How has Cloud Accounting Changed the Accounting Industry?

The International Federation of Accountants (IFAC) reported in 2015 that the accounting profession would experience many changes between now and 2025. Evolving smart and digital technology will impact accounting, IFAC found. ACCA (Association of Chartered Certified Accountants) research also determined that globalization of reporting and disclosure standards would continue. Both of these changes are made possible by cloud accounting. Blockchain accounting, one of the most important changes that will affect the industry, is only possible through the cloud.

Resource: Top 10 Online Accounting Degree Programs

Small Business Changes

Cloud-based accounting has enabled many small businesses and sole proprietors to keep track of their finances largely on their own. Accountants review year-end statements and prepare tax returns, but they use reports from cloud accounting software. Many accountants are moving into business planning, working with businesses on improving control procedures and on matters like succession planning and building capital reserves. Forward-thinking accounting firms are using technology to change how they work with clients.

Collaboration and Partnership

Jeff Donohoe, a CPA who works with multi-state businesses, told Forbes that “The more accountants and small business owners can start collaborating as partners, businesses will start seeing better outcomes.” By freeing accountant and business owner time from mundane, repetitive tasks, cloud-facilitated accounting can support better business intelligence, planning, and decision-making. CPAs like Donohoe believe that artificial intelligence, made possible by cloud computing, can give indications of what smart business decisions will be in the future. He also believes that human judgment, timing, and intuition, will continue to be the primary drivers of business decisions.

Globalization and Research

Many businesses have already hired accountants or bookkeepers who live thousands of miles away through cloud-based programs. Accounting associations and major accounting firms like KPMG continue to study the impact of globalization on the profession. The rapid rise in international business accounting is also facilitating research into fraud and corruption. Industry experts believe that the more reliable information cloud-based records can accumulate, the greater the opportunity to combat fraud and corruption.

Displacement and Disruption

Cloud computing eliminates the need for bookkeepers and accounting clerks and greatly reduces the time required for certified or chartered accountants need to spend on bookkeeping-oriented tasks. Oxford author and professor Daniel Susskind reported at the 2017 conference of International Chartered Accountants that accountants were “among the most open” of professionals to the coming disruption and change in traditional roles and responsibilities. Susskind believes that, eventually, future jobs for accountants will be completely different than current jobs. Accountants may lose job responsibilities in the future because automation will fulfill those tasks. In compensation, CPAs will be asked to do more work in human areas of responsible financial administration and ethical use of funds.

Some accountants have wondered if the rapid changes in the accounting industry might signal the end of the profession. Most experts and major accounting firms don’t believe that jobs will come to an end while automated software performs all of their tasks “in the cloud.” The way in which financial information is used to manage businesses will certainly change in the future as revolutionary concepts in mobile and cloud accounting continue to evolve.