Whats driving the rapid adoption of cloud accounting systems?
Today, as the role of finance becomes ever more strategic, there is a significant and growing demand to improve the department’s ability to provide information and insight to the wider organisation.
Running outdated and disparate on-premise accounting systems, largely dependent on manual processes, make it difficult for finance professionals to rise to the challenge of managing and analysing their financial data.
In fact, a recent survey by Deloitte found that only 40% of finance departments felt positively about their ability to provide information in ways that reveal relevant insights and facilitate better decision-making.
To cope with this change modern finance functions are adopting new and emerging technologies to meet demand.
With the benefits of cloud computing well established, scepticism about data privacy and security has now given way to the rapid adoption of cloud accounting systems due to their lower ownership costs and more rapidly realised benefits.
In fact, according to a study by Longitude Research, 24% of finance departments have already implemented a cloud accounting system, and a further 45% are planning to do so in the next 12 months.
Furthermore, the total cost of ownership of a cloud accounting system is considered to be 50% less than that of an on-premise system.
With lower total costs, return on investment (ROI) can often exceed triple-digit percentages, while payback timing is typically a fraction of on-premise, averaging only 3-6 months according to a recent study.
Whats makes Cloud Accounting systems different?
Cloud Accounting Systems
Hosted externally by the vendor and provided to you as a service – hence the term Software as a Service (SaaS).
- Procured via OpEx budget.
- Monthly subscription model.
- Local IT infrastructure needs reduced.
- Local IT support and administration needs reduced.
- Data and system moved offsite.
- Upgrades managed by vendor.
- Systems and processes are more standardised.
- With cloud deployments the software, and financial data within, are managed centrally by the vendor and accessed by you via the web.
Installed locally on your servers and then managed and supported by your own IT staff.
- Procured via CapEx budget.
- Perpetual licence model.
- Requires local IT infrastructure.
- Requires internal IT support and administration.
- Data and system are local.
- Requires self-managed upgrades.
- Requires local management of integrations to other applications.
- Systems and processes are evolving and complex.
- Requires local licencing of supporting software.
10 Key Factors Driving Rapid Cloud Accounting Systems Adoption: