Technology is transforming the business world at an ever-increasing pace. One technology that has had a bigger impact than most is Cloud computing. It’s a tool that is no longer a “nice to have”, it’s now a “must have”. Especially at a time when businesses must operate efficiently to cut costs and keep up with competitors.
Cloud accounting software, for example, allows businesses to access, store, and manage financial data via the internet, which ultimately allows them to save time/money and boost overall profitability.
In this article, we’ll look at the importance of Cloud technology specifically for finance teams, how it’s a more cost-effective option, and why it’s beneficial from a compliance perspective too.
Why is Cloud technology important for finance?
Even if there are still some finance teams who are yet to move across to the Cloud, it seems inevitable that eventually, all will embrace this shift, whether it’s due to financial necessity, market demand, or some new legislation that enforces it.
And those within the industry are well aware of this necessity too. Our annual Finance Trends Report found that 43% of finance professionals are looking to adopt Cloud financial management technology in the next 12 months. And 50% agreed that adopting new technology in the past 12 months had enabled their business to operate more effectively.
So, this innovation isn’t a surprising or new development, and most understand its importance for their continued success. One challenge CFOs face is choosing the right software when there are so many options on the market. However, by at least getting the wheels in motion, they can look to quickly avoid the risks associated with using outdated software.
Cloud technology allows finance teams to access data from anywhere, at any time, and on any device. This means they always have an eye on current financial performance and can have a real-time impact on overall business strategy. This is essential today given that the CFO’s role has evolved to be more of a strategic advisor to the CEO.
How can Cloud technology help reduce implementation costs?
One of the biggest challenges businesses face when adding new technology is the cost of implementation. This may be an element that dissuades leaders from embracing the Cloud. However, it is the traditional on-premise solutions that are far more cost-heavy, as they require a significant upfront investment in hardware, installation, and maintenance.
Cloud technology, on the other hand, is far more manageable and cost-effective, as it is purchased as a remote service, meaning there is no need for investment in onsite hardware infrastructure. It is a far more scalable approach too, as nothing needs to change physically when the business requires more capacity.
And aspects like support and upgrades can be applied remotely, rather than having to pay for someone to travel to your location. Businesses don’t need to pay for a large team of in-house IT experts, as all maintenance is carried out by the provider at off-site servers.
Here are some more of the specific ways implementation costs are reduced thanks to the Cloud:
Savings on capital
The Cloud helps to reduce capital expenses. If you run your own servers, you'll incur capital costs right from the start, because establishing and maintaining an IT infrastructure is expensive.
Traditional IT infrastructure requires power, cables, servers, storage drives, firewalls, cooling equipment, networking gear, and load balancers. In addition, IT personnel must oversee all these elements.
Companies can expect to save money on capital expenditures when using Cloud software solutions for business-critical applications. And this saved money can be invested in further innovation that drives growth.
Cost-effective operations
It takes a team of people, unending server glitches, and expensive updates to run an on-premise infrastructure. Those who run a traditional data warehouse are likely familiar with the necessary responsibilities which include the maintenance of:
- Hardware
- Software
- Networks
- Security
- Disaster recovery
Then there are the salaries/bonuses associated with employing knowledgeable and experienced IT professionals. Migrating to the Cloud represents a far cheaper option than executing all these tasks in-house.
You can still have some Cloud experts internally if you wish to get the most out of the system. But with the reduced IT team, you can deploy your talented employees elsewhere in the business and focus on what really matters to you.
Fully utilised hardware
The advantages of Cloud computing come from its ability to provide virtual services at scale. Cloud-based services don't require the purchase of expensive physical equipment. Instead, Cloud migration makes full use of hardware.
Traditionally, hardware was designed to store data at maximum capacity, resulting in expensive infrastructure you don't necessarily need. With the Cloud, no resources are wasted. As a result, your business can scale up and down seamlessly in response to its changing computing needs.
There are several service models related to Cloud computing, including Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS). The use of these types of services can help users to significantly reduce their hardware costs, which would otherwise add up over time.
Reduced power costs
Traditional data centres require a significant amount of energy. Instead of storing data on-site, moving to the Cloud can reduce your carbon footprint as well as reduce your power costs.
In most cases, if you operate your own data centre, your servers will not be fully utilised, meaning they are often idle. Because idle servers are eliminated, you'll pay less for energy consumed when you use a Cloud service. This gives businesses the added benefit of being greener while simultaneously reducing their energy bills.
How do Cloud computing solutions benefit compliance?
No need to monitor regulations manually
Financial governance and compliance are often met with a deep sigh and, in some cases, dread. With new regulations emerging all the time, it can be near impossible for finance teams to stay up to date with all these manually. With the Cloud, this is no longer an issue, as Cloud providers will incorporate legislative considerations as part of their ongoing software updates.
Most legislations that impact finance teams tend to relate to tax filing, data protection, and financial reporting. Some of the most well-known ones in recent times have included Making Tax Digital, GDPR, SORP, SoFA, and UK SOX. Thankfully, the maintenance of these can be automated with many now using Cloud accounting software to improve their compliance obligations.
Avoid financial penalties
By automating this process, the finance function can avoid hefty fines related to non-compliance. The business ultimately becomes more agile from a regulatory perspective amidst the fast-moving legislative landscape. And the finance team has more peace of mind, freeing up their time to focus on core processes, and ensuring not as much of their budget is assigned to compliance matters.
Improved cyber-security
With the Cloud, data is stored on an offsite server, making it far less prone to any physical threats. The provider takes on the burden of protecting and backing up this data. They’re also tasked with staying ahead of the ever-increasing sophistication among cybercriminals, which they have the expertise to fulfil. With these measures in place, any associated stakeholders can be confident that sensitive financial data is not only compliant, but secure too.
Other benefits of implementing Cloud computing
Better audit trail
Cloud accounting systems offer better visibility, as everything finance-related is recorded digitally, with a clear footprint of who has done what. This makes it easier to root out any fraudulent behaviour internally, while also being able to identify the culprit if non-compliance has occurred.
Greater risk management
This technology facilitates greater business insights too. With more in-depth reporting and analytics capabilities, businesses can source more detailed insights around financial performance that are fuelled by a higher quality of data. These insights will often uncover both risks and opportunities that can then be managed accordingly.
Enhanced communication
Not only does Cloud innovation increase visibility within the finance team, but it also boosts transparency across the organisation. With a unified finance system that easily integrates with other platforms, separate departments can collaborate more seamlessly. They can access the same data regardless of their location or function, making it easier to communicate, while also ensuring best practices and standardisation can be achieved in relation to compliance/security.
Reap the benefits of Cloud technology
With perks such as lower costs, more time, greater efficiency, improved compliance, enhanced cohesion, increased security, and better data insights, it’s clear that the benefits of Cloud technology are impossible to ignore.
Finance leaders may already have their team on a journey of digital transformation without necessarily knowing the exact direction they’re going in. Cloud computing, particularly in finance, is a sure-fire way to future-proof your capabilities and stay on the cutting-edge of industry trends.
At OneAdvanced, we provide a Cloud-based accounting solution called OneAdvanced Financials. Such financial management systems give you:
- Reassurance that your data is protected from cyber threats
- Instant access to financial data from anywhere at anytime
- Real-time reporting with countless customisable reports built-in
- Automation of previously manual tasks, minimising human error, while saving time, money, and energy
- Compliance maintained automatically with software updates
Nugent Care, the largest education, health, and social care charity in Liverpool adopted OneAdvanced Financials with the drive to save time for their finance department.
“We were introduced to Financials by our account manager at OneAdvanced and were impressed by how user-friendly the solution was. The product fits with our Cloud-first strategy and we love that it is a Software-as-a-Service model. Once we delved into the solution, we could see that it absolutely hit the spot and is exactly what we need. We love it. From the price to the support and the scalability of the solution, we could see it was perfect for us.” - Julia Shaw, Head of Finance at Nugent Care
Nugent Care put the fun back into finance with OneAdvanced Financials and MyWorkplace