Cloud Computing, online software, and SaaS (software as a service) are just some of the buzz words for a variety of emerging trends for accessing and using software, and transferring and storing data that you may have heard about recently. However, what you may not have realised is that rather than just another technological development, this is a disruptive technology which is destined to change the way we do things forever (think trains in the 19th Century), and (like spreadsheets before it) is about to become an essential tool for FDs and accountants. Now then, is that ideal time to start finding out about and understanding what it can do for you and your company, so that you’ll be ready to reap the benefits at the earliest opportunity.
Cloud Computing, the umbrella term for online initiatives, and managing and accessing information via the internet has recently gained mainstream credibility with announcements from Microsoft that it is going to offer an online version of its flagship product, Office, and that it is to partner with Yahoo in order to compete with wholly online rival, Google, and Google itself has announced the launch of its very own online operating system. Plus some of the other big software companies are jostling to jump on the Cloud bandwagon by launching their own Cloud Platforms that developers can use to create new software and applications that will easily integrate with each other and hopefully become the accepted way of doing things.
The good news is, however, that accounting and CRM software is at the forefront of the Cloud Revolution and is one of the driving forces behind it. We already have the inherent need to share accounting information and track sales data to thank for the development of the PC and the fore mentioned spreadsheets, and online accounting and CRM systems are the next technological innovation that not only brings incredible advances in access and flexibility, but huge cost and time-saving advantages coupled with levels of integration, automation and security that would normally be out of reach for all but the largest multi-nationals with unlimited IT budgets. And because accounting and sales needs are at the heart of the Cloud, the online accounting and CRM packages that are out there are more mature and further along the development curve than some of the other online initiatives that are emerging: For example, Salesforce.com has been around for 10 years in the US and is a public listed company, Liquid Accounts, the current Best Web-Hosted Accounting Software, in the UK has been going for 5 years, and can offer functionality that can rival Sage 200 or Sage 500 and has a number of large corporations and multi-nationals amongst its clients. Plus companies like Xero in New Zealand and E-conomic in Scandinavia are becoming the norm in their respective countries and have both floated.
All of this means that rather than just offering a basic online cashbook, as you might assume, you can now find online packages that can offer you:
These features, together with the online advantages of:
can create a number of direct cost-savings and time-savings for mid-size companies and large enterprises because there’s :
Star Supply Renewables is a Swiss-based biofuels broker that negotiates between small farmers and producers (many in small developing countries) all over the world and the large oil companies. Theirs is a new, niche, and as yet fairly unstable industry that means that so far, they have grown very quickly and made substantial profits in a small space of time, but because they’re reliant on changing government policy and fluctuating oil markets, they need to have good financial information instantly to hand to stay one step ahead. They are currently planning to expand further and open offices in the US and South America, and therefore needed a fairly substantial accounting package to cope with all this. In particular then, FD, Stefan Rask was looking for something that:
Traditionally Stefan would have had to buy a bespoke high-end, high-cost system that would have taken several months to design and implement, however, instead he decided to take a look at the newer, more flexible and cost-effective web-based packages to see if there was anything on the market that would suit his needs. He started by doing some research on the internet and looking at recent awards, reviews and any packages that had a free demo or download available.
He discovered that many of the online systems were very simple and had huge limitations, but was pleasantly surprised that there were a number that appeared to satisfy his needs. He managed to narrow it down to a choice of 2 providers, one in the UK and one in the Netherlands and contacted both of them to discuss his requirements. Neither package offered Swiss accounting as standard but could be customised, the main difference being that the Dutch one would have to be modified for him, whereas he could change the British package himself. For this reason, and because of the level of customer service he’d received, Stefan chose the UK-based package.
‘I needed something that I could configure in a week or two, but in fact it took 3 days to get it as I wanted it! And I’d got something immediate and so flexible that I can change as I go along!’
‘I started using it for just doing invoices and chasing money and then was working on it all day! We’re pretty dependent on it already – it tells us when we need to send money out and when we need to get money in.’
One of the main problems Stefan had traditionally was the length of time it took to get regular management accounts from his accountant, and a lack of instantly available business information for their fast moving business.
‘It is helping us enormously. At the end of every month we have an accounting statement for the month that we know is at least 95% correct. If we didn’t have it we’d be using Excel spreadsheets to keep track of everything but that’s unacceptable for a company with this many employees – you can’t run a business like that!’
‘At the end of the day, we’ll always use an accountant, but Liquid will maybe help us to reduce his fee and our accountant takes forever to do anything, but now we’ve got up-to-date information every day and I can even do it from home.’
He’s also seen huge advantages from a cost and security point of view. They have 1 server in their office that’s maintained by an external company and have been advised that they need an upgrade. They have no way of backing-up any vital information and are at risk of losing everything in the event of the server failing, or fire, theft or flood. However, by going online they now know that their accounting information is backed-up several times a day to several secure, bomb and fire-proof, climate-controlled, up-to-date, maintained sites.
‘We don’t know much about IT. A local company comes in and does that for us. They say that we need another server which will cost us $12000. And it will go wrong one day and then we’ll be in the shit! So from that point of view, it’s hugely valuable because it’s a reasonable cost every month and we feel we’re getting value for money, and our directors are happy with that, and wouldn’t be happy with paying out for a new server!’
Stefan’s next challenge is to open 2 offices in the States and 1 in South America, and replicate the systems that they are using in their Head Office in Geneva, which will be much easier to do because they’re using an online accounting system. Stefan plans to buy desks, phones and computers and have an internet connection installed and have them up and running instantly:
‘It would be a nightmare if we had to do another implementation and have servers etc. This way I don’t even have to go there. It’s no hassle! And because it’s all hosted I can see what they’re doing from Switzerland and can even do the accounting for them to begin with.’
‘It’s tremendous value – in fact, if anything, it’s probably too cheap! I would expect a package with this sort of functionality to cost at least $100 per user and we’d be happy to pay $2-300 per month for 2 full users, and the 2 other girls who occasionally have to access the information as well.’
Matt Holmes is Chair of the BASDA Special Interest Group on Cloud Computing and the MD of UK online accounting pioneer, Liquid Accounts Ltd. He has been working on online initiatives with Companies House, HMRC and private industry for the past 8 years.