When it comes to accounting firms, many rely on older ways of working.
Things like Excel spreadsheets, classic bookkeeping methods and developing a client base purely from referrals rather than wider marketing.
Certainly, back in the day, this was a perfectly reasonable way of doing business – but is it outdated now?
Do those firms who truly embrace technology succeed where those with antiquated methods fail?
Or does it make little difference? Does a firm rise and fall based on other factors completely unrelated to it’s integrations and whether or not it’s in the cloud?
That’s the question that we’ve been thinking about recently and we think you’ll find our analysis interesting…
The difference between firms
Firstly, let’s take a look at the differences between firms.
How many have used tech to their advantage and how many are stuck in the past?
The statistics differ here, but most data suggests that around 60 per cent of accountants are using cloud-based systems. *
The fact that only 60 per cent of accountants have adopted cloud-based systems highlights a significant divide in the profession.
Arguably, the gap can be attributed to legacy systems and a general resistance to change.
Smaller firms, in particular, may find the perceived costs and complexity of transitioning to the cloud a deterrent, while others may think they lack the resources to prioritise such a shift.
We disagree with this perspective – great technology is available for relatively low costs nowadays – but it still persists.
Additionally, for some, a lack of understanding of the benefits, such as real-time access and collaboration, can prevent them from making the leap.
However, for the 60 per cent who have adopted cloud-based systems, the advantages are clear.
Client demand, competitive pressures, and regulatory drivers like Making Tax Digital have all contributed to the uptake.
The pandemic also played a key role, forcing many firms to adapt quickly to remote working and digital solutions.
But do the firms who’ve adopted technology have an advantage? That’s the question you’re really interested in, right?
Are cloud-based accountants better off?
A 2024 Wolters Kluwer survey found that “accounting firms employing cloud-based technology solutions experience higher levels of growth” and, although this is an American-focused research paper, the results are reflected in the UK too.
In May 2024, Thomson Reuters said that:
“Owners and partners of accounting and audit firms should, at least, be considering cloud-based technology as part of their broader strategies. Those who fail to do so risk losing their competitive edge.”
Given the benefits to be gained — such as improved efficiencies, the ability for staff to work remotely, and reduced IT, hardware, and upgrade costs — it is no surprise that cloud adoption is taking hold.”
It’s widely accepted within the industry, that cloud-based accountants are better positioned for success.
We think that firms embracing cloud technology not only experience tangible benefits like cost savings and operational efficiency but also gain a strategic edge in adapting to modern client demands.
Why are technological firms better off?
The advantages of integrating technology, particularly information-gathering tools, go much deeper than just staying up to date with current trends.
Here’s how firms leveraging these tools are positioning themselves for success:
- Enhanced collaboration: Real-time access to data through cloud-based allows teams to work together seamlessly, regardless of location. This is particularly important for firms with remote or hybrid working arrangements, ensuring everyone stays on the same page.
- Attracting top talent: Tech-savvy professionals are increasingly seeking firms that use advanced tools to streamline workflows. A commitment to technology not only helps attract skilled employees but also improves staff retention by reducing repetitive, manual tasks and creating a more dynamic working environment.
- Improved client experience: Clients today expect fast, accurate, and transparent service. Information-gathering technology enables firms to provide instant insights, detailed reports, and proactive advice based on real-time data. This builds trust and strengthens client relationships.
- Scalability and efficiency: Automation and integration eliminate inefficiencies, freeing up time to focus on value-added activities like strategic advisory services. Firms using cloud-based technology can scale operations without the growing pains often associated with expansion, such as hiring additional staff or investing in costly infrastructure.
- Regulatory compliance: Tools designed for real-time data gathering and management make it easier to comply with ever-changing regulations. Features like automated record-keeping, secure data storage, and audit trails simplify compliance processes and reduce risk.
- Data-driven insights: The ability to collect and analyse vast amounts of information allows firms to identify trends, forecast financial outcomes, and make informed decisions. This proactive approach can be a game-changer, giving firms an edge over competitors still relying on outdated methods.
- Cost savings: Contrary to the perception that technology is expensive, many solutions are cost-effective and can significantly reduce overheads. For example, cloud-based systems eliminate the need for on-site servers, reduce IT maintenance costs, and minimise downtime during upgrades.
- Future-proofing the business: As the industry continues to evolve, adopting advanced tools ensures firms remain adaptable. Whether it’s responding to new regulations, offering emerging services like ESG reporting, or meeting the demands of tech-literate clients, technological integration positions firms as forward-thinking leaders.
Client information-gathering technology reduces human error, streamlines processes, and provides actionable insights in real-time.
To integrate information-gathering technology into your firm, start by identifying areas where it can add the most value, such as improving data accuracy or streamlining compliance processes.
Choose scalable, cloud-based tools that align with your goals, invest in training your team, and ensure they integrate smoothly with your current systems to maximise efficiency and results.
A great place to start is with Glasscubes!
References:
*How The UK’s Business Industry Factors Cloud Computing into Their Accounting Practices: https://libeo.io/en/blog/accounting/uk-cloud-accounting and 59 per cent of accountants have joined the cloud – Are you being left behind?: https://www.accountingweb.co.uk/community/industry-insights/59-per-cent-of-accountants-have-joined-the-cloud-are-you-being-left
