The future of cloud accounting: Key trends in the UK

Dayle Rodriguez, Systems Advisory Manager at Kreston Reeves LLP, comments, “The profit growth for cloud-based firms isn’t surprising. Logging into, and loading up, a desktop system can take anywhere between 2 to 6 minutes depending on the size of the organisation e.g. a larger chart of accounts. If you’re a large firm, multiply 6 minutes by 100 or 200 clients that you do weekly bookkeeping for, and you can see there’s already a time loss in this one area.” 

While offering efficiency gains in practice, many accountants also have security concerns around storing their data in the cloud.  

To understand sentiment and usage further, we asked 100 UK accountants about their use of the cloud, and how they think it’ll shape the future.  

In this blog, we explore some of the key trends from our report, ‘Cloud accounting trends in the UK’.   

Key trends in cloud accounting in the UK

Our report revealed three key overarching themes:

Cloud accounting is for now, and for the future.

47% of UK accountants are currently using cloud-based software (SaaS) with a further 34% using a mixture of cloud and on-premises. Furthermore, the majority (56%) of accountants believe that cloud accounting will become the standard for all businesses in the future, while 36% think it’ll be used alongside on-premises.

Productivity and accessibility are considered the main benefits.

Accessibility is considered the main benefit of the cloud for accountants, cited by 48% of them, followed by 44% suggesting productivity and time savings.

Despite concerns around cyber-attacks and data security, accountants trust the cloud.

While accountants cited cyber-attacks (52%) and data security (43%) as two of their biggest concerns around using the cloud, they show a lot of trust in the technology despite the perceived risk.

The benefits and concerns when using cloud accounting

When looking at the perceived benefits of the cloud, the first was accessibility, with 48% of accountants seeing this as key, followed by productivity and time savings (44%), and data functionality and ease (43%). Finally—though not miles away—was AI capabilities (35%) and lower costs (31%), which don’t seem to be priorities for cloud accounting over on-premises. 

“Scalability is a big benefit with the cloud,” says Simon Kershaw, Director of Technology at Wolters Kluwer TAA UK. “You can scale up and down instantaneously. It’s so versatile in this way. With cloud accounting software you can get what you want and pay for what you need. It’s about having just enough, and scaling, rather than paying for wasted storage or servers.”

“Real time data on a cloud-based platform means that management accounts and forecasting reports can be drafted easily,” says Rodriguez. “This also makes the service affordable and accessible to smaller businesses.” 

However, when it comes to accountants’ key concerns, the majority (52%) worry about cyber-attacks. 45% are concerned about connectivity, and 43% fear data security and privacy risks. As for the least of their concerns: 15% are worried about the cost, with 3% saying they have no worries at all.

Data storage and security in the cloud

Despite concerns, a staggering 97% of accountants mostly, or totally trust the cloud for working and storing their data.  

“People are often worried about cloud security,” Kershaw notes. “However, it can often be safer than keeping your data on-premises. For example, imagine all the risk that would come with keeping your data server locked in a room with a key, compared to biometric verification online, and two-factor authentication. My advice is to find a provider that can meet your needs and do your due diligence.”

Cloud accounting trends for the future

We asked 100 UK accountants what their plans for the future of cloud accounting in their practice or company was, and the results showed a strong trend towards cloud. 

45% of accountants plan to continue using the cloud as they were before, while 31% want to move to a fully-cloud based model. 14% plan to get training in using cloud products, as opposed to 5% who want to avoid using the cloud. 4% will adopt it for fear of missing out, and 1% don’t believe the model is right for their role.

“In my opinion everything will move to the cloud,” Rodriguez says. “I predict that the 36% of accountants who think that on-premises and cloud systems will be used in parallel will decrease to 25% within the next 12 months. New users will be trained on new systems, and providers will make their cloud offerings more appealing.”  

Interested in reading the full report, featuring insights from 100 UK accountants?