Migrating your accounting firm’s tech stack to the cloud

If you've been waiting to adopt cloud solutions, now is the time to do it. In this article, we'll walk you step-by-step through how to migrate some - or all - of your tech stack to the cloud. In this article we’re going to cover:

• The benefits of cloud migration for accounting firms
• What firms can move to the cloud
• The process of migrating your accounting software to the cloud

Why migrate your tech stack to the cloud?

Why are so many accounting firms turning to the cloud? Cloud-based technologies promote growth by making performing and delivering services effectively easier. Cloud tools allow tax and accounting professionals to:

• Serve clients remotely
• Hire staff remotely
• Send communications digitally
• Transfer data securely
• Integrate software efficiently
• Analyze data insightfully

It’s not just marketing speak, either. There’s data to back up the benefits of migrating your accounting firm’s tech stack to the cloud. Compared to on-premise or hybrid firms, cloud-based firms were more likely to report year-over-year (YOY) revenue and profitability growth:

• Cloud firms 74% reported YOY revenue growth and 71% reported YOY increases in profitability
• On-premise/ hybrid firms - 59% reported YOY revenue growth and 51% reported YOY increases in profitability

Protecting the firm when disaster strikes: Lepper and Company

Beyond revenue and profitability, with a cloud-based tech stack, there’s also the reassurance that if something happens to your firm’s physical presence, there is built-in protection of the firm’s data. Cloud accounting solutions can form the backbone of a good business continuity plan, as a firm in Pickney, MI, found out when their firm – and several of the businesses surrounding it – was struck by an unexpected and devastating fire that destroyed the firm’s physical office.

However, because the firm’s data and mission-critical applications were in the cloud, they were able to implement their disaster recovery plan and be back up and running in less than 48 hours.

Read more about Lepper and Company’s story and how cloud solutions can help save your accounting firm when disaster strikes.

What can you migrate to the cloud?

So, just what can you migrate to the cloud? Depending on your needs, you can migrate some or all of your tech stack to cloud-based services. Cloud services fall into three major categories: 

Infrastructure as a service (IaaS): physical network components, including data center space, data storage space, and networking devices. 

Platform as a service (PaaS): software environment resources, including operating systems and databases. 

Software as a service (SaaS): software applications. 

You can move almost any app solution to the cloud within the software category. Some of the most important cloud-based software for accounting firms includes apps for: 

• Tax compliance/ preparation 
• Tax advisory 
• Audit and assurance services 
• Document management and storage 
• Client portals and collaboration  
• Workflow solutions 
• Practice management 
• Research tools 

You don't have to transition your entire tech stack to the cloud to benefit from cloud-based solutions. The beauty of cloud migration is its flexibility – you can migrate as much or as little of your network as makes sense for your firm. Many firms prefer the slow and steady approach, first choosing to migrate only a few select solutions to the cloud. This flexibility puts you in control of your cloud journey.

An important part of the cloud migration process is deciding which infrastructure components, platform components, and apps would benefit you most if you moved them to the cloud.

How to migrate your firm's tech stack to the cloud.

You can approach cloud migration as a ten-step process. 

1. Identify migration needs
2. Set migration goals
3. Establish measurable benchmarks
4. Research cloud solutions
5. Establish your budget
6. Evaluate business benefits
7. Run network backups
8. Schedule migration time
9. Train your team
10. Monitor performance benchmarks 

Here is a breakdown of what each step involves and how to execute it:

1. Identify migration needs

Start your journey to the cloud by identifying what you need to migrate. Cloud migration is not an end in itself, but a tool to increase the efficiency of your business processes. With this in mind, you can frame your cloud migration in terms of your existing business processes and how to improve them:

• Review the steps in your firm’s existing workflow, including internal and customer-facing processes. 
• Identify which infrastructure, platform, and software tools you're already using to support these processes. 
• Identify places where you could reduce labor or costs or add functionality by using cloud-based tools. 

For example, let's say a major part of your workflow is receiving spreadsheets and documents from clients and entering the data into your tax preparation software. Would it save you time if you adopted cloud-based digital tax workflow tools that enabled clients to provide you with this data digitally so you can import it into returns automatically? 

Consider other routine tasks that could be simplified through the cloud, such as signature collection, electronic filing, and invoice generation. 

2. Set migration goals

After assessing your needs, you can begin setting goals for your accounting firm’s cloud migration. Objectives can include firm outcomes you hope to gain from your cloud migration and goals for your migration. Consider setting goals in areas such as:

• Efficiency gains 
• Customer satisfaction 
• Cost savings 
• Profitability gains 
• Migration time 
• Network downtime 
• Migration budget 

To make your goals more concrete, you may find it helpful to break them down into milestones. For example, you might break your migration timeline goals into steps by setting deadlines for specific migration phases.

3. Establish measurable benchmarks

Wherever your goals lend themselves to measurement, seek to establish benchmarks you can use to track your progress. To do this, you can use common key performance indicators (KPIs) corresponding to the goals you have set, such as:

• Efficiency gains: billable hours 
• Customer satisfaction: net promoter score (NPS) 
• Cost savings: return on investment (ROI) 
• Profitability gains: net profit margin 
• Migration time: migration duration 
• Network downtime: network uptime 
• Migration budget: estimated vs. actual expenses 

These are just some examples of the many KPIs commonly used in each area. Defining measurable benchmarks will help you manage your migration and assess its success.

4. Research cloud solutions for accounting firms

With your goals and benchmarks defined, you can begin looking for solutions that meet your firm’s requirements. You can use a variety of resources to conduct your research, including:

• Employee input 
• Peer input 
• Competitor analysis 
• Review sites 
• Industry blogs 
• Customer reviews 
• Social media 
• Video demos 

Guide your research by making a checklist of the requirements, such as software types, features, and costs. This will help you identify promising solutions and eliminate unfeasible ones.

Use your research to generate a list of potential vendors. As you start narrowing down your options, you can dig deeper into your top choices by contacting vendor representatives for demos and quotes.

5. Establish your budget

With some prospective vendors in mind, you can estimate the costs and budget for your cloud migration. To put this in perspective, you should first review your current costs to have a benchmark for comparison. This will assist you with determining whether a prospective solution represents a good return on investment for your company.

When estimating cloud migration costs, consider the actual migration and follow-up costs stemming from your migration. Potential expenses include:

• Cloud service subscription and licensing fees 
• Data storage fees 
• Development fees for redeveloping legacy apps and integrating cloud apps with legacy systems 
• Data restructuring fees 
• Infrastructure provisioning and implementation fees 
• Network and security redesign fees 
• Staff retraining fees 
• Hiring fees 

Some of these expenses can be avoided or reduced by judicious selection of your migration strategy and cloud providers. For example, if your cloud software provider supports integration with your legacy apps, this can cut your costs.

6. Evaluate firm benefits

Once you have some prospective solutions and estimated costs, you can evaluate whether your anticipated business benefits merit investing in your selected solutions. Consider the impact of cloud migration on areas such as:

• Productivity 
• Service quality 
• Customer satisfaction 
• Net revenue 
• Operating expenses 

To the extent you can, quantify each benefit by translating non-dollar benefits such as productivity, service quality, and client satisfaction into dollar amounts. For example, many tax and accounting professionals spend as much as 65% of their time on data entry.

You can calculate your cloud migration ROI by taking your projected return, subtracting the cost of your investment, dividing it by your investment cost, and converting the result into a percentage.

Consider testing one component of your business on the cloud to see how you benefit before migrating other parts of your operations. Some cloud solutions - like CCH Axcess - offer modular components that let you scale your investment up or down as needed.

7. Run network backups

Before beginning your cloud migration, you should back up any data on your existing network, including any data you'll be moving to the cloud. This will help protect you from issues you may encounter during the migration process, such as corrupt or missing file errors.

Traditionally, the best practice for data backup is the 3-2-1 backup strategy:

• At least three copies of data (including your original data and two backups) 
• At least two different storage media (such as disk, tape, network-attached storage, or storage area network) 
• At least one copy stored off-site 

If you're using a cloud backup service, you should check if your provider stores multiple copies in the cloud, a practice known as data redundancy. This protects you from data loss in the event of a physical disaster at one server location.

8. Schedule migration time

At this point, you're ready to begin your actual cloud migration. This consists of setting up your cloud environment and transferring your data. Depending on the scope of your migration and the amount of data you're moving, this may take anywhere from a few minutes to a few days.

Work with your cloud provider to plan a migration strategy and schedule your migration time. If your provider anticipates significant downtime, try to schedule your migration at a time with the least impact on your staff and customers.

With the CCH Axcess platform, most migrations are completed within a day.

9. Train your team

To begin enjoying the fruits of your cloud migration, you'll need to train yourself and any staff how to use your new environment and tools. Designate a contact on your team to work with your cloud provider to coordinate training and provide resource recommendations for best results. Most cloud providers offer resources such as tutorials, knowledge bases, and webinars to assist with training.

If your customers use your new cloud apps, you'll also need to train them to use your cloud client portal. Use your cloud provider's resources to help educate your customers or develop your resources to assist with training.

For example, you might create videos to support your client onboarding process or show customers how to perform tasks such as sharing accounting spreadsheet files. Consider surveying your customers about what type of resource tools would most assist them.

10. Monitor performance benchmarks

As you begin using your new cloud provider, evaluate your solution's performance by monitoring the KPIs you selected when establishing your benchmarks. Many cloud apps feature native analytics and reporting tools you can use to track performance. You can gain deeper insights by connecting native analytics with business intelligence software for customized analysis.

CCH Axcess offers Workflow Analytics as a Service that allows you to connect with Microsoft Power BI to gain insight into the efficiency of your workflow.

Simplify your cloud migration with the right software provider

Cloud migration can help you increase profitability by improving efficiency and customer satisfaction. Selecting the right cloud solutions for your needs is critical to enjoy these benefits. Integrated cloud tax and accounting solutions can simplify your migration process by bringing together the applications you need in a unified interface.