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Why the cloud is key to a flexible, intuitive practice

Author: ICAEW Insights

Published: 22 Aug 2022

As the discontinuation of QuickBooks Desktop draws nearer, members highlight the advantages of moving to the cloud – and the main factor behind a successful migration.

As well as having to wrap up their clients’ accounts by that crucial year-end date, firms and practices that currently use QuickBooks Desktop must focus on planning for its absence.

Intuit announced last autumn that it would discontinue the UK desktop version of QuickBooks after 31 January next year. It would support the cloud-based QuickBooks Online only after that date, heralding the end of an era. Now, more than halfway through 2022, that endpoint is drawing ever nearer.

In March, a global survey from accounting software brand Caseware found that the vast majority of firms were planning to harness cloud computing in the coming months. That certainly chimes with what ICAEW Head of Data Analytics and Tech Ian Pay is seeing.

“Many firms are on that journey,” he says. “The pandemic has definitely shifted some behaviours, and there is an appetite to move to the cloud.”

Innovative working

Pay notes that remote working is much easier on the cloud, because the provider takes care of all the infrastructure and connectivity. But there are other important advantages, too, relative to those inherent in desktop software.

“One feature of desktop [software] that has always appealed to accountants is control. You’ve bought the package, you own it and can use it however you like. It also supports a traditional client interaction structure: your client hands you their reports, you export them to the desktop app and then ask the client to check how it has represented the data.”

In light of how technology has moved on, that is potentially not the most innovative or intuitive way to work, Pay explains. “Cloud applications create opportunities to renew your client relationships: as clients can also log into the system, you are able to collaborate with them – in real time. Plus, cloud platforms can interface directly with each other, helping you to streamline workflows.”

Unparalleled insight

Hailing from Johannesburg, Annja Louca is Director and Founder of Anlo Financial Solutions, where she now runs the firm’s Edinburgh branch. When Anlo launched in 2009, Louca used desktop package Pastel – from Sage-owned, South African developer Softline.

“I did everything on spreadsheets first,” she says, “and transferred the data on to Pastel. As I grew the business, I employed someone to do the spreadsheet processing and back up the data. Then she’d give me the data on a memory stick and I’d feed it into Pastel, restore it, get the trial balance and compare the financials.”

If a client’s books were particularly large, data backups were an hourly routine. Plus, Louca says: “There were always data corruptions. And as we added more staff, we faced delays if people were off and weren’t around to log in and pull the relevant data off their machines.”

As the firm grew, Louca found it increasingly difficult to balance work and family time, and often toiled through her holidays. When Anlo expanded to the UK, the geographical spread of the business made its desktop-based infrastructure untenable. In December 2016, Louca began to use Xero in the cloud.

“That month,” she says, “I managed to export and import data for a sample of 10 clients. The instant reconciliation was phenomenal. And I could send those clients management reports straight out of Xero, containing an income statement balance sheet, age analysis for debtors and creditors and a cash-in, cash-out summary. That impressed the clients, because we’d always sent those documents as separate PDFs.”

She notes: “I decided right then that we’d have to move the entire practice to Xero.”

On its website, Anlo highlights the “unparalleled insight” that has stemmed from its embrace of cloud software, adding: “If you had told us when we started Anlo that it would be possible to input expenses in real time through our phones and have them properly assigned and categorised, we probably would have laughed.”

Meaningful changes

Nikhil Sangani is a Chartered Accountant at small, north-west London practice Sage & Co (no relation to the software brand). After spending six-and-a-half years at Goldman Sachs and three years at PwC, he entered the firm in 2019 – joining his father, who founded it in 1993. In his extra capacity as Ambassador for ICAEW’s Small Practitioners Community, Sangani is using his perspective from working outside practices to examine how new technology is influencing their work.

He says: “Whether we’re looking at Making Tax Digital, bookkeeping software, bank feeds, regulatory shifts or the migration away from traditional processes, lots of very meaningful changes are unfolding across how practices operate. I’ve also noticed a big distinction: a lot of the younger members of our committee don’t have legacy systems to migrate away from – because the cloud was their point of entry when they first set up.”

For Sangani, the key factor behind a practice migrating successfully from legacy systems to the cloud is constant client education: communicating with your clients as often as possible about exactly what is happening, and why.

“For example,” he says, “cloud accounting technology has some great features, but has not yet developed to the stage where it can replicate the human judgement required to achieve effective compliance. So there’s an educational point there: the cloud can’t do the things that accountants spend several years training to do. It just enables us to do them in a more immediate, real-time way.”

Sangani notes that leveraging technology does create huge productivity gains, and the facility that enables cloud bookkeeping software to integrate with other cloud applications inspires deep-rooted transformational change in traditional accounting processes.

However, he adds that cloud applications also come with a new set of challenges to be aware of and adapt to. “Educating clients in a totally honest fashion about those challenges, as and when they occur, is the most effective way to realise the many benefits.”

ICAEW will continue to support members with help, advice and resources in the run-up to the discontinuation of QuickBooks Desktop – check our website for details.

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