In 2009, we were first introduced to cloud accounting, which was web browser accounting software like Xero. We really like it and strongly believe that it will be the future! 10 years into this technology and changes, we think Cloud accounting might not be the future anymore, even though there are still businesses and accountants who are still scare away from the Clouds.
So what should be the next?
We predict the future of accounting software in general to be more decentralised. Each business, each user will be using very different software. Accounting functions also will be varied in different area of business.
We think that cloud accounting will actually disappear in SMEs. The SMEs would be able to employ simpler business applications to manage some parts of their accounting function. The applications would be able to process financial data for management and compliance purposes.
Let’s pick an example of a coffee shop business:
Jane is a coffee shop owner. She is using multiple business applications to auto-feed her financial data into accounting software. It could be Xero or Intuit QuickBooks.
In the future, Jane might not need a cloud accounting software to manage all complicated accounting transactions since her business applications could be able to do just what Xero or Intuit QuickBooks is capable for.
Point of Sales (POS) application should be good enough to produce a comprehensive sale reports for Jane to keep track of her financial sale performance. POS could also be able to integrate to the ATO database so ATO could collect GST and tax information instantly.
HR application could be able to handle all core payroll function from on boarding, timesheet, rostering, leave, payroll, payment summaries, and superannuation to reporting to the ATO. There might not be a need for Jane to integrate from HR to any accounting system. The list then goes on to all other areas of their business: Bill management; Inventory; Asset management…
What about bigger guys in town?
We think that the same principle will apply. There might be the decentralisation of systems like SAP or Oracle!
The nature of high volume transaction and layers of authority require different type of reporting. The level of decentralisation will only be focusing on the functions which can be independent like Payroll, Accounts Payable, and Accounts Receivable. All others functions will still need to stay in the big accounting software.
The future of cloud accounting might actually disappear for SMEs when business applications enable decentralisation and the law becomes simpler. These will allow SMEs eliminate the need of cloud accounting software.
For larger companies, cloud accounting might fully take over desktop-based accounting and become a more powerful data warehouse with more automation & AI built-ins to help them analyse data even better.
The core function of future big cloud accounting platform might be more driving toward data analysis rather than data entry. The ultimate goal is to produce good business intelligence to help businesses make right decision in real time.
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