Australian SME's are overwhelmingly adopting Cloud accounting platforms with 96 per cent of businesses looking to increase expenditure on the software.
According to a recent survey by Wolters Kluwer, CCH in Australia, Australian SMEs are displaying a highly positive attitude to Cloud computing whether they are users or not, with 87 per cent citing security and functionality as the key drivers for Cloud investment from an accounting perspective.
More than 96 per cent of Australian SMEs are also intending to increase expenditure in the near future as they embrace digital disruption.
However, the annual research highlighted that 73 per cent of SMEs were yet to move to any Cloud accounting computing solution.
The new research, Can the accounting profession keep up with clients and the Cloud also outlined that whilst 69 per cent of accounting firms use a Cloud-based accounting application with their clients, purchasing decisions were overwhelmingly being influenced by SMEs 93 per cent of the time.
Prepared by digital disruption specialist analyst house, CapioIT, the research was based on interviews with over 500 SME and accounting firms and provided a qualitative and quantitative view to better understand current and future cloud computing investment perspectives.
Wolters Kluwer Asia-Pacific chief executive, Russell Evans, said the findings revealed the impact of the cloud and its benefits for both SMEs and the accounting profession.
“We undertook this survey as digital business change is more than cloud," he said.
"The impact of cloud is transformational and there is no need for SMEs or the accounting professional to stay with or even return to out-dated business models. Cloud is the business model of the future across all sectors.
He said the research built on recognition last year that small business owners wer prone to a “lone wolf” approach in decision-making, trusting their own instincts over advice from external sources apart from their accountant.
Accountants are now often having to be proficient in the use of up to eight different Cloud accounting software packages.
"The aim is to provide more clarity about the value of SMEs and professional accounting practices working together more closely to harness digital disruption trends and deliver distinct competitive advantages via cloud in the marketplace.”
Head of Strategy for the Accounting Professionals unit in Australia, Daniel Wyner, said while the shift to the Cloud has started more slowly for SMEs, the shift for both accountants and clients had started at speed.
“With Cloud accounting expenditure forecast to increase a staggering 96 per cent for SMEs it is important that they and their accountants align to identify the business issues and benefits that can be achieved,” he said.
“This survey underscores the need for professional accountants to be fully informed on how to advise on cloud outcomes, as well as the importance of not delaying this decision.”
The study also detailed the lack of awareness of the impact of government regulations and changes to red tape.
It confirmed that current Cloud accounting packages taking on the current role of digital disrupters will themselves face disruption by new Cloud accounting entrants, such as free or very low monthly fee global offerings, the possibility of tying accounting platforms with major banks, mergers and consolidation as well as cloud platform ecosystem development.
The major findings included: 7 out of 10 accounting firms use a Cloud-based Cloud application with their client; 60 per cent of accounting firms in regional areas are using Cloud-based accounting applications with their clients and 72 per cent of accounting firms in urban areas are using Cloud-based accounting applications with their clients
It also found the average age of an accountant using the Cloud was 36 years, while the average age of an accountant not using the cloud is 40 years.
The key drivers of cloud investment include 44 per cent for security, 42.6 per cent for functionality, while 76.3 per cent of current users are very likely to increase their expenditure on Cloud computing, a further 19.8 per cent are quite likely to increase their expenditure on cloud computing.
Existing consumer-focused cloud accounting brands will face new market entrants including free global accounting platforms, accounting platforms provided by local retail banks or Cloud ecosystem providers for accounting, payroll, human resources and order and inventory management processes. These new market entrants are already rolling out, according to the research.