The Accounting Journal: today the cloud, tomorrow – the sky’s the limit!

Part 6 of MYOB’s 6-part series on the 60^th Anniversary of Accounting Software – see part 5 here

Over the past five articles we’ve discussed the history of accounting, the developments in society and technology which were driven by the need to track goods, exchanges and resources, and the rapid advancement in techniques and tools which has characterised the past six decades.

Modern accounting hardly resembles its roots, when scribes were charged simply with keeping track of stores of grain or trades of livestock. With double-entry bookkeeping, joint stock companies, sophisticated investments, and political measures like the GST, today’s accountant must possess expertise in a range of areas. Computers are indispensable tools and partners in this.

It’s a safe bet that this partnership is not done evolving, but where are we headed next?

In the 21^st Century the day-to-day work of accounting is less tedious, more efficient, and has a far lower error rate than days past, thanks in large part to technology.  But far from eliminating the professional accountant, automation means that being effective still requires a great deal of expertise – now in more areas than ever before.

The term “cloud computing” takes its name from the cloud-shaped symbol used to represent the internet in flowcharts. Put simply, it refers to computer resources whose physical location is not relevant to the services they provide. Your always know where your own desktop or laptop computer is, and you usually have to be nearby to get any use from it. But cloud resources are only as far away as the network – which is often available in the palm of your hand, via smartphone or other mobile device.

This is not only an advance in convenience, but it allows critical functions like security and backups to be performed by experts quite cost-effectively.

Why pay the wage of a fulltime professional to secure just your office server, when you can pay a fraction of that money for a team of specialists who are working just as hard to secure the data on ten thousand servers in a managed data centre?  Cloud resources can be heavily protected, redundant, and backed up to alternate sites around the world, all at a reasonable price, due simply to the economics of scale.

And if (when?) you experience a failure of your local office equipment, your crucial client data remains safe and available.

What’s more, you can pay for these services on a monthly basis, rather than investing in equipment you’ll have to own and maintain while watching it depreciate. The provider assumes responsibility for the technology, upgrading and repairing as required.

And you’re no longer locked into a single solution for years to come!  You couldn’t dream of enjoying the benefits of free-market competition among the computing resources in your own office, but the cloud brings that benefit of capitalism to the pricing of data services.

• Automation means more of the unthinking busywork is done behind the scenes by software links between banks, creditors, vendors, accountants and clients
• Cloud technologies free us from geography and bulky hardware, allowing us to conduct business wherever desired and whenever required
• OCR (optical character recognition) and speech-to-text technology allow machines to read printed documents and listen to our instructions, further improving convenience and flexibility
• Data processing allows businesses to discover and exploit insights gained from relationships between different aspects of their activities, such as hidden sales patterns or unsuspected opportunities for streamlining supply chains
• By eliminating paperwork, computers improve the speed of paying and getting paid, reducing friction in the market and directly boosting the overall economy
• More information is available at the touch of a button, while document storage costs have fallen dramatically

As more of the manual labour of accounting is taken over by technology, the uniquely human aspects will move to the forefront. Your experience, judgement, ethics, expert advice and partnerships will be what makes you valuable to your clients.

I think almost everyone will be happier building a business on the basis of your client service, the quality of which is always under your control, rather than externalities like who has the fanciest offices or the glitziest advertising!

Just imagine what future generations will have available, and how they’ll look back on our era…  “You actually had to touch things with your hands to do all that stuff?”