By Elaine Clark Run your business No nonsense introduction to the cloud 5 May 2015 The cloud has been around for some time now; for many it is an integral part of their accountancy business whilst others are still to take the first step into the cloud space. If you’ve yet to make a leap or are trying to find your feet with this new way of working, here are some useful hints and tips to get you started. What is cloud? Cloud computing emerged back in the 1990s. In a nutshell it is a way of delivering IT through the sharing of resources. You may also have heard the term Software as a Service (SaaS) where the software is hosted centrally and is delivered to the end user is via a subscription model. So simply put, rather than have the software loaded on your hard drive you access the software stored on the supplier’s computers, usually via your web browser. This means you get the latest version of the software, you don’t have to back up your data because the supplier does that and you can access the software even if you do not have your laptop or PC with you. It’s exactly the same principal as accessing your bank account online. Cloud accountancy software Over the years many cloud accountancy systems have emerged such as Xero, Sage One, Intuit’s Quick Books and Free Agent to name just a few. All of these cloud accountancy systems are accessed on a subscription basis; some offer a free trial and others are free to use but most charge anything from £5 per month upwards to £29 per month. So they are not always a cheap option especially for the micro businesses or one man bands. Cloud accountants Using a cloud accountancy system is very different to being a cloud accountant. A cloud accountant is unlikely to meet clients, choosing to operate and offer accountancy services entirely through the effective use of technology. Often this allows the business processes to be streamlined and overheads to be tightly managed resulting in a much decreased fee being offered to the clients. The challenge with this model is building up credibility, rapport, confidence and trust with those that you have not met. This is entirely possible although likely to take longer than a traditional approach and is not for those who are not good communicators or are not technology savvy. Of course, with a market place of 5 million businesses, there is not a one size fits all option so any debate over whether a traditional accountant is a better option is pointless as the choice is entirely in the client’s control. That being said, cloud accountancy is a valid model which should be explored for those who have experienced a decline in profitability over the last few years as the price of labour and overheads has soared. There are several ways that you can work with clients using a cloud accountancy system … Become a partner It’s common place for the cloud software providers to want to add accountants to a partnership programme with an incentive of reduced rates on the software for their clients. Clearly the aim is to have the accountant recommend the supplier’s software to the end user, so creating an effective re-seller network. Usually you do not have to sign an exclusivity deal with the software providers, so you are able to offer and work with other systems should you so wish. Of course, with this model, the accountant would need to decide if they limit new client acquisition to those who are using their software of choice. This could limit growth but generally can be countered by the supplier listing the accountant in their Accountant’s Directory. Shared access Most cloud systems will allow your client to set up an additional user. This means that your clients can allocate you a username and password so that you can access their system. Of course, if you choose to operate in this manner it does mean that you could have to remember a different user name and password for each client. However it does allow you to pick up new clients regardless of the software that they are using so eliminating the limitation of becoming a software partner with one supplier. This approach would allow you to stay software neutral. No access You can decide not to access the client’s cloud accounting system and simply obtain a trial balance and a transaction list or nominal ledger print out at the year end. Your client could download these into an excel file and send them over to you. This approach somewhat negates the advantages of using cloud computing but it is a valid option for those who may not be ready to fully leap into the cloud just yet. Why use cloud? There are many reasons to use cloud accountancy systems such as, but not limited to: Having access to client data so that there is “one view of the world” and clients can be helped out immediately if queries arise Eliminating system and data back ups No need to upgrade software Offer other services such as credit control, management reporting, bookkeeping etc Speed up the year end process The Future Many think that cloud computing is the future with HMRC and the suggested Digital Dashboard very much supporting this view. So rather than questioning whether you should use cloud computing or not, the question may very well become “will you have a business if you don’t use the cloud?” Having over 20 years of accounting and IT experience, in 2007 Elaine Clark (MAAT) gave up her blue chip past to launch CheapAccounting.co.uk. In 2009 Elaine capitalised on the rapid growth of the brand and developed the franchise arm of the business recruiting qualified accountants as franchisees to service the ever growing client base. Elaine Clark is the Managing Director of CheapAccounting.co.uk.