Are You Ready for a Cloud-Based Financial Solution?

Accounting in the Cloud

Is moving financial reporting systems to the cloud a good idea? Should accounting and finance teams adopt cloud-based computing? It depends on whom you ask.

As accounting and finance professionals get comfortable with new technologies, more companies are embracing cloud computing — a broad term that describes a range of online-based services, eliminating the need for in-house servers and locally installed software.

Moving to cloud-based financial systems  

The number of financial systems being managed in the clouds is growing, according to the financial executives surveyed in the latest Benchmarking the Accounting & Finance Function report from Robert Half and Financial Executives Research Foundation (FERF).

Of the U.S. respondents, 42 percent said they’ve already adopted some cloud-based solutions, and 20 percent said they’re actively exploring the options of using them, leaving just 37 percent who still opt to keep all of their data in-house. A year ago, nearly half said they weren’t making that leap.

Small businesses have been especially eager to embrace cloud computing. Last year, only 20 percent said they were using the cloud, which grew to 41 percent this year — and 11 percent of the small businesses in 2016 said they use only cloud-based solutions for financial functions. 

As David Noymer, CFO of a Boston food bank, said this year in the report, “There are some awfully attractive cloud solutions out there that I’m very interested in learning more about.”

Download the latest Benchmarking report to see how adoption of financial cloud-based solutions is growing.

Fewer on-premises ERP systems

In the last two years, the majority of companies interviewed using an enterprise resource planning (ERP) system tied to a local server has decreased substantially. In 2014, 78 percent of the respondents said they used a traditional, locally installed ERP system, and in 2015, 53 percent said they used an on-premises ERP system. This year’s survey shows that percentage has dropped to 32 percent.

That’s a possible response to the growing use of cloud-based solutions for financial systems and the overall increase in technology investments reported by many companies.

As one corporate controller said in the Benchmarking survey, his company’s next IT project is to move its network files and ERP system to the cloud and gradually reduce on-site servers.

Hesitancy to jump to the cloud

Some executives who expressed caution about the cloud say they’re concerned about external entities being responsible for the protection of sensitive information, or they simply don’t have the bandwidth to make the transition.

A corporate controller of a Canadian manufacturing company quoted in the Benchmarking report said, “I’m still not 100 percent convinced that my data in the cloud would be as stable or as secure as I would like it to be.”

For Noymer in Boston, the apprehension about technology investments is “less about the funding and more about the team needed to implement a solution.”

Benefits of cloud-based solutions

Cloud proponents say there are more benefits than drawbacks, including the following:

Cost savings: When maintenance and support costs are built into the subscription-based, pay-as-you-go pricing of cloud systems, companies typically can save on hardware, software, upgrades, tech support and licensing.

Resource savings: Using the cloud, many companies are choosing to outsource their payroll and tax duties using cloud-based computing systems. 

Information sharing: The cloud allows spreadsheets to be accessed from anywhere, which can be an advantage if reports need to be shared with clients or colleagues in other locations. 

Collaboration: Cloud computing enhances staff mobility and provides companies with a continuous, mobile-ready connection that syncs data instantly wherever there’s internet access.

Time savings: Cloud-based software is often easier to use than in-house systems. Once everyone has been trained and the transition has taken place, these solutions can greatly reduce the amount of time spent crunching numbers and producing financial statements.  

Security: Many industry experts say cloud computing has more security benefits than traditional in-house systems. Cloud vendors must adhere to strict International Organization for Standardization (ISO) security standards and are subject to regular security audits.

Budgeting and long-range planning tools

When it comes to budgeting and long-range planning tools, Microsoft Excel remains the software tool of choice for 68 percent of U.S. companies surveyed. Survey responses indicate that Excel is especially popular with smaller companies: More than three-quarters (77 percent) of businesses with less than $25 million in revenues said they use Excel for budgeting and planning.

Of course, Excel can be used and shared using cloud storage systems, such as Dropbox, Google Docs and Microsoft OneDrive web service.

Migrating to the future

There are many ways for organizations to employ cloud computing. They can look to business systems and IT consultants for assistance with evaluating, implementing and getting the most value from cloud-based solutions.

Need help moving to the cloud or setting up the necessary security protocols? Robert Half Technology can help you find the IT professionals you need.

For employers, managers, employees and job seekers, it’s a good idea to stay current with the changes brought on by the advent of cloud-based technology. Whether you like it or not, cloud-based solutions are changing the way accounting and finance professionals work, providing more effective tools and opening doors for new business models.

Bottom line: Don’t fear a move to the cloud.  

Andy Denka is the executive vice president of Accountemps. John Reed is the senior executive director of Robert Half Technology.  

Get more resources to help your small businesses thrive by viewing Robert Half's latest workplace research.

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Editor's note: This post was originally published in January 2014 and was updated in 2016 to reflect more current information.