By Kamlesh Rajyaguru, Director, International Products, NetSuite
The way businesses conduct their core processes is undergoing dramatic change. Cloud migration is considered the norm for many companies now, with a large proportion of small businesses moving to the cloud so they can compete with larger organisations on a global scale. Yet, despite huge strides being made in businesses transferring many of their processes to a cloud environment, finance and accounting is typically left in the dark. This is due in part to the highly sensitive nature of financial data and perceived loss of control. But how secure are business finance processes really, without some degree of automation?
They are lengthy, time-consuming, complicated and largely recorded on spreadsheets, leaving them wide open to mistakes — with potentially disastrous consequences.
Our belief is that finance and accounting is ready to ‘come of age’ in the cloud. These technologies have enabled the capture and use of dynamic tax rate and rule changes, allowing companies to increase corporate productivity, address more complex demands from revenue authorities worldwide, and gain a competitive edge. Here are five reasons why cloud technology will take finance and accounting out of the dark ages:
1. Improved security. There are always concerns that cloud solutions for finance might not deliver the unparalleled controls and risk mitigation of the highest tier that many companies have come to expect from their existing systems. The prospect of highly confidential financial data being handled by something other than a member of the accounts team and an Excel spreadsheet can be terrifying. However, the majority, if not all, of the leading cloud-based financial and accounting platforms, are compliant with crucial reporting and auditing standards for global business, including EU Safe Harbor, SSAW 16 and ISAW 3402. Data is, in fact, often safer than it was originally.
2. The opportunity is there. There has been a rise in cloud adoption, especially for small and medium-sized enterprises (SMEs), thanks to increased complexity in conducting global business. It decreases operational costs, increases productivity and reduces risk. As many businesses are beginning to recognise, migrating finance and accounting processes is the next logical step in an ongoing drive to focus more on core business and strategic differentiation — particularly vital for SMEs looking to find that competitive edge. Additionally, as global regulations and laws continue to change and develop, the cloud enables automatic updates to ensure compliance. In short, businesses want to sell more, not budget for accounting software upgrades, so there is a genuine need. If you’re running a global business that operates in all time zones around the clock, you need to be sure that you are taking all the necessary steps to improve productivity and ensure compliance.
3. It can alleviate your resourcing issues. Typically, SMEs have significant resource constraints, meaning they are not always able to find the best people for the job or hire entire teams of people — just the people, or single person, who fits into the budget. Additionally, with a great deal of companies now doing business internationally, it requires multi-jurisdiction accounting and tax knowledge. Budgets are simply not there, nor are the solutions to support local business processes. This is where the cloud comes in — by bringing core processes into the cloud and enabling localised support, businesses can focus on creating and selling — whilst opening up new talent pools across key geographies.
4. It’s the modern way. Transforming finance and accounting processes in the cloud gives businesses the opportunity to purge legacy processes. Most SMEs are aware that too much of their financial health resides in spreadsheets, although for some, it seems like the only option where there is control. The move to cloud rids companies of inefficient and outdated systems and allows for modern and repeatable transactions, allowing for access anytime, anywhere. It also eliminates the need for the system administrator to install updates manually as it is updated automatically.
5. CFOs are the new CIOs when it comes to software purchasing. The office of the CIO no longer wields iron-fisted control of technology decisions that materially impact the business. Functional leaders, including the CFO, are now able to enjoy more flexibility to make their own decisions about the technology and strategy which support their strategic and operational goals. Whilst CIOs remain involved in adoption and governance when it comes to new software processes, the ultimate buyer of finance and accounting solutions is now a finance executive, not a technology executive.
There are a myriad reasons why moving to the cloud is advantageous from a finance and accounting perspective, but the above demonstrate the fact that businesses worldwide are beginning to understand the potential and the opportunities created by cloud. CFOs have long seen the advantages of the key dashboard and trending figures they need when speaking to analysts, whilst those on the ground can understand the functional advantages and day-to-day enhancements that modern cloud-based finance and accounting can provide. Cloud aids global growth, simplifies and secures key processes and, perhaps most importantly, gives companies, regardless of size, a competitive edge.