There are many well known advantages to working in the Cloud - not least, the flexibility of anytime,anywhere working.
One of the least discussed aspects, however, is the ability to connect to and import from – or export to – other software applications, whether cloud based or desktop based. This enables automatic transfer of information between packages such as databases, accounts software and other systems.
This is done using the programme’s API (for the technical this stands for Application Programming Interface) – which is basically the language that enables different packages to talk to eachother. e-conomic has a very flexible API interface which enables communication to a wide variety of different applications.
In a seminar that I gave recently, I explained how my accounting practice used e-conomicwith virtually all of our clients to prepare monthly management accounts, VAT returns and outsourcing functions. However, when it came to annual statutory accounts production, I looked for a package that I could use which would allow an easy transfer of information from e-conomic.
I chose Caseware which through the API of both packages allows me to work with our clients using all the benefits of the Cloud - all entries are recorded in e-conomic including the normal accounts finalisation adjustments such as Directors bonuses, dividends and tax provisions. At the point when the Trial Balance has been finalised, I can then switch to Caseware, which is hosted on Hosted Desktop, and literally at the touch of a button, I can import the Trial Balance (or if required, the entries) into Caseware and complete the statutory accounts in an a time efficient and cost effective manner.
Many users of e-conomic who are in the fashion industry tend to use an industry specific system such as Zedonk for organising their production schedules, styles and stock call off etc. Sales invoices raised in Zedonk are automatically recorded in e-conomic thus avoiding duplication and ensuring synchronisation between both systems.
There are many examples of working with the API and maximising the benefits of working in the Cloud.
UK Tax – Double standards?
The recent announcement of the death of Prince Rupert Ludwig Ferdinand zu Loewenstein -Wertheim-Freudenverg would normally be of passing interest. However, apart from a fabulous name and title, Prince Rupert’s main claim to fame was that he was the brains behind the Rolling Stone’s tax strategies which resulted in them not only leaving the UK and becoming non resident but postponing one of their most successful concerts until they were safely non resident and thus considerably reducing their UK tax bill.
In 2004-05 the three remaining founder members of the group paid just 1.6 per cent of a combined income of £81.3 million in tax.
Not much appears to have been said about this – Sir Mick Jagger is revered as one of the most significant pop icons of our time and the ageing rockers are as popular now as ever.
Fast forward to today and Gary Barlow OBE, on the other hand, is reviled in equal measure for participating in a tax planning scheme with the aim of substantially reducing his UK tax bill. In his case, the legitimacy of the scheme has been rejected by the High Court and Gary Barlow, along with many other personalities, will have to repay substantial amounts of income tax.
There have been howls of condemnation for this and calls from the great unwashed for Barlow to return his OBE – which was awarded for his considerable work for UK charities.
The issue goes further – Amazon, Starbucks and Google, amongst others, have been roundly condemned for their perfectly legitimate tax planning strategies which has minimised their Corporation Tax liabilities. The fact that they employ thousands, and pay a small fortune in Employers National Insurance is rather glossed over.
The question of successful tax planning has, rather worryingly, moved into a moral dimension rather than a purely legal one. The country has been through the worst recession and financial crisis in living memory and, the argument goes, everyone should pay their fair share of tax.
But what is a fair share? It has long been an established principle that no one is obliged to arrange their affairs so that they pay the maximum amount of tax. If there are legitimate ways of reducing a tax liability it has been sensible to adopt them.
Is it still acceptable to pay a large contribution into a pension plan to reduce your current year tax liability. How about a company director taking some of his remuneration as dividends instead of salary to reduce the overall tax bill.
Where do you draw the line between what is normal practice and ok and what is morally unacceptable. Is it just a question of amount – saving tax of £10,000 is alright but £10,000,000 is not.
Morality ,surely, is subjective. If the Government of the day is against all forms of tax avoidance then it should legislate accordingly
But of course, there is a perfectly good reason why they don’t. The afore – mentioned companies and many more like them, contribute far more overall to the UK economy than they save in Corporation Tax. Why kill the Goose that lays the Golden Egg?
Technology – ignore it at your peril
At an international conference of accountants recently I was told the following story:
“A partner in a top twenty firm of accountants had a meeting with a prospective new client. After the usual pleasantries had been exchanged, the partner opened his notepad – removed the top of his fountain pen and sat poised ready to take notes of the meeting. The client looked at him aghast – ‘If this is the way you still take notes’, he said, ‘you are not the accountants for me!’ And with that he got up and left.”
Now the story may be apocryphal, and, if true, the client’s attitude was extreme, even for me who embraces technology in all its forms. But it does make a valid point.
Technology is very much a major part of our lives and as professionals in practice we have to be aware that it is also a major part of the lives of prospective clients. Our willingness to adopt technology shows that as professionals we can keep up to date and make use of new ideas to enhance and improve our processes and add value to the services that we provide our clients.
It says a lot about the way we operate and the way we view business processes as a whole. It recognises the fact that today’s entrepreneurs use Twitter, Facebook and the Cloud as an extension to their right arm and expect their professional advisors to have the same views.
It is for this reason that using the Cloud as a major part of the IT infrastructure makes the statement that a practice is operating in 2012 – not 1812 – and is well placed to deal with the demands of today.
And the growth of technology is inbred from a very early age. Someone told me the other day that their three year old, when looking at a book (yes – a real book!), turns the pages by making a touch and flick motion as if turning the electronic pages on an iPad.
Scary – maybe – but an example as to how technology is inbred in us from the start.
And for those who are still reluctant about change, the following quote from Charles Darwin sort of sums it up:
“It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change.”
The Cloud is here – whether you like it or not
For those who are regular followers of my blogs, my passion for all things cloud will be well known. I have been writing for some time about how the Cloud is the way to interact with your clients and that accountants need to get on board or loose out.
I had the opportunity the other other day to speak at an Intellect seminar (thank you to David Terrar for inviting me. The subject matter was introducing Cloud to beginners so to speak and yet in listening to the various presentations as well as making my own I can’t get away from the obvious thought – why wouldn’t any one use it.
The other day my attention was drawn to a blog from Rob Nixon – www.robnixon.com. He has written a piece entitled Cloud – friend or foe and I make no apologies for quoting from it below. The points he makes, make so much sense that it should be a mantra for all things Cloud related.
“Cloud accounting – friend or foe?”
………..First of all some facts:
The cloud accounting (or the original term is SaaS – ‘software as a service’) has been around for a long time. The technology has been available for at least 10 years.
Cloud accounting is where your (or your clients) data is stored on the internet (instead of a PC or server) so they can access it easily and efficiently.
As of today there are approximately 3-4% of small / medium sized businesses who use an internet (cloud) based accounting system.
The early adopters (the cool ones) have jumped on it and enjoy the simplicity and innovative approach to it.
Many of the late majority users will be currently concerned about security issues. They are the same ones that were concerned about internet banking security concerns and now they probably use some form of internet banking.
Every single accounting software maker (who started as a CD/Server/Hard drive system) are spending bongo bucks (technical term) to get ‘cloud ready’. In fact I know (from the horse’s mouth) that one prominent supplier is spending in the vicinity of $100M to get ready.
Around the world there are gazillions of dollars being poured into any sort of internet based computing systems. The venture capitalists and financial markets are backing this space.
Cloud accounting systems will not fix every issue you have with your clients ‘cleanliness of data’ – if they input incorrectly then you’ll get a mess like you do now. Muck in – muck out.
It is reported by the software vendors that at the accountants end you will have an efficiency gain of anything from 10% – 40% when your clients are using an internet based accounting systems. That means 10% – 40% less time on the same job.
When a client has their data on the internet it is easier to transport the data from one accounting firm or accounting software supplier to another. Click of a button.
Every week we are hearing of clients who have switched accounting firms because the other firm did not offer an internet based accounting system.
And the final fact:
12. This is going to happen whether you like it or not! “
Now there is nothing new in any of the above but the points made cannot, in my humble opinion, be overstated or reiterated too often. For those who get it, it is just common sense …..for those who don’t, well wake up!
And I finish by making the following stement to those accountants who have not yet got the message:
If you are not using the Cloud to service your clients – you are not servicing your clients.
The Cloud has moved on……catch up!
When I first started writing and commenting on the cloud, the main focus was that here was a groundbreaking technology that, apart from other things, would add value to Accountants and the services they would be able to offer their clients. Those who were early adopters would, figuratively, sieze the high ground and gain the business advantage that would naturally ensue.
I gave numerous examples of how adopting Cloud systems such as E-conomic had helped to win new business and was providing a quantifiable advantage in the way business was done and services delivered. I explained how startups could benefit from Cloud adoption due to the low set up costs and how new international business could be gained and managed. I clarified, hopefully, the mis-conceptions regarding security and how Cloud is, in fact, more secure than most business configurations are currently.
Two years on, how much has changed?
Well, we are certainly past the early adopters stages in the technology adoption lifecycle:
…and are well into the early majority peak. And for those who have not yet got on board, they will continue to lag behind and eventually become part of the late majority or the laggards. Will they miss out on business opportunities….most certainly. Will they be able to catch up … possibly…eventually.
But as with most innovative technologies the goal posts have moved somewhat. I am convinced that in order to stay well ahead of the game, accountants are now going to have to change the way that cloud services are offerred.
Why do I say this? Well it is interesting to see how the the cloud providers have positioned themselves in the market place. Although there are numerous providers, the ones that appear to have gained most traction have, possibly by natural selection, have gained ground in various sections of the business world. Kashflow, for example, is doing well with the sole trader, one man business operation. Xero has got the smaller business sector well covered and E-conomic has established itself in the medium to larger business sector as well as the franchise market.
How are Accountants to adapt to this. Well one of the advantages of Cloud as I have repeatedly stated is that the costs of adoption are low … pay as you go is a very cost efficient concept. So how is this for an idea…
Accountants should set up a separate Cloud team with three or four (or more as required) staff who are dedicated to working with Cloud technologies. They should become expert in a number of the main offerings – not just one – so that when new businesses, who are already Cloud users, come to them , they will be able to service them in a truly encompassing manner.
It is an innovative approach… but to the brave, the rewards.
Was 2011 the Year of the Cloud?
Towards the end of last year I stated that 2011 would be the Year of the Cloud and as we hurtle headlong into 2012 (I am convinced the Government have cancelled a few months as part of their cost cutting exercise!), I thought it worthwhile to look back and see if I have changed my view.
Whatever my conclusion, from a Cloud aspect it was certainly an eventful year.
Personally, I have travelled half way round the world attending and speaking at various international conferences about the Cloud and Cloud accounting where the topic has been received with huge interest. I have also been invited to visit numerous accounting firms in the UK where there has been noticeably increasing interest and a genuine desire for further input on the topic of which they have become far more aware.
In the accounting market place, the big news was the acquisition of Twinfield by Wolters Kluwer, the parent company of CCH. The market reacted to this was great excitement – at long last an established on premise player had seen the light and was making a big commitment to the Cloud – and with Iris taking an interest in Freeagent surely others would follow. It remains to be seen – but if nothing else it has certainly increased the level of awareness and interest.
On a wider arena, Apple released its latest operating system – IOS 5 and in so many ways this has crystallised the Cloud as the way of the future. Apple have practised what so many of us have preached – that computing should no longer be device specific but that the device, whatever it may be, should only be a tool to access information. Therefore, as now enabled by Apple, a photo taken with the Iphone will appear seamlessly on your Ipad and desktop. Music downloaded on your desktop is accessible on your Iphone and Ipad. From a more business orientated approach, reminders set up on one device will appear on all your other IOS5 enabled kit.
As has happened so many times before, Apple have made the concept their own but more importantly have brought it to the forefront of the public’s awareness – there are few people who have not now heard of the Cloud even if they might be unsure as to what it involves.
And what of the accountancy market as a whole. Always slow to react to changes in technology, they are, at long last, making themselves aware that the Cloud is something which they can no longer ignore and whilst still slow on the uptake, many more firms have started on the Cloud journey and are beginning to realise the advantages it brings. But just as they take those first few infantile steps and the Cloud enthusiasts among us look on as proud parents watching their child walk for the first time a further major attitude shift now presents itself and is bound to trip up a few of the less adventurous.
Adoption of the Cloud and in this instance Cloud accounting is being led by the client – not being pushed by the accountant. Clients and potential clients are going to their accountants having decided to use Xero, Kashflow or E-conomic or one of the many other products now available. If the profession wants the business they are going to have to evolve in a Darwinian survival of the fittest shift to not only accept and adopt the Cloud – but be prepared to work with more than one Cloud offering so that they can accomodate the every growing amount of choice that today’s entrepreneur has available.
So – was 2011 the Year of the Cloud? Most definitely and 2012 will prove it to become the defacto operating system.
Reflections on a conference – Beijing
As the HLB conference in Beijing draws to a close it is time to reflect on the events of the last few days. Apart from Beijing itself – more of which later – the conference itself has been a great success.
What has been apparent is the level of genuine interest in Cloud technology in general and online accounting in particular. The E-conomic stand has been busy over the three days and some very useful contacts made. Tejn Nielsen is going to have a busy time when he gets back following up on the enquiries that he has received.
What has been particularly gratifying as fars as I am concerned, is the level of interest from the UK – a marked change from conferences earlier in the year.
As I have commented previously, I predicted that 2011 would be the year of the cloud and Beijing has confirmed my view.
Reflections on Beijing – part 1
The first thing that struck me on arriving in Beijing was the sheer modernity of everything. Not what one thinks of when it comes to China. The airport is hi-tec and enormous as is the infrastructure that surrounds it.
This is enhanced on the drive into Beijing itself. The number of new skyscrapers is breathtaking as is their design. It really looks like something out of a science fiction film.
Our hotel is situated in the centre of the city on top of a luxury shopping centre selling everything from Bulgari to Rolex and everything in between. Fascinating how China has introduced the luxury of Western Globalisation without the inconvenience of introducing the democracy that would usually go with it.
Now I realise I am not seeing China is a whole but only a relatively small and incredibly wealthy part of it – but it is an eye opener just the same.
This afternoon includes a visit to the forbidden city which will be a whole new experience.
Reflections on a Conference
I have just returned from exhibiting with E-conomic at the 2020 annual conference in Birmingham where we spent the day on the E-conomic stand. I can’t believe that its a year since I commented on the last conference – time certainly flies when you are enjoying yourself!
Comparing the two conferences there were some marked differences as far as the Cloud in general and Cloud Accounting in particular are concerned. Firstly it must be said that all credit goes to 2020 for promoting the Cloud the way that they do and directing the delegates to the exhibition stands. The 2020 organisers certainly understand the benefits of the Cloud and how it can add value for their accountancy practices.
What struck me this year was how better informed were the accountancy practices – they didn’t necessarily sign up on the spot but all the visitors to the stand were, in the main, well informed about Cloud Accounting and were seeking information as to the distinguishing features of the various applications. And of course one of the noticeable aspects this year was how much choice there is for anyone seeking to move into the Cloud. As well as E-conomic there were 4 other cloud applications exhibiting at the conference and that doesn’t include the many other providers who weren’t there.
A number of enquiries were received from practices where they were already using a Cloud accounting product but wanted to expand their offerings - this all good news for the Cloud industry and accountants. The message is beginning to get through. As well as this, the new Accountants Club concept was well received.
In addition to speaking to the delegates, it was very interesting speaking to the other exhibitors. As well as comparing notes it was very helpful speaking to some other of the product providers who might be able to add some very useful features using E-conomic’s API integration – watch this space!
I forecast that 2011 would be the year of the Cloud and as we approach the last quarter of the year I am convinced that I was correct.
I am now off to Beijing to speak on the benefit of the Cloud at the HLB conference – I shall report on this when I get back.
Social Media for accountants – my take
At the recent Cloud Advocates seminar – Cloud Accounting for the 21st Century – debunking the myths one of the speakers was Mark Lee known to many in the social media sphere as an enthusiastic user of Twitter and consummate blogger. He gave an entertaining and perhaps slightly controversial presenatation on Social Media for Accountants and posed the question – does social media work for professionals? (my words).
The gist of his argument was that whilst many accountants now use social media, did they get any benefit from so doing. Apart from the overriding (and not unimportant) consideration that it is fun. (As Ben and Jerry say in their mission statement -” If it ain’t fun, don’t do it”). I must say that I found his argument somewhat surprising and I am not sure that I entirely agreed with all the points that he made.
As many professionals will agree, networking in its many forms is an essential component of business generation and over the years has become more popular and widespread. I have lately been travelling to a number of meetings of international associations – most recently Kreston International in Budapest – where I have spoken to accountants from all over the world about the Cloud and the benefits therefrom. These meetings are a great opportunity for the international firms to meet and network and the networking is probably more important in the long run than the actual conference sessions.
And in many respects is that not what social media is – another form of networking. Getting your name out to a wider world and expressing views and opinions which might not otherwise be heard. Importantly those who will be reading your comments etc are users of social media themselves and if they are looking for an accountant or professional advisor are possibly more likely to choose one that is social media savvy.
Social media is an excellent medium for getting your name and message heard – will it generate new business – well. like chicken soup, it won’t hurt.