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Tuesday
Nov112014

It’s time to challenge the conventional wisdom

I still recall the 1980s, when accountants had just begun to use PCs. The first programs available were tax systems that mimicked the batch mode of mainframe computers to process tax returns. Accountants would fill in input sheets and hand them to key punch operators to key punch the tax returns. If changes were needed, they’d have to go through the same routine all over again.

PCs were supposed to put computing power at our fingertips, but we realized that, if accountants were to take advantage of the computing power of PCs, they would have to use their own fingertips. So we created the first interactive tax program—Tax Relief—that let accountants themselves use PCs to prepare tax returns. Tax Relief calculated the forms instantly, so accountants could do tax planning. When we showed Tax Relief to accountants, they would say, "Chandra, you must be kidding. Do you expect me to sit at the PC and 'key punch' a tax return?"

How many accountants do you know today who don’t use PCs to prepare tax returns?

The moral of this story is that, to take full advantage of any new technology, you must challenge conventional wisdom and reengineer your processes. Today, we have another revolutionary technology—the cloud. Look around you and you’ll see the many unexpected ways it is being used to transform our lives. In the accounting profession, the transformation may not be dramatic, but it will still be quite significant. Here are some examples of how it can transform accounting:

One unified accounting system: In the desktop era, clients went out and bought their own accounting software, while you used a professional system for write-up and trial balance work, and to create fully customizable financial statements. Unfortunately, most vendors are still following that same model. Just as with the first PC-based tax systems that mimicked the mainframe approach, these systems mimic the desktop approach.

Now, however, there is a completely new class of Accountant-Centric systems such as Accounting Power from AccountantsWorld that have challenged the conventional wisdom. Accountant-Centric systems provide all of the functionality you and your clients need into a single unified system that includes bookkeeping, write-up, trial balance, financial reporting, alerts to help you stay on top of your clients’ finances, and more. In these systems, offered only to accountants, you remain in full command over the entire accounting process. You decide the functions you want each client to perform, based on their needs and abilities. Clients log in to the system from your website to enter information, and you use the same system to perform your professional work, so that you and your clients share data. As the name indicates, Accountant-Centric systems put you back at the center of client accounting. Because clients’ accounting data is available to you in real time, you can use the advanced tools available within the system to offer crucial financial advice to your clients in a timely manner.

After-the-fact write-up: You probably still have clients who write manual checks for their businesses and come to you with their cancelled checks and bank statements, which your staff then enters into a write-up system manually. That time- and labor-intensive process is now a thing of the past. Thanks to the cloud, your firm hardly needs to enter data manually for clients at all, as every day, bank transactions for your clients are downloaded into your write-up system, keeping your clients’ books current while spending a fraction of the time your staff spends now. Not only that, keeping clients’ books updated throughout the year reduces the year-end closing crunch significantly.

Automated document sharing: In the desktop era, integration between applications just meant data exchange between different applications. The cloud brings integration between applications to a different level, allowing you to automate many time-consuming tasks.

Consider how you send finished documents to your clients. You’ve probably spent a significant amount of time and money to get tax returns, financials, and payroll reports to your clients safely and securely. Now, thanks to the integration of tax, accounting, and payroll systems with online document management systems and client portals, that process is completely automated, saving you hundreds of hours while enhancing client satisfaction. As soon as you close the books, for example, you can automatically save a complete set of reports and financials in client portals that your clients can access securely at any time, from anywhere.

These are just a few of many examples of how the cloud is helping accountants revamp their processes.

As part of our Expert Webinar Series, AccountantsWorld is offering Using Cloud Technology to Improve Your Processes, presented by AccountantsWorld President Jeff Gramlich.