Pure cloud-based financial management solutions are being adopted by mid-to-large sized businesses at a higher rate than predicted, leading to higher gains in productivity and profitability according to research by Gartner.
It found changing mindsets in financial teams are behind the change.
Previously managers have been reticent about moving their operations to the cloud for reasons of data sovereignty and functionality.
However, the ability to collaborate, increased security and advanced analytical tools are shifting mindsets.
The trend has been noticed by leading cloud-based business management software provider MYOB, which says 31% of new enterprise resource planning (ERP) cloud implementations are now for pure financial management purposes.
Gartner's 2017 survey of global senior financial executives found that 37.7% of mid-size enterprises plan to move their financial management operations to the cloud, while “smaller and midsize organisations are adopting cloud more rapidly than larger organisations”.
MYOB enterprise solutions general manager of Carolyn Luey says mid-sized organisations are looking to streamline their finance function by automating business rules, processes and approvals.
“We're seeing a shift in how mid-sized businesses approach their financial management. Many organisations I speak to are looking to online solutions to help them do more with less.
“For the first time in 2017, we saw cloud ERP adoption overtake on-premise installations in the Australia and New Zealand markets,” Luey adds.
She says a big driver of the change in attitude is finance leaders' desire to adopt paperless processes that focus on reducing manual data entry.
“A trend we've seen over the last two years is finance leaders wanting to decouple themselves from manual data entry. This is often because finance teams especially wear the bulk of the responsibility for data entry or consolidation.
Luey says that finance leaders are now seeking to empower other stakeholders within their organisations to enter expenses, manage budgets or self-serve report requests.
Cloud software, like MYOB Advanced, is perfectly suited to the new ways businesses are working.
As a software-as-a-service (SaaS) solution, it offers browser-based access to a host of business management tools, making it simple to implement and requiring minimal IT investment or involvement.
New Zealand-owned phone system technology provider Vadacom is one such example.
It moved to MYOB Advanced and adopted a paperless financial management approach.
“With installation and hardware costs, along with a range of cloud licence options, and sales from direct sellers and resellers, we have a big list of revenue streams that were becoming increasingly time-consuming to manage,” says Vadacom chief executive officer Aaron Ridgway.
“We may hold several hundred items at any time, ranging from small parts like headsets and switches up to phones and associated hardware.
“Previously, someone could go into the stockroom, grab a couple of phones for a project and not tell accounts, so we couldn't be sure whether the items had actually been paid for. Now, using Advanced, serial numbers on items can be scanned before they're taken out of the stockroom,” says Ridgway.
“Using a cloud solution ensures we have a single source of truth, which gives users a central repository for all information, saving time and reducing data errors. Everyone is working on the same live database.
Luey says cloud software is perfect for businesses wanting to streamline finances because it can be customised to create rules for approving costs, meaning finance controllers can manage by exception, not by rule.
“It's interesting to see some sectors are moving to the cloud faster than others. Twenty-two percent of wholesale and distribution and 19% of manufacturing businesses have shifted, while just 14% of professional services firms have moved.
“We're seeing the biggest appetite for digital transformation happening in industries that some might have thought were traditionally late adopters of new technology,” she says.