The cloud is synonymous with technology, with streamlined storage and multi-media offerings.
For back office functions, too, the cloud holds promise in digitalizing what has been manual, and what is critical to businesses of all sizes, especially smaller ones looking to grow.
Lack of efficiency can have its perils, especially for younger companies: CB Insights has said that, in examining more than 100 startups, “post mortem” 29 percent stated that running out of cash had been a chief reason for failure. To that end, leaner processes are critical, especially when it comes to cash coming in and out the proverbial doors.
Acuity announced late last month the debut of a new cloud service offering, which helps to create what is being billed as a “team of cloud accounting specialists” and which builds off already existing relationships with Apple, Google and Xero.
In an interview with PYMNTS, Kenji Kuramoto, CEO and founder of Acuity, an accounting service for early and growth stage tech firms, stated that roughly 15 percent of smaller accounting firms have embraced the cloud, which speaks to some disconnect in technology.
“It can be hard to pin down” what lies behind this bifurcation, said the executive, who posited that accounting firms, and the people who staff them may “tend to be a bit risk averse” and “rely on traditional mechanisms” when it comes to running a business.
Traditional processes, of course, include paper based files, and communications, and less than optimal efficiencies that come right alongside those conduits.
He noted that SME accounting firms (themselves smaller businesses) may in fact find a prod in moving to the cloud from their clients, who have in their own business build-outs been embracing everything from new servers to Gmail, and in the process have become aware of new ways to do old tasks. The scrutiny of what technologies and in place, and the manual handoff of everything from 1099 forms to sales receipts to employee-related documents may bring these clients to look at the way they do accounting in house, or how they do it through outsourced relationships. They may not in fact want to spend time on the bookkeeping function, or other functions offered through cloud suites including Acuity such as payroll.
Such investment in the cloud, said Kuramoto, comes when the SME is focused “more on just headcount” and has a profile where they have been in business for more than a year. The company is transitioning into a stage where accounting and back office functions become complicated.
Expansion beyond the confines of a local business also brings challenges, especially with sales made in different jurisdictions, or supply chain relationships similarly far flung (governing traditional B2B interactions), and where tax implications can differ. And here, Kuramoto told PYMNTS, is where accountants can add value, and grow along with their clients (and simultaneously scale into the cloud). “This has led to an ecosystem of cloud accounting tools,” he noted, with efforts to shorten the time that invoices and payments and record keeping wend their way across parties.
The value proposition is there, and as noted separately last month 93 percent of a Xero “state of accounts” report found that 93 percent of SME accountants surveyed said they could add value to existing client relationships by turning attention away from automated tasks.
“The cloud allows for no limits,” said Kuramoto to PYMNTS, in terms of generating reports and sharing them between vendors and customers and across back end functions – saving money, but also, of equal or even greater value, time.