Paradigm Shifts in Accounting Technology

See Figure 2: The New World

Recently, several tipping points have combined to create a marketplace of robust applications and services that make this new world concept into real solutions we can buy and use. These “tipping points” include the following:

• Internet Access – We have reached a point where high-speed Internet access is now ubiquitous in the developed world, and in most places we can access the Internet via a broadband cellular connection.
• SaaS is Here – QuickBooks Online (now with over 250,000 users), NetSuite, Intacct, Bill.com, and a newcomer, Xero, have developed robust SaaS applications that can scale from the smallest to the largest businesses, providing complete accounting systems in the cloud.
• Collaboration Technologies are Exploding – Facebook, Twitter, LinkedIn, Yammer, Google Apps, Office 365, all have matured and are now mainstream platforms on which people “collaborate.”
• Online Banking – Nearly every bank in the world now provides online access for customers. Technologies like Yodlee and Intuit’s Digital Insights provide banking and other financial account “feeds” to SaaS applications on the Web.
• Portals – File sharing portals like ShareFile, Box.net, Dropbox and others provide secure portals for file transfer and “publishing” of information such as financial statements, tax returns, and other sensitive data.
• Mobile Devices – Cell phones are now a realistic delivery platform for all financial data and services. The operative phrase is, “There’s an app for that.”

In addition to these tipping points, or perhaps because of them, we’re seeing whole paradigm shifts in how small businesses can use technology to change the way they manage their business information. Here is a list of several every-day business processes for which new innovations have dramatically changed how businesses manage information.

See Paradigm chart

If your clients are just beginning to consider these new paradigms, it may not work to suddenly switch all of their business processes to the cloud at the same time. Instead, choose some key business processes such as online banking, online payroll, online bill payments, application hosting, online document management systems, and online backup systems to bring your clients and your firm closer to this new world.

As products and services in this new world mature, and as the Gen X and Y kids become business owners who select professional advisors who embrace these technologies, your success will no longer depend on your ability to learn better tricks for using old world accounting systems, but instead will depend on your agility in using a broad range of new and emerging tools in the new world.