Since its inception, cloud technology has fast become one of the most talked-about technology trends of recent decades. Tools such as Dropbox, LinkedIn, and Facebook are now being used by millions of people on a daily basis. But whilst the public may have been keen to take advantage, it’s well recognised that businesses have been slower to adopt the cloud for core business functions, waiting to see the proven results and cautiously observing security issues get ironed out before moving ahead.
One sector for which this is particularly true – and perhaps understandably given the sensitive nature of much of the work undertaken by the profession – is the accountancy sector. But change is afoot, and it appears to be being driven by something quite specific.
The industry has become more familiar with cloud-based technologies for functions such as file sharing and online document approval, as highlighted by a 70% increase in the level of electronic approvals in the last month alone by accountants using IRIS software. Additionally there has been a significant increase recently in the level interest from practices looking to take advantage of cloud-based services for core compliance activities such as completing and submitting personal, partnership and corporation tax returns and fulfilling auditing services.
One of the key factors that appears to be influencing, and perhaps even driving, change, is the growing impact of the Government’s Digital by Default strategy, which is starting to result in a real change in the pace of adoption of new technologies such as the cloud in the profession. The strategy aims to streamline processes and ultimately save money and improve efficiencies when it comes to dealing with Government departments.
One such department where change is taking place is HM Revenue and Customs (HMRC). Traditionally a department extremely reliant on paperwork, HMRC is increasingly turning its back on paper documentation and as a result, all businesses interacting with it are expected to follow suit. This means submitting tax returns online, as well as ensuring compliance with new industry regulations such as a shift to real-time reporting for payroll.
Unsurprisingly, these changes have had a major impact on UK accountancy practices, resulting in the exploration of new ways of doing business and the increasing adoption of cloud tools as a result. The advantages are becoming starkly apparent: not only can cloud tools help with smoother relationships and interactions with bodies such as HMRC, but they also facilitate far easier regulatory compliance in a landscape that is ever-changing and evolving.
Such benefits have knock-on time and cost-saving advantages, something which any professional consultancy firm is likely to welcome at a time when fee pressure is under high stress thanks to the wider economic climate.
Indicating the direction in which the industry is starting to move, we have seen ‘UK first’ technology launched for the former task over recent weeks, signalling a clear direction of where vendors, but ultimately practices, are seeing the future.
The impact of this change in approach is significant. A few years ago it would have been unthinkable to submit returns in any other way than paper form, but in 2013 a record 7.93 million tax returns were submitted online. And with new industry regulations such as the current shift to real-time reporting for payroll, cloud technology that was once seen by the industry as a risky option is now appearing on the horizon as somewhat of a ‘must-have tool’ which is going to not only help comply with new regulation, but ultimately help make considerable time and cost savings.
In recent months, one major milestone in the development of technology in the accountancy sector was the launch of the UK’s first cloud based tax compliance suite, and there’s little doubt there will be more to come given the growing appetite amongst practices.
It is of course well known now that cloud computing offers enterprises enormous opportunities. A recent survey found that 56% of European decision-makers say that the cloud will be a priority between 2013 and 2014. Undoubtedly, there have been comments about barriers to cloud adoption, and security has frequently been cited as one issue. The reality however is that cloud services are now incredibly secure, with high levels of encryption and authentication.
Naturally, it is to be expected that some areas of business will be comparatively more or less willing or able, to adopt new technologies as they are bought to market. However there’s no doubt that initiatives such as the Government’s Digital by Default strategy are helping to move things along, and with specialist cloud technology now available, it looks like the pace of cloud adoption in the accountancy sector may continue to gain momentum.