Why Your Firm Needs More Than Just the Cloud

Cloud has been the go-to platform for industries worldwide, and accounting has largely adopted it to introduce innovation, agility, and flexibility in its processes. However, the profession still needs to adopt other technologies, platforms, and services that integrate with the cloud to create a comprehensive accounting tech ecosystem.

From cybersecurity to analytics, this article will explore some of the more imperative solutions that accounting firms can’t (or should not) ignore.

Fully Managed Data Security

 It has been widely reported that accounting firms have been among the primary targets of cyberattacks due to the sensitive nature of the data they handle. Although every cloud provider deploys data security features to protect data, they work on a shared responsibility model. Hence, it is wise to outsource data security to a managed security service provider (MSSP).

Managed Security Service Providers (MSSPs) deliver a complete security framework with solutions such as vulnerability management, endpoint security, managed EDR, risk and compliance support, CISOaaS, managed SIEM, and email security.

Firms can either outsource the entire security function to the provider or choose specific services based on the business requirements. Managed security services offer an additional layer of protection against advanced threats.

AI and Machine Learning

 With the evolving customer expectations and increasing workload, Artificial Intelligence and Machine Learning models have become a staple for accounting firms. These technologies enable firms to operate faster, smarter, and more efficiently through task automation, enhanced client interactions, and cost optimization.

According to a survey₁ by Accounting Today, 59% of accountants reported that they save 30 hours a week due to AI implementation. 98% of respondents in another survey by Intuit reported that they used AI to help clients.  

AI and ML can help with:

• Risk Management and Auditing - AI and ML enable firms to identify unusual behavior and deploy internal controls. It can also detect the high-risk areas and flag duplicate entries. Firms also utilize generative AI to review documents for audits, thereby increasing accuracy and reducing manual effort.
•  Fraud Detection - Companies lose 5% of their revenue₂ each year due to fraud. Unlike traditional tools that use predefined rules to detect fraud, AI-based tools deploy self-learning algorithms. These algorithms evolve to identify actual fraud from false positives.
• Tax Planning and Compliance Management - AI/ML optimizes tax management by automating data extraction, expense categorization, reconciliation, and more. It can also cross-check previous filings, taxpayer patterns, and income ranges to detect anomalies. AI tools monitor the amendments to tax laws and adjust accordingly. Moreover, they can also map financial data to appropriate IRS or local tax forms.
• Financial Forecasting - By implementing AI and ML, firms can detect cash flow issues, unusual patterns, and provide more strategic advice to clients. The algorithms collate and analyze large data sets to predict future outcomes with great accuracy.  

Advanced Data Analytics and Visualization Tools

Firms collect data from various sources, including customer interactions and financial systems. Although cloud offers a highly scalable platform for data storage and management, firms require data analytics and visualization tools to segment, analyse, and represent data into a meaningful form.

Tools like Power BI and Tableau collect data from various sources and turn them into comprehensible forms, such as dashboards, reports, and charts.  

A data analytics tool is a must-have for any accounting firm as it helps them identify operational loopholes and trends that lead to project delays and revenue dips. It helps in better decision-making as firms have a clear visibility of the business and future projections. It also makes firms audit-ready with accurate reporting.  

Document Processing Solutions

An accountant dedicates substantial effort and time to reading, assessing, and reviewing documents. Digital processing solutions with OCR (Optical Character Recognition) scan the documents and extract the necessary information without any human intervention.

For instance, OCR can extract information, such as invoice number, amount, and vendor name, from an invoice and export it to Excel.

Data processing tools help big firms process large volumes of documents rapidly. Moreover, when integrated with other technologies, such as AI and big data, these tools can help firms extract deep insights.

Disaster Recovery and Backup as a Service

Cloud providers follow a shared responsibility model, meaning they are responsible only for the security of the IT infrastructure, not the data. Hence, firms must have an additional backup solution in the event of a cyberattack.

Various managed IT providers offer services like Backup as a Service and Disaster Recovery as a Service. These services mitigate the effects of cyber threats and ensure that firms remain functional. Moreover, they offer easy recovery options with storage-optimization features. These services, along with the provider’s security features, create a robust yet flexible security environment for firms.    

 Conclusion

While the cloud has become the backbone of modern accounting operations, it cannot stand alone as the firm’s entire technology strategy. The real competitive advantage comes from building a connected tech stack—one where the cloud works alongside cybersecurity solutions, automation tools, analytics platforms, and emerging technologies like AI and Blockchain.

So, what are your views? What technology changes will you make this year?

Footnotes and Disclosures

₁ - A Survey conducted on behalf of Accounting Today, appearing on April 9, 2024 in a feature by Chris Gaetano, titled: 59% of Accountants use AI to save about 30 hours a week. The URL is provided here solely for reference and as a service to our readers.  Any other trade names or references used herein may refer to registered, trademarked, or copyrighted materials held by their respective owners; they are included in the content for informational and educational purposes only.

_2-  5% of their revenue statistic cited from an article by Accounting Today, appearing on March 20, 2024, written by Michael Cohn, and titled: Organizations lost billions to fraudsters. The URL is provided here solely for reference and as a service to our readers.  Any other trade names or references used herein may refer to registered, trademarked, or copyrighted materials held by their respective owners; they are included in the content for informational and educational purposes only.

Feature content has been adapted from information provided by Ace Cloud Hosting on behalf of Dr. Sangeeta Chhabra, co-founder and executive director of Ace Cloud Hosting. Content within this Insightful Accountant feature is provided for informational and educational purposes only

This is an editorial feature, not sponsored content. No vendor associated with this article has paid Insightful Accountant or the author any form of remuneration to be included within this feature. The article is provided solely for informational and educational purposes.

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