De-Mystifying Cloud Accounting
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Entrepreneurs and small business owners learn answers to fundamental questions on the hot issue of cloud accounting.
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De-Mystifying Cloud Accounting
- 1. De-Mystifying Cloud Accounting Rich Wilson Cohen & Company
- 2. What is a “Cloud” Application? • On-demand service provided via the internet • Managed by the provider • Typically subscription based or free • Scalable
- 3. Example of Cloud Solutions
- 4. Forbes Top 100 Most Innovative Growth Companies • #10 – Concur Technologies • #9 – Ultimate Software Group • #3 – Monitise • #2 – Netsuite • #1 – Xero
- 5. Long Term/Viable Solution? • Viable as individuals/companies embrace it • Must be practical and beneficial • Only practical and beneficial if supported by solutions/applications
- 6. Who Uses Cloud Solutions? Services Consumer HealthcareSoftware HospitalityOtherNonprofit FOUNDATION
- 7. Long Term/Viable Solution? “The telephone has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” – William Orton, Western Union President, 1876
- 8. There is only one constant with technology... Darwin Wins!
- 9. Direct Benefits to Businesses • Appeal to potential employees/clients
- 10. • Appeal to potential employees/clients • Accessibility (web-based: mobile, tablet, computer) Why Does Cohen & Company Work with the Cloud?
- 11. • Appeal to potential employees/clients • Accessibility (web based – mobile, tablet, computer) • Security Why Does Cohen & Company Work with the Cloud?
- 12. • Appeal to potential employees/clients • Accessibility (web based – mobile, tablet, computer) • Security • Scalability Direct Benefits to Our Clients
- 14. Scalable Cloud SolutionOwner Accounts Payable Third Party Providers Accounts Receivable Accounting Purchase Orders R&D IT HR Operations Vendors Invoicing Payroll Cloud Accounting Solutions
- 15. • Appeal to potential employees/clients • Accessibility (web based – mobile, tablet, computer) • Security • Scalability • Accessibility to relevant applications Why Does Cohen & Company Work with the Cloud?
- 16. Cloud Accounting Solutions Accessibility to Relevant Applications
- 17. • Appeal to potential employees/clients • Security • Accessibility (web based – mobile, tablet, computer) • Scalability • Accessibility to relevant applications • Cost efficiencies Why Does Cohen & Company Work with the Cloud?
- 18. • Appeal to potential employees/clients • Accessibility (web based – mobile, tablet, computer) • Security • Scalability • Accessibility to relevant applications • Cost Efficiencies • Enhanced information Why Does Cohen & Company Work with the Cloud?
- 19. • Appeal to potential employees/clients • Accessibility (web based – mobile, tablet, computer) • Security • Scalability • Accessibility to relevant applications • Cost Efficiencies • Enhanced information • Collaboration Why Does Cohen & Company Work with the Cloud?
- 20. Snapshot of key financial and operational data MRR & ACV Bookings Customer Analysis Churn Analysis CEO Dashboard Managing What’s Important to Your Organization
- 21. Managing What’s Important to Your Organization
- 22. Managing What’s Important to Your Organization
- 23. Managing What’s Important to Your Organization
- 24. Questions?
- 25. Thank You I welcome the opportunity to talk with you: Rich Wilson rwilson@cohencpa.com 216.774.1197 All trademarks mentioned in this presentation are the property of their respective companies. Intacct is a trademark of Intacct Corporation. QuickBooks is a registered trademark of Intuit, Inc. Xero is a trademark of Xero Limited.
Editor's Notes
- I thought we would start with an explanation of what the cloud is
- I could show you hundreds of these slides. There are thousands of cloud apps available now. And there are more and more available every day.
- As proof of this growing market space…. Forbes list from March 2014 Concur – Travel and expense mgmt Ultimate Software Group – Payroll and workforce mgmt Monitise – Mobile banking and commerce Netsuite – Cloud accounting Xero – Cloud accounting 5 year average sales growth of 210% It is one of the solutions we recommend to our clients
- But are these solutions viable and practical? Any solution is only viable if people/companies embrace it Only do that if it is practical and beneficial. Only practical and beneficial if supported by solutions and applications As we just discussed, there are thousands of apps . Inventory Expense reporting Project Management Time Tracking Payroll Anything you can think of to run your business exists. If it doesn’t exist, these solutions allow customization. You could have a piece of software developed that can then integrate into these solutions using API’s. Basically a conduit to allow the transfer of data So let’s look at the who is using cloud solutions NEXT SLIDE
- So who/what companies are embracing Cloud Accounting/Solutions Trusted solution for 10’s of thousands of business SAP alone has 35 million users using their cloud solutions Range from small to large business Mozilla Several leading website/authors/developers estimate that 90% of business will be running some form of cloud solution Leaves us with the benefits - Why are they using it? Because they can run there entire business from a cloud solution More affordable. More Flexible. Save Time. Saves money. Better results. Real Time Data. Ease of Access. Is it viable? Is it pracitcal Absolutely - they are running billion dollar businesses on the cloud Number is increasing daily Demand is so high and market moving so quickly to it that companies that offer ERP solutions are scrambling to migrate to the cloud. SAP was one and are making large strides to go there QB, which has 95% of the small business market Just relaunched a clouds solution They were quickly loosing clients to online solutions Large ERP Companies are moving or have moved to cloud offerings NAV SAP INFOR Forbes list doesn’t contain a single Non-cloud ERP solution NEXT SLIDE
- Yet faced with generally obvious benefits, history and human nature shows us that companies have been presented with technological options and turned away from them. Often to their detriment. Put this in context via another technology we are familiar with IN 1878, Alex. G. Bell offered his patent to WU for 100k, and they turned it down. Think about that – he turned down the opportunity to own the telephone! Granted, that was a lot of money at the time Compared to today, this would be like someone approaching you in the late 80s/early 90s to see if you wanted to buy the patent for a cell phone Look at it with skepticism. Who would want it? I bet everyone of us has one in our pocket right now It wasn’t viable or practical William’s opinion He felt that there was No place for the technology But What if…? Hadn’t been short sighted/thought otherwise Current MV of WU – 11B I was surprised. I haven’t sent a telegram in at least a month or two Current value of Verizon – 137B Founded in 1983 with merger of Bell Atlantic and GTE What could WU be worth. What might you companies lose or be worth by embracing technologies? What makes our/your situation different is that the cloud has an established history at this point this is already tried and true. Is growing and is expected to continue to grow faster than all other areas of IT What value will be lost to your business if you dismiss cloud solutions? You are not going to be alone – 35M SAP User, Xero with triple digit growth Ipod – Real Networks - http://www.itbusiness.ca/news/10-of-techs-biggest-missed-opportunities/13860 QB expects 2.5 million desktop users (half of current desktop users) to convert to cloud NEXT SLIDE
- Some reports show that 90% of small businesses will be using cloud solutions in next three to five years “small’ is a relative term and not defined QB, Infor, SAP, MS NAV/Dynamix, Realize if they don’t they will be left behind Because there is only one constant with technology……Darwin Wins And the same may be true for your business. Your competitors are moving to these solutions NEXT SLIDE
- The previous five minutes is the foundation for why we at Cohen are working with Cloud solutions and encouraging our clients to do the same I want to spend a few minutes talking about the benefits our clients and those using the cloud see Appeal to potential employees New generation of works expect these types of services So the companies that have them are drawing that talent They grew up with them All things being equal, they will go to the company that uses these technologies Next Slide
- Accessibility Get to your info from anywhere/anytime Ipad Phone Laptop NEXT SLIDE
- Security Every application is a bit different, but in general Same security standards as bank logins 3 part security Multi-authentication 128-bit encryption But Hacking does happen Happens to cloud and non-cloud alike I don’t fully understand why people feel that because they have it sitting on a server in their building or on a local machine that they are more secure Probably the exact opposite What if a disaster happens? You have to have a full time staff of experts to protect the data Vacation – not say where, but volcanoes, warm water, luaus Car broken into. Ipad stolen. Didn’t have to worry about them accessing software But if I were a business owner, What if it had been my computer What if it had my QB file on it With cloud I don’t’ need to have those saved locally as I can access them anywhere anytime What do most companies do to ensure contenuity of their business if something happens?? Back it up on the cloud? Why not just put it on the cloud?
- The next few slides are the ‘Big’ ones Next Slide
- All businesses start small Apple started out of their garage Harley Davidson out of a shed Add complexities Eventually look like this Poor line of sight to important information Access to necessary information is poor Information may be poor It is scattered It is disjointed Incomplete Hard to get a good picture of how your company is doing Repercussions of this are: Poor decision making ability Duplication of work Duplication of employees/costs Slow moving decision making Excel nightmare I love Excel Use it everyday But can’t run a business from it NEXT SLIDE
- This puts all info at the center, so anyone can access it (if they have permission) Allows your business to grow in an organized manner In the case of existing business, you plug in the departments As the owner, you have direct sight into your operations NEXT SLIDE
- The next two are the really ‘Big’ ones Accessibility to relevant applications NEXT SLIDE
- Along with the ability to scale up by department, you can also scale the application by adding more applications to it. Very very powerful and cannot be emphasized enough Used to be you paid money to buy application to do it all In reality, it is not good at everything, so you make due or pay someone more money to customize it No longer making due with poor/inadequate systems that you paid to much for and now feel obligated to use Now if you don’t like an application Cancel the subscription Put in another Data is in the middle, so the transition is easy Allows for unlimited combinations to structure your business because you are choosing the relevant applications Allows each application to be specialized No two businesses are alike, so why should the business application shoehorn you into something a competitor uses It is very very powerful and efficient NEXT SLIDE
- Allows you to do more with less Cost Efficiencies Clients that have paid 50k for license plus 100’s of K’s for installation Three years later, need to upgrade – same cost again This was a big complaint of QB users You still may need an outlay of cash to setup and put the pieces together Not nearly what it would be in an local ERP install Cloud solutions – upgrades just happen Outsourcing of jobs since data can be accessed from anywhere No longer need to find someone that is in that drivable distance from your office Allows you to get better quality people for your money Save on paper process – which saves on time No need to pull various data together via excel Saves time No need for extensive IT infrastructure
- Access to the same types of information that Shell, BK, Mozilla, Kayak, Jimmy Johns are using Because Same tools/same software that is being provided to Benchmarking NEXT SLIDE
- Access to the same types of information that Shell, BK, Mozilla, Kayak, Jimmy Johns are using Because Same tools/same software that is being provided to Benchmarking NEXT SLIDE
- Data is easily accessible Set up dashboards/landing screens so that you can see important info when you land on the site Customized views based on peoples needs within your organization NEXT SLIDE
- Makes your business decisions very powerful Blurs the lines between accounting and finance No longer using accounting as a representation of the past No longer just ‘what has happened’ Now it is ‘this is what is happening, right now’ Now, using the information to run your business Benchmark Make real time decisions If you are one of 1000 other companies in the same industry, how are you doing against those other industries If they are all on the same software, can use them to benchmark It becomes very powerful, very useful, very relevant information That is why we at Cohen are working with these solutions and encouraging our clients to use them We can use these tools to help make your business more efficient and effective From our work with Audits and Tax prep, we have found A vast majority of our clients have inaccurate books We use these technologies to become your back office Do the bookkeeping Augment or replace your staff We can clean up the books during this transition We can keep them accurate going forward A recent client we took over had incorrectly recorded income and therefore paid taxes on income he never received Another example – a client who is starting with us on the first was about to walk into a meeting with his investors Early stage company Showing a profit Email from his bookkeeper saying that she found some mistakes that she had made and instead of a modest profit, now at a 100k loss We can be the CFO/your accounting staff Help you make decisions Gives you the ability to leverage a firm of 250+ people to help you make decision Using Cloud Solutions completely chagnes the midset and approach to your business Makes the information very powerful NEXT SLIDE
- Happy to show you a demo/general questions