Disco, John Travolta and bearish markets. The 1970s. Lots of trends began in the ’70s that are still going strong. In fact, one of the most fundamental changes in our day-to-day financial lives took hold then — the ATM. The ATM is an indispensible tool for our busy lives today. It’s way more efficient than going to the teller and way more convenient. But how many of us used ATMs in the ’70s?
I didn’t start using them until the late ’80s. My parents preferred visiting a teller until recently and still do most of their banking at the local branch. While it may have taken a while, we can all see the benefits of ATMs today: convenient, fast and always available. It makes me ask the question, “What is the next big technology advancement in the accounting profession?”
I was recently asked a related question by Sequoia Capital, the financial backers of YouTube, Google, Apple, Atari and others. They asked if I thought the time had come for businesses to do their accounting online. My answer was an emphatic yes. I believe that sometime in the next five to 10 years, the default medium for accountants and small businesses will move from desktop accounting to online accounting. Why? Because online accounting applications like ATMs are convenient, fast and always available. As such, the time to invest and learn is now. Solutions exist today, and more and more are being built every day. And as with most technology, there are rewards for the early adopters: customer acquisition opportunities, increased cost efficiencies that increase your margins, and more flexibility to do your work where, when and how you please.
At the core of my belief in the SaaS revolution is the strong benefit for customers and software providers. SaaS is a complete shift in both the development model and the usage model of software. In many ways, it harkens back to the year I was born when processing was centralized using mainframe computers but with a faster and better user experience. The cornerstone of a SaaS application is that all the data is stored and accessed from one location on the web.
Centralized data is the key to better and more efficient collaboration. Having the ability for both you and your customer to look at the same accounting records from any web-enabled device means both of you are free to travel and conduct your business from anywhere. It means that everyone is on the same page when it comes to an issue, whether you are supporting your clients or the software provider is. Something as simple as, “Did the client record the bill as a payable or a payment?” is now a short conversation, if that. The other obvious benefit of centralized data is that you can leave the dirty work of backing up your files to the SaaS provider. No more trying to remember if it’s time to backup and no more driving the backup offsite far enough away from any natural disasters that might occur. Backups just happen automatically in real time.
Centralized data and the web interface in particular enable software providers to respond more quickly to customer needs. Software providers are able to fix bugs and update the user experience without any involvement from the customer. Customers no longer have to wait for the annual update. Instead, applications are often updated every eight to 12 weeks. It’s a win-win for both the customer and the software provider, which translates into faster learning, more frequent upgrades and simplified customer support. The funny thing is that once you make the technology leap, it’s hard to imagine it any differently.