Cloud-based Accounting Offers Challenges, but Big Rewards

Accounting technology pioneer Doug Sleeter outlines the steps for getting there Moving the accounting profession away from its manual financial systems and onto computers in the 1980s and '90s was a monumental task. Doug Sleeter, co-founder of the renowned Sleeter Group, was one of the visionaries who made it happen. He saw the future of accounting, and it didn't lie on paper ledgers.

Fast-forward to 2012, and Sleeter is taking on a challenge almost as formidable. He's helping to transform the profession once again – not simply riding the wave to the next transformation ofaccounting technology, but helping to shape its arc.

Obviously, that wave will use cloud-based computing as its platform, but what's happening will once again dramatically change the way accounting firms and businesses move their numbers. Sleeter has identified four distinct trends in this transformation.

The building blocks

He calls the first, chunkification. Desktop, out-of-the-box bookkeeping software has served commerce well over the last couple of decades. But in many cases, financial professionals have had to continually pound square pegs into round holes as they attempted to use one-size-fits-all solutions in a market where every business has unique needs. As businesses continue to evolve, desktop software offers horizontal solutions to a vertical, increasingly online world.

Concur is an excellent example of this new paradigm that Sleeter envisions. Web-based solution providers like Concur are taking one slice of finance and not only developing an expert application to manage it, but building it to integrate easily with related applications that complement each other.

So rather than providing a rigid framework whose elements fit together well but leave little room to accommodate the enormous differences among businesses, today's most forward-thinking developers are providing expert "chunks" of functionality that will connect to other chunks and support each other.

This means that companies can choose only the pieces – the cloud-based applications -- that best fit their organization, instead of investing in one solution that may meet their needs in some areas but is lacking in others.

Putting it together

Chunkification gives businesses the opportunity to invest only in individual, superior solutions that fit. Which means, of course, that application developers must build solutions that will assimilate with like solutions.

But someone has to orchestrate those partnerships. That'll be the role of accounting professionals who will use the knowledge of bookkeeping and of technology-based financial systems that they've acquired and take on their new task of Lego Mastery, according to Sleeter.

It's an apt description of a process that's simple in theory, but which will be a challenge in practice. Like an artist assembles a complex, attention-grabbing structure after choosing the Lego pieces that will best work together, today's accountants must identify the best chunks for each client and know that they will cooperate to create a customized, efficient accounting structure.

Reducing mistakes, repetition

Sleeter sees these new processes moving businesses toward a model that will accommodate – finally – Zero Data Entry, the third trend he identifies. Of course, there will always be the need for some data entry, but now the information that customers, vendors and employees contribute will truly never have to be entered again because of the new software connections and data flows.

Desktop accounting software eliminated an enormous amount of duplicate data entry, improving accuracy and workflow, and removing some of the burden from financial professionals and bookkeeping departments. But when each piece of a company's financial solutions can share existing information, we'll see tremendous boosts in efficiency and data accuracy -- and reduced accounting costs, Sleeter says.

The unifying element

Sleeter's fourth trend – collaboration – leads to both challenges and opportunities for accounting professionals and their clients. By working together to harness the power of cloud computing, selecting the best chunks of compatible functionality and minimizing data entry, financial practices and businesses alike will enjoy a similar payoff.

Specifically, businesses will be able to train their focus on growth and increased profitability, while accountants will offer more sophisticated, high-value consulting services like analytics, real-time dashboards and management consulting, Sleeter says. Cloud computing will simplify the mechanics of tracking the numbers and unchain professionals from their desks because of its anytime, anywhere access.

Getting to those payoffs may involve some disruptions to everyone's workflow as incremental changes occur and the technology evolves, he says. But as this cloud-based collaborative world settles into place, the rewards will have made the journey worthwhile.

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