The history of cloud accounting and future predictions
By Kevin Depper, Director of Online Services
Here at Hartley Fowler, we have made it our business to keep up-to-date with changing technologies. Providing our clients with the most efficient solutions is our driving force, and this includes cloud accounting.
When exploring the history of cloud accounting, it is important to look at the rise of cloud-based computing in general.
What is cloud-based accounting?
As a firm we have been very forward-thinking in our approach to cloud technology and we have been using a form of this since 2007. Each of our offices is connected to a central hub (our cloud) and we can all access the same data wherever we are in the world as long as we have an internet connection. We are also able to connect to these sources using our mobile phones and tablets which can prove very useful when out of the office. The firm is currently in the process of reviewing our next IT solution. This will no doubt involve greater use of cloud-based services to enable us to continue to support our clients in the best possible way.
The history of cloud accounting and Hartley Fowler
It is believed that the first cloud accounting software was NetLedger which is now known as NetSuite and this was launched in 1999 shortly before salesforce.com. These software packages were however aimed at larger organisations that had multiple offices around the world and by using cloud accounting technology this enabled them to work in each location on the same data.
Companies that provide cloud-based accounting software
Small businesses have mainly relied on desktop software with Sage 50 and QuickBooks desktop being the main packages used by the SME community. Surprisingly, QuickBooks Online was released in 2004 but was never really pushed by the company and the uptake was low in comparison to desktop. It is likely that, where customers had invested significant sums into their computer infrastructure, they chose to use this rather than the cloud-based accounting software for small business.
The other main cloud accounting software is Xero which was launched in New Zealand in 2006 .
Our introduction to cloud accounting solutions
We had our first interaction with cloud accounting software in 2013 when one of our clients decided to try Xero. Now I freely admit, when they came to me and said they were using the software I was sceptical about what it would produce for us to be able to prepare the company’s accounts for that year. I remember finding my way around this new system and it felt quite easy and intuitive. Soon after that we had clients that were getting fed up with using their desktop software and were asking about alternatives, so we suggested that they have a look at Xero and QuickBooks cloud accounting solutions.
Why cloud accounting is good for business
The government launched its Making Tax Digital initiative back in 2015. This has encouraged more businesses to look at cloud-based accounting software and accountants are now pushing these packages in preference to desktop solutions. As a firm we have significantly increased the number of our clients using cloud accounting software.
The emergence of cloud-based accounting software some years ago now, and the rate of innovation, can only mean good things for the businesses that use it:
- Cloud accounting software is built on open platforms which enables it to be integrated with almost any application, so long as the software can use an API to make the connection.
- Now that we have access to live accounting information, our clients are able to ask questions which we can answer quickly or immediately.
- Cloud accounting solutions save time and improve efficiencies
However, it is important for businesses to be able to use the software easily and accurately. Once company owners/managers get the right information, they can make decisions that ultimately benefit their business.
Future developments incloud accounting software
We are acutely aware that the fintech industry is going from strength to strength and cloud accounting innovation is continuous. At the time of writing, at Xerocon in November they announced that early in the New Year businesses will be able to send payments to their suppliers directly from the software using an add-on with Transferwise. I look forward to seeing how this works as this could prove to be a fantastic time saver for a lot of small businesses once they have set the system up. I’m sure that QuickBooks will follow suit and team up with a company so that their users are able to do the same.
Here at Hartley Fowler, we believe it is vital that we understand how these software packages work. We spend time training our staff to ensure that they are able to provide a high quality of service to our clients that use any software – be it cloud or desktop. We continue to look at the multitude of add-ons that are available to the cloud accounting software so that we can introduce the most suitable to our clients with a view to helping them utilise their data and make them more efficient.
Please click to find out more about our cloud accounting services or contact Kevin on or 01273 202311.
Disclaimer: [24th May 2023] The information in this blog was correct at the time of writing and is to be used as general guidance only. Please contact your local Hartley Fowler office for specific advice.