In this new world, cloud computing provides the perfect platform for both accountants and clients to “collaboratively” work on the same data at the same time from anywhere in the world.
Today, powerful web-based services have created entirely new ways of thinking about capturing financial data, managing workflow, storing documents, presenting invoices, paying bills, and even how products are ordered and delivered.
All of these options are suboptimal at best, but for sure they are expensive, complex, inefficient and full of security risks. In the old world, collaboration meant taking copies of the data, or traveling to the client site or remotely logging in to the client’s computers (thereby taking over one of the computers at the client site). But when the accountant needs access to these records in order to provide consulting services, issue financial statements and prepare tax returns, there is a problem. The client has a business in which transactions occur, data is captured, management decisions are made, budgets are set and monitored, etc. The key issue is that accountants and clients need to “collaborate” in order to work effectively together. You can see from Figure 1 how the special nature of the accountant/client relationship is not well-served by this architecture. Since the rise of personal computers, state-of-the-art technologies have been dominated by desktop, premise-based accounting packages, where clients and accountants purchased their own LANs, desktops and servers. Of course, some or perhaps many people resist these new innovations, seeing no need for changing systems and processes that “work just fine.” So let’s take a look at just what’s wrong with the old world, and why the new world is so compelling for accountants and small businesses.
It’s no surprise that this new world centers on cloud computing and web-based software and services. In the past few years, a new world has emerged that forces us to rethink our standard ways of working. It means installing new systems, retraining staff, shutting down old systems, and “opting in” to the new ways of working. To add fuel to the fire, we all know that implementing new systems often causes painful organizational changes, forcing everyone to rethink and modify their processes. And these experiences lead many accountants to resist new technologies “until they work the bugs out.” This “bigger messes from clients” issue is a good example of how innovative, technological revolutions present us with useful and productive new tools, but at the same time, they disrupt our tried-and-true business processes, often in ways that seem to produce the opposite results they intend to produce. And as client-based accounting software has flourished, tax preparers continue to receive even bigger messes from clients than in the old shoe-box days. For example, with the new “distributed” computing model, accountants started to lose control of the general ledger because they could no longer be the gatekeepers of entries to the general ledger. But new technologies often come with some unintended drawbacks.