Is your company using cloud accounting software? Among U.S. executives surveyed for Robert Half’s 2017 report, Benchmarking the Accounting and Finance Function, more than half (51 percent) of U.S. respondents said they are using cloud-based software solutions in the financial function, compared with 42 percent in 2016 and just 24 percent the year before that.
Twenty-one percent of this year’s respondents said they plan to upgrade to the cloud in the future, while 28 percent said they have no plans to adopt the accounting technology — down from 37 percent last year and 49 percent from 2015.
Find out more about the growing use of cloud technologies for accounting and finance processes.
Reconciliations remain manual
When it comes to automation of the reconciliation process, companies don’t appear to be as quick to embrace the new financial software.
The Benchmarking report shows more than half of U.S. companies (58 percent) rely on manual reconciliation of accounts. Despite that, executives surveyed said they closing their books in less time, shaving two days off the process from 2016.
Of the tools for reconciliation, 20 percent of the companies use systems created internally, 22 percent use third-party software, and the rest manually reconcile.
Other technology findings
Excel is still widely used by companies of all sizes for budgeting, planning and analysis, according to the Benchmarking report. Sixty-nine percent of U.S. companies rely on Excel, up slightly from 2016.
Companies that use on-premises enterprise resource planning (ERP) as their primary financial system held steady this year, although slight increases were seen in adoption of cloud-based ERP systems. This business management software, which can include SAP, Oracle, Sage, Great Plains Dynamics and PeopleSoft, is used to collect, manage, review and interpret a variety of business activities.
As cloud computing gains greater acceptance, companies find the processing power of the cloud makes it easy and efficient to perform systems-intensive analysis. They're finding other common uses for SaaS (Software-as-a-Service), such as data storage and tax services. Even Quickbooks has online accounting software for small businesses.
Looking to hire professionals with cloud accounting skills? Find out how we can help.
Here are other benefits of using cloud accounting:
1. Cost savings from the cloud
Moving accounting functions to the cloud can be a more affordable option for companies. Instead of paying the expenses of a license fee and annual maintenance, you typically pay as you go with most cloud providers, usually on a monthly basis. Many cloud accounting software options cost less than $20 a month per user.
In this year’s Benchmarking interviews, many financial executives said they view cloud accounting technologies as important tools to help resource-strapped accounting and finance teams work more efficiently. Second, many companies are facing the reality they must migrate from legacy systems that are inefficient and costly to maintain, or be stuck using technology that vendors will no longer support.
2. Time-saving aspects
Cloud-based software is often easier to use and learn than in-house systems. Once everyone has been trained and the transition has taken place, cloud accounting can greatly reduce the amount of time spent crunching numbers and producing financial statements.
In the cloud, backups and updates can be delivered automatically, which offers immediate access to new customer features and no more concerns with installing latest versions.
Another time-saving aspect is that data in the cloud can be accessed anywhere, from any device, including mobile.
3. Greater security standards
Some executives still have concerns about safety in the cloud, whether it's online banking or payroll systems. But many industry experts think cloud computing is actually more secure than traditional in-house systems. That’s because cloud vendors must adhere to strict International Organization for Standardization (ISO) security standards, and they are subject to regular security audits.
Of course, no cloud provider can guarantee your information is 100 percent safe from hackers. But with today’s onslaught of data security threats, your financial data may be more at risk on your locally maintained server than with a cloud provider whose reputation is based on top-notch security.
Despite reluctance of many executives to update their financial functions, it’s clear that cloud-based accounting software offers important benefits for accountants and businesses.