Sleep more easily at night with cloud financial software

Many CFOs and their teams are under constant pressure to ensure that their financial processes remain streamlined, accurate and sustainable, even as their respective organizations continue to undergo rapid expansion. With the remarkable evolution of business software over the past 30 years - from early desktop productivity suites such as Lotus Notes to software-as-a-service communications solutions such as Slack - it would in theory seem like every company would have a straightforward path toward scaling its accounting operations in tandem with its growth trajectory.

After all, one of the essential promises of cloud computing in particular is the ability to have infrastructure that is responsive to mission-critical applications, rather than the other way around. Traditionally, a firm's programs have been dependent on the servers, networks and PCs that were available on-premises. The limitations of these IT assets dictate what any given application can do for the organization's finance team. They are often outmoded and not easily interoperable as well as costly to maintain and upgrade.

With cloud financial software, the tables are turned. Application performance can now be supported by the elastic resources offered over an IP network by the cloud service provider. If more instances are needed to help out employees in the field on mobile devices or at branch offices, then infrastructure responds to the demand behind the scenes. It's the same sort of process that ensures that services such as Gmail and Amazon.com can support so many concurrent users.

Theory versus reality: CFOs still worry about reliance on legacy tools and practices
Despite the immense and obvious promise of new cloud accounting software, many finance departments are still beholden to the applications of the past, and their CFOs are kept up at night by persistent problems. For example, a 2014 survey of 600 small businesses, conducted by domain provider GoDaddy, found that more than half of them still used pen and paper and/or spreadsheets to track their finances.

"The cumulative effects of manual processes can really drag on a business."

The cumulative effects - e.g., data entry errors and maintenance of redundant Microsoft Excel sheets - of relying on manual processes and legacy software can really drag on a business. Forty percent of the surveyed SMBs reported spending multiple days on tax preparation. The same percentage characterized bookkeeping and taxes as the most unpleasant aspects of running their businesses.

The GoDaddy study provided some insight into why many organizations continue to struggle with their accounting processes. While fewer than half of businesses relying on manual activities performed up to their own expectations, 60 percent of those utilizing modern software and Web services did the same. The perks of automating financial management through cloud-based apps are readily apparent.

A 2015 white paper from Intacct similarly displayed the gulf between the ideal of seamless accounting in the cloud and the reality of widespread reliance on manual processes. Several CFOs revealed their biggest concerns about their operations, including:

• The extent of their reliance on spreadsheets, which are too fragile, unsecured and limited to reliably handle tasks such as revenue recognition or asset consolidation.
• Inability to regularly produce deep analysis and insights on-demand for everyone in the boardroom.
• Time-consuming, labor-intensive consolidation of all the company's tax identifiers, currencies and individual entities, which leads to long closing times and slowdowns during critical growth periods.
• Failure to bill 100 percent of all time and expenses, due to elaborate manual processes and inefficient software tools.
• Lack of agility from on-premises IT systems, as described above; infrastructure simply cannot keep pace with rapidly evolving reporting requirements.
• Siloed applications that feature few or no out-of-box integrations and cannot easily interact with everything else that is going on in the business.

All of these common, fundamental issues stem in part from inadequate tools. As businesses have taken up cloud software, become more invested in data analytics and faced external pressures from competitive marketplaces, their accounting tools have not always kept up. Capitalizing on growth opportunities means taking up tools that are scalable and easy to support and access from a wide range of IP-enabled devices.

"We had been using an on-premises system, and found that it could no longer support our accounting needs as we grew," stated Jodie Mote, treasurer and controller at the UAB Educational Foundation. "We decided to move to the cloud so we could implement a streamlined electronic process, while avoiding the headaches of traditional software installation."

The difference that cloud ERP and accounting can make
Financial management via enterprise resource planning is at the heart of what businesses of all stripes, from professional services organizations to education firms, do each and every day. If the ERP system does not perform as needed, it can drag down the entire organization.

Cloud ERP can be a game-changer for a rapidly growing business.

Instead of depending on manual processes, companies can automate a full range of basic and complex accounting tasks using cloud ERP. Accordingly, they can obtain real-time insight into how the business as a whole is performing, opening up opportunities to make adjustments on the fly and share valuable information with other parts of the organization as it becomes available.

All the while, cloud financial software is lightweight, easy to manage and readily accessible:

• The CSP takes care of security updates and other maintenance, taking a huge weight off of the backs of the IT departments that once handled such responsibilities.
• Any device with an Internet connection can securely log into the application, without the need for complex terminal servers.
• Quick implementation times, thanks to help from the SaaS vendor.
• A convenient pay-as-you-go billing structure that can help lower costs compared with traditional licensing processes and regular CAPEX investments.
• High degree of return on investment and rapid payback as a result of the minimal infrastructure costs and operational agility of the software.

It is important to remember that the cloud is still a relatively new phenomenon, despite the amount of media coverage it regularly receives. Adoption of related solutions may take time, but many SMBs are already coming around after seeing how they can get software that supports their business initiatives instead of holding them back.