- Yawning gap in accountants’ understanding of business needs
- Two-thirds of SMEs would replace accountant who ignored cloud software
- SMEs keen to replace accounting roles with cloud software
A majority of SME business owners in Australia would consider replacing their accountant if they failed to make the transition to cloud accounting software, according to a survey by CCH, a financial information and services company.
The survey, which canvassed 1,000 Australian business owners and 212 accountants, revealed a yawning gap between expectations in the business world and the standard practice of the accounting industry.
Despite growing demand for cloud-based services, accountants had been slow to take advantage of innovation in accounting software. Only 23 percent of accountants servicing SMEs had moved to cloud accounting software, said the survey.
Younger accountants were more likely to have explored cloud computing and adapted their firms to more efficient methods of working.
The research found that more than half of SMEs (52 percent) would consider replacing their accountant if he or she did not move to a cloud-based system, with this proportion rising to 72 percent among younger SME owners (aged 18 to 34).
Two thirds of business owners also would consider replacing some of the roles performed by their accountant with cloud accounting software. Younger business owners were even more open (86 percent) to taking this approach.
Despite the risks, only 52 percent of accountants expressed concern about losing services to the cloud.
CEO of Wolters Kluwer Asia Pacific, Russell Evans, said the survey was a wake-up call for accountants putting off a shift to a cloud software platform.
“It suggests a business-as-usual approach is not really an option for accounting firms. Their SME clients are saying they want to move down the cloud path and many will do so without their existing accountants if need be,” Evans said in the press release.
“And the impulse toward the cloud among younger business owners is even stronger, suggesting accounting firms risk losing a whole new generation of SME clients if they fail to act,” he said.
“The business case for making the shift is clear. By taking the initiative and moving to a cloud-based platform before their SME clients do, accountants can secure their central role in managing their client’s accounts, while freeing up time and resources to provide strategic advisory services, an activity highly valued by their clients.”
Momentum among accountants towards the cloud would soon reach critical mass, the survey found. Of the 77 percent of accountants surveyed who were yet to make the move, 60 percent expected to do so within three years.
When asked to specify the reasons for moving to a cloud-based system, a majority of accountants cited the ability to access accounts from multiple locations. Other reasons given were: no need to maintain or buy hardware maintenance; ability to scale up as clients grow; no need to manually update tax tables and other content; lower overall costs and up-front investment.
Reasons given by accountants for not having adopted cloud-based systems were a lack of familiarity with cloud systems (42 percent) or the existence of a working system (37 percent). Only 31 percent of accountants surveyed cited security as a concern, confirming growing confidence in cloud-based systems as their use becomes more prevalent.
“Clearly, the early barriers to adopting cloud software solutions for accounting are evaporating as they prove their robustness and worth in business applications,” Evans said.
“In weighing up cloud solutions the cost-benefit analysis is shifting rapidly in favour of the cloud, and that has not been lost among the accounting profession or their SME clients. The end result will be a more efficient interface between accountants and their clients, with less time spent on administration services and more on strategic business planning.”
The CCH research revealed the average accountant currently spends 63 percent of his or her time handling transactional or administrative functions for their SME clients, and only 37 percent providing strategic business advice.
Will you dump your accountant if he or she doesn’t move to cloud software?