Cloud Accounting – Need for Accountants

The entire world is increasingly adapting to cloud services from connected appliances to internet-based educational programs. Basically, cloud platforms have helped medium & smaller businesses to offer their services more effectively to their clients using shared technology platforms.

This has mostly happened by eliminating the need of dedicated IT infrastructure to handle data, accessibility & interconnectivity. The large businesses have also benefited by cutting their IT costs & availing latest technology at a fraction of their in-house costs.

So what does this entail for accounting profession & how it can benefit the accounting practices today? First of all, let us know the difference between cloud & traditional accounts.

 

Traditional
Cloud
A.   Data stored on files or local hard drives

 

B.   Data information is used by a single user.

C.   Automation of data entry not possible or not cost-effective.

Stored data on a web-based server available for access to authorised users from all over the world.

Multiple access available for updating & retrieval of data.

Automation-assisted accounting helping to reduce error & reduce time.

Advantages of Cloud Accounting
  1. Improve performance & efficiency by automating data entry process thereby reducing errors.
  2. Ability to employ remote employees provides flexibility, convenience & affecting the practice.
  3. Better safety for customer data provided by cloud service providers than viable for small & medium practices on their own.
  4. Ability to serve new geographical areas with help of cloud accounting. The practices can market their services over a vast range of geography & be able to effectively provide their services too.
  5. Ability to develop & target a niche clientele all over the country by using cloud services e.g. say providing personalised service in a very specific sector of agriculture which would not have been viable eventually because of a low number of prospects.

However, a word of caution for some of those practices who do not wish to give access of client’s data to a third party & lose control of their accounting data, that this might not be the route for those.

5 COMMON ACCOUNTS OUTSOURCING MYTHS ~ BUSTED! (PART-2)

  1. Cheaper the labor, lower the service quality.

It is a general tendency to assume the quality of a commodity in proportion to the cost price. But, when the global factors are in play it is a whole different game. In India, there are a lot of skilled, highly-qualified and experienced graduates  in the workforce.  Service provider’s long track record of working in the British environment is an asset.

info@米6米乐体育 is able to successfully provide you a competitive pricing as compared to other local outsourcers as it is located in a sub-urban area (as opposed to a metropolitan). The skilled and trained qualified workforce along with the locational advantage is what info@米6米乐体育 offers to all its clients.

  1. Outsources have tendency to extend the working relationship which is against the long-term interests of the company.

The process of outsourcing is at best an ‘evolving’ one. Both parties see in time how things are working for them, what needs to be changed so on and so forth. As a business looking to outsource your operations one should openly discuss the plans for the future with their outsourcing vendor, which must be signed under an agreement between both firms.

Being straightforward about the kind and volume of work will ensure that confusions are kept at bay.

Communication is the key!

  1. Constant excuses for not delivering as promised.

Such hitches can be avoided by ensuring that you choose an outsourcing company with high work ethics and adherence to the standards of service quality. The accountancy getting their work outsourced should keep the teams (both offshore and onshore) involved, giving incentives and appreciation as an encouragement to work harder.

At info@米6米乐体育 we maintain a strict regime of maintaining and adhering to the work processes. We also ensure timely exchange of information between the client and the team to avoid any kind of gap that may lead to unwanted delays.

  1. Different person to deal with every time.

It is the basic protocol of any outsourcing firm to dedicate a specific team to their client. The team manager (Accounts Manager in this case) will be there to receive any query or instructions from the clients end. In case there is a new person on the job info@米6米乐体育 ensures that he is properly trained to deal with the specific conditions of the client and a prior notice is given to the client informing them about the change.

  1. Impossible to bring the services back in-house In future.

Or is it? Most accounts outsourcing businesses have their own technical infrastructure. At info@米6米乐体育, we access your systems through a remote desktop access. At any point you wish to bring back the activity into your facility, you simply change the login details provided to us and that would terminate our access to your system. All data is kept and processed on your systems and none of it is held by us.

5 Common Accounts Outsourcing Myths ~ Busted!!! (Part ~ 1)

Outsourcing your core services (bookkeeping, tax preparations, payroll etc.) can prove to be an intimidating task, since you’ve never done it before or are dealing with a new outsourcing vendor of a new
country. And often, these fears and uncertainties can give birth to a lot of myths. Let’s try and bust some!

  1. Outsourcing is only for big and mature companies

This is the most common myth among the newly established British accountancy practices (small-scale to medium scale) that prevails. But, contrary to the popular belief, the decision to outsource their activities if a fruitful one as these practices are looking to grow from startup to a mature organisation.

The erratic nature of work inflow is what info@米6米乐体育 is beautifully accustomed to and hence is more than ready to tackle it.

  1. Communication and Technical Infrastructure imbalance

An expert outsourcing company will always be ready to deal with gaps in communication by ensuring superiority in technology and related equipment; establishing clear communication lines between the firm and the client and guaranteeing that the right person receives the necessary information.

At info@米6米乐体育 communication is usually maintained between the parties via telephone, emails and online video conferences.

Our separate IT department is adept in dealing with sustenance of such technical requirements of the business.

  1. Cultural and linguistic differences creates obstacles in mutual understanding

Usually, this poses a risk if the outsourcing firm is in direct touch with your clients. The language style and cultural nuances become impediments to your success. But, as an outsourcer to another British accountancy practice there is little or no such risk.

info@米6米乐体育 boasts of qualified, well-versed and capable staff dealing with the British atmosphere for about a decade now. Issues regarding the matter (if any,) are dealt with speedily and sorted out in no time.

  1. Lack of control and management

Managing personnel in-house is a lot easier. From operations to training to communications you have the ability to exercise control to ensure the standards are met. Ideally, a premier service provider ensures a well-trained staff, adjusted to your preferences and protocols.

info@米6米乐体育 has been working with British chartered accountants since 2004, and has ensured that with timely communication and control, the jobs are executed as per the desired standards.

  1. Time Zone difference

Nobody can deny that there are issues in outsourcing to firm based in another country. But, such difference that also affects the work flow can be continually overcome by establishing flexible communication channels. Any urgent work can be done on priority and be promptly replied to and the normal operations can be done within the usual prescribed timeline.

At info@米6米乐体育, we pre-establish the work principles regarding the frequency and mode of communication along with singled out professional staff dedicated to your firm.

Accounting Outsourcing–Gaining ground in the United Kingdom

IT (Information Technology) outsourcing has been a significant trend globally for more than two decades now. US have been a leader in the world in outsourcing due to the combination of high overhead costs and strong cultural affiliation between the US and Asian technology companies. Most of the accounting outsourcing work started with requirements of companies worldwide to provide services to accountancy firms in the world.

As the business model proved successful, a lot of companies outsourced their Customer service, data entry and financial services later. If the US has been at the front to outsource the work, then it is India which has been a significant service provider. At present, it is estimated that at least 285 out of Fortune 500 companies outsource some of their work to countries in Asia.

So where is the need for a firm to look for accounting outsourcing its work? 

Like all businesses, accountancy firms are there for profits and long term sustainability. Some of the major issues confronting the firms are:-

  • Staff Costs form a significant part of the operational costs.
  • Small firms and startups have difficulty scaling their resources to meet the fluctuating needs of the business.
  • Tougher competition in a slowing economy.

In the midst of all this accounting outsourcing services in UK are growing every year. Most of the top 100 firms are either actively involved in the process or are on the lookout. The primary mode of operation of these firms has been to set up captive centres in India. Apart from large accounting firms, large companies like BT and even some government councils etc. actively outsource their finance and accounting work to India.

However, it has been seen that only a small percentage of small and medium practices have hired outsourced accountant. There are apprehensions about various issues like staff non-cooperation, software licensing, security issues, work quality, fear of redundancy of essential work etc., and these firms are trying to find a way out of these concerns. Many firms are just testing the waters and selectively indulging in the practice of accounts outsourcing to take care of the busy season.

What have been the significant benefits of  outsourced accounting services  ?

Operational costs are a significant draw as it decreases. There is also an increase in the total chargeable time of the existing staff, which allows them to concentrate on high-end work. Otherwise, even savings from the outsourcing funds an additional full-time person with analytical capabilities for generation of consultancy work, business valuations, acquisitions, forensic accounting etc.

There are other hidden advantages also as you move from papers to scanned documents, some document management system comes into place. Moreover, as you interact with the service provider through emails, it forces the firm to be more precise and more disciplined in their communication.

We do feel that outsourced bookkeeping shall continue to grow in the UK at a faster pace than earlier and it shall be a significant trend for the coming years for the reasons as summarised below:-

  • Firms that don’t consider accounting outsourcing as an option will be at a competitive disadvantage in the near future.
  • Significant cost savings are possible by moving the online bookkeeping to non-UK locations like India, where the talent is capable and cost-effective.
  • Using emerging technologies and finance function services will reduce headcount, producing even more significant savings.
  • Firms will need to develop internal systems and discipline to achieve these changes.
  • Cost is not the only motivator. So is flexibility and the ability to change.

 

By:  Kawitansh Khanna  CA (Director,  info@米6米乐体育 Info Solutions (P) Ltd .)