There is no doubt that the switch to cloud accounting will continue at an unprecedented rate in 2022. We are seeing a mass exodus from on-premises software. We saw the trend unfolding in the mid-twenty-teens but the boom seemed to occur in 2020. CFOs and controllers that didn’t see the benefit of the cloud do now. We don’t have conversations about whether they will move to the cloud, but how soon they can move to the cloud. The rapid change is being driven by AI, automation, distributed workforce, and the ease of interacting with their CPAs and advisors.
The Deciding Factors
Artificial Intelligence/Machine Learning is providing customers with more than information, it provides answers. Marc Linden, Sage EVP and GM of Medium Segment Native Cloud Solutions said it best, “We’re quickly moving from the Age of Information to an Age of Answers. From embedding machine-learning and artificial intelligence capabilities directly into our general ledger to streamlining the process of gaining actionable, real-time insights across the business, we’re helping our customers break through the clutter and accelerate their success.” AI will reduce errors and direct our customers to see the information they may have overlooked or had difficulty finding in the past. The information will be pushed to them in real-time to make decisions.
Cloud accounting systems provide customers with automation they didn’t have previously. Accounts Payable is just one place that has been automated. Customers are able to define workflows, approvals, and set up controls. Using a cloud system allows more visibility and access to employees from approvals which speeds up the process. When transitioning to the cloud our customers are able to look at the current process and use modern tools to reevaluate and change the internal processes. New automation in Accounts Receivable helps to drive down the collection process through workflow emails, invoices, and subscription management.
The Flexibility Factor
Going into 2022 we will continue to see a large remote workforce. According to Gartner 32% of employees worldwide will be remote by the end of 2021 up from 17% in 2019. We see this trend continuing if not growing. In another recent survey, 52% of men and 60% of women will quit if they are not allowed to continue to work remotely. For this to continue companies will have to have their systems in the cloud, including their accounting systems.
The CPAs I work with are on board as well. They have found they are able to interact with their clients on a real-time basis because they now have access to the information when the client asks or needs it. The days of having to send files back and forth are gone. Now they can log in and view the data to provide feedback rapidly. This also allows CPAs to provide more services to their clients including outsourced bookkeeping. The client and CPA work hand in hand without having delays.
I see the switch to cloud accounting accelerating through 2022 and beyond.
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