The new crop of cloud accounting services allows small business owners and their accountants to work much more closely throughout the financial year – because they can both work with the same, up to date numbers at the same time.
The cloud vendors, quite rightly, push this new relationship model hard, and suggest that working with client data “online” is the future of the profession. This new model envisages accountants speaking with their clients regularly, to resolve queries and make corrections to the accounting records in small batches, as the financial year progresses.
However, despite the seemingly obvious advantages for both sides, I can tell you that every established accounting practice will have a large core of clients who do not want to work in the new model. These business owners are more than happy to sort out the books with their accountant once a year. In this scenario queries are resolved and corrections are made looking through the whole year’s transactions in one go. I know, it seems daft, but that’s the real world.
So, if a client has embraced one of the new, cloud accounting packages but wants just the once a year, service, will the accountant be happy to work with the data online now? Will he or she want to make (potentially) hundreds of corrections, deletions and re-allocations directly in the clients own accounting records? Without an audit trail of what they have done and with no way of restoring back the original data should they make mistakes?
Of course not. What the accountant will want to do is take a copy of the clients data – to work on “offline”. Corrections can then be made; safe in the knowledge that the client’s records are ring-fenced. Once the final numbers are agreed, then the accountant will be happy to process the year-end adjustments (usually in summary form) online, into the client’s cloud accounting software.
I believe the traditional model will continue for some time to come and, if so, this poses a challenge for accountants working with clients using cloud services.
The answer, of course, is to move every client into the new relationship model but that won’t happen overnight as many seem to think.
Note: in this context I mean "offline" to mean "not live"