running remotely in just one day when Covid hit.
“The reality of not having to be in the office nine-to-five is going to continue even past Covid. That’s what cloud utility software is all about,” said Connolly.
A move to the cloud also has security and compliance benefits, both of which are of paramount importance today.
“In terms of GDPR, we are a data processor. Ultimately the data belongs to the customer; while we’re delivering the solutions and platform, the data is ultimately theirs. We don’t even access it, we are very strict on that. We’ve implemented very strong data security systems and processes and are currently getting ISO 27001 certification for that,” he said.
AccountsIQ also doubles down on security by regularly bringing in independent auditors to perform penetration tests on the platform.
Accounting systems, like regulations, are notoriously complex, however, and this can act as a drag factor, with fears of disruption to everyday processes resulting in inertia. Connolly said AccountsIQ had good methodology and processes to migrate its customers over from the software they currently used, as well as AIQ Academy delivered online to teach people how to use their new system.
“We take care of the migration. A lot of it will depend on the extent to which they want to restructure reporting and analysis, how well structured the data is in the old systems and to what extent they need historical data,” he said.
Some organisations, for example, choose to bring across open items while keeping an image of the old data, whereas others want to move as much as possible. Connolly described the choice as pragmatic.
“There tends to be a linkage when they move it across. Another trend in the cloud world is integration into other systems, such as in retail point-of-sale (POS), reservation systems for hotels, e-Commerce sites or perhaps specialist systems focused on specific sectors like advertising commissioning systems.”
This allows not only for modernisation and automation, but the use of data for better business analytics.
“What people tend to go for is ’best of breed’ solutions and integrating these using web service APIs. Almost 90 per cent of our sales involve integration.”
The reality, Connolly said, was that the world had moved into a new era, and enterprise IT needed to reflect that: customer and staff expectations demanded it. Automation was a key factor in responding, by reducing drudgery and increasing productivity.
“A lot of making things easy is automating processing transactions as much as possible: approvals via our mobile app, OCR [optical character recognition] scanning for invoices, auto synching of bank accounts for example.”
The goal is not only to reduce mundane tasks like keying in information: “We give them more access to group-wide business intelligence to help them to improve the profitability of their business.”
Given how central computers have been to business for decades it is no surprise that IT empires have built up both within and outside organisations to support complex applications running atop even more complex architectures. Post-Covid we can see that the walls of the castle had already fallen, but the right cloud software strategy offers the best defence of all: getting on with business.
“People don’t want to have to run their finance system, they don’t want to own the server; they just want to use the application and get on with running their business.”