Impact of Cloud Based Accounting

This article explores the impact of cloud based accounting on small businesses in Australia. It discusses the benefits and challenges of cloud computing in the accounting industry.

Running head: IMPACT OF CLOUD BASED ACCOUNTING
The impact of cloud base accounting on small business in Australia
Name of the Student:
Name of the University:
Author’s Note:

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IMPACT OF CLOUD BASED ACCOUNTING
Table of Contents
Literature Review............................................................................................................................2
Brief summary of the theory and progression in the field...........................................................2
Common Themes and Findings of Four Articles........................................................................2
Different Themes of the Four Articles.........................................................................................3
Managerial Implications of the Four Articles..............................................................................5
Limitation of the Study................................................................................................................7
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................8

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Literature Review
Brief summary of the theory and progression in the field
Cloud computing is extensively looked upon as the process of shifting innovation that
can in a very big way change the way the resources of IT are given, utilized and paid for the
companies. It is seen that unlike the other sorts of innovations of IT, cloud computing associates
the existing heterogeneous technologies within a coherent ecosystem more than creating a new
set of process. It is due to this fact that it makes the explanation and the scope of cloud
computing specifically difficult to understand.
This section of the paper would therefore look to assess various articles that are
associated to the topic with the help of which an understanding can be attained with respect to
how cloud computing is having an impact on the small businesses in Australia.
Common Themes and Findings of Four Articles
Cloud computing has permitted extensive flexibility in as to how the resources of
computing are utilised by the companies. as cloud computing associates to an extensive range of
the computing apparatus with the help of internet, cloud computing generates an illusion of
resources that are infinite. The resources that are within cloud computing process can be pooled
and can be given to any user at any point of time and this means that the providers of cloud
computing would be able to supply infinite amount of resources of computing to their end users
within a short time phase and even reallocating the resources of computing which a user is no
longer in need of. In addition to this, from the perspective of the business cloud computing is

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significantly developing which shows focus of the businesses has shifted from normal techniques
to computer-based cloud computing system for the purpose of maintaining accounting records
and other information. As per general trend in the market, cloud computing has come a long way
since 2014.
In the practicality, this permits the business the users to undertake adjustments at the last
minute within their IT services in order to match with their original demand. This provides a
relief to the companies from having an estimation resource usage for the coming time period or
undertaking any additional capacity that is not required during most of the years. This
specifically advantageous for the companies whose resource use trend is irregular or the demand
for computing resources constitutes of fluctuating troughs and peaks. Furthermore, cloud
computing provides the capability to spread the tasks that are computation intensive over a
bigger number of servers all over the globe.
Different Themes of the Four Articles
There are different themes discussed in different academic papers which are considered
regarding the different software which are used and applicability of cloud-based computing
system in different professions. Some papers also highlights the threats which the new process
possess.
Cloud computing has permitted extensive flexibility in as to how the resources of
computing are utilised by the companies. as cloud computing associates to an extensive range of
the computing apparatus with the help of internet, cloud computing generates an illusion of
resources that are infinite. The resources that are within cloud computing process can be pooled
and can be given to any user at any point of time and this means that the providers of cloud

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IMPACT OF CLOUD BASED ACCOUNTING
computing would be able to supply infinite amount of resources of computing to their end users
within a short time phase and even reallocating the resources of computing which a user is no
longer in need of.
In the practicality, this permits the business the users to undertake adjustments at the last
minute within their IT services in order to match with their original demand. This provides a
relief to the companies from having an estimation resource usage for the coming time period or
undertaking any additional capacity that is not required during most of the years. This
specifically advantageous for the companies whose resource use trend is irregular or the demand
for computing resources constitutes of fluctuating troughs and peaks. Furthermore, cloud
computing provides the capability to spread the tasks that are computation intensive over a
bigger number of servers all over the globe. The use of cloud computation had attained
significant amount of interest after the year 2014. The acceptance of the consumers in
incorporating and embracing the immense of benefits of cloud computing downsides, the market
of cloud accounting even saw a better road for development in the future years to come.
The software established by New Zealand known as Xero is identified to be one of the
biggest success and this was found with the help of a survey. The survey even discovered how
the Australian small business units gained some competitive edge in the incorporation of cloud
accounting software. Statistics reveal that 14% of the Australian small business units have taken
the benefit of the application of cloud accounting in order to manage their accounts (Li et al.
2015).

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Managerial Implications of the Four Articles
The adopting cloud-based measures for mobile users along with different accounting
packages which is available to companies has effectively helped businesses to see a clearer road
to development. An instance of significant use of cloud computing system in a business
environment is of XERO application which has made a big progress in the market (BPO
Connect. 2014). As per studies which have conducted, it is clear that more and more organization
are recognizing cloud computing techniques advantages and implementing the same in the
operational process of the business. An estimate of around 1622 small businesses have adopted
cloud-based computing system in order to make their business structure more efficient. As per
statistics which are available small businesses which are operating in Australia have already
implemented cloud computing software and around 14% of the same are benefiting from the
application of cloud computing software in accounting process.
As discussed above, Xero, Sage are some of the prominent cloud -based computing
software which is tremendously used in a business. The reasons which cam be identified behind
the usage of such software in business is mainly due to efficiency which is promoted by such
software and lesser time which is taken for processing the financial information of the business.
In addition to this, it is also a fact that most of the software are capable of generating reports
which makes the work of the business much easier. It is on the basis of information that the
management of the company takes vital decisions regarding the operations of the business.
In addition to this, the success of Xero in a business environment has motivated the
management of most of the small scaled businesses for implementing the same in business
environment. As per the data which is available regarding the 46% of the small businesses
operating in Australia are looking forward to implement cloud computing system in their

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businesses to derive maximum advantages from the same. In a business which is looking forward
for incorporating cloud computing in a business needs to understand the usage for the same. It is
to be noted that cloud computing can be used to improve the service to their clients or the same
can also be used for improving the practice management system of the own business
(Ir.canterbury.ac.nz. 2019). The reasons due to which cloud-based computing system became so
much popular over the recent years is due to the greater flexibility which is provided by the
system in making computations and also connecting wide range of devices for making use of the
resources of the business. Resources which are used under the cloud computing model are
pooled and the same can be made available to any user at any given time. The system provides
greater time efficiency for processing information and has ease of access to all the necessary
information. Therefore, it can be clearly established that the cloud-based computing system
effectively helps a business in taking major decisions for the business. This allows business users
to make last-minute adjustments to their IT services to match their actual demand.
The attainment of a positive feedback for the use of Xero from the people who have not
even used them had a significant amount of impact. It is seen that half of the companies of
Australia have said that they are looking forward to covering their system to cloud computing
which is more than the entire percentage of the people who are making use of cloud accounting.
Cloud computing even reduces any sort of risk related to the infrastructure of IT by
altering the capital investment with the operating costs. IT infrastructure are usually very risky
investment, because while IT systems are often believed to produce significant benefits and even
competitive advantages, there is no guarantee that such benefits would necessarily accrue to the
firm. In addition to this, there is always an issue regarding the security of the software which is
being utilized by the business.

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Limitation of the Study
However, consideration is being taken for improve the security aspect which is related to
a cloud-based computing system. Cloud computing also allows businesses to appropriately
manage the operations of the business and also brings about efficiency in the operational
structure of the business (Ifac.org. 2019). But is also estimated that the process of implementing
the cloud computing system is costly process.
The downside to the adoption of cloud-based computing system is that, it casts a shadow
on the role of accountants in a business as most of the entry and processing of information along
with presentation and generation of report would be done by the accounting software. It is for
these reasons that the future of accounts might get endangered due to implementation of cloud-
based computing system in a business.
Conclusion
Therefore, it can be rightly said that cloud computing is recognised as an important
innovation that can potentially transform how businesses use IT to conduct their operations. The
system would have numerous application in different departments and can bring about more
efficiency in a business structure. In addition to this, it can also bring about accuracy in the
decision-making process as the information which is provided by such software are well
processed with a rare chance of error or misstatement. The accounting industry would undergo
significant changes while a negative impact is likely to fall on accounting profession with the
introduction of cloud-based computing software.

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Reference
BPO Connect. (2014). Australian Small Businesses Lead the Cloud Accounting Adoption - BPO
Connect. [online] Available at: https://bpoconnect.com.au/australian-small-businesses-lead-
cloud-accounting-adoption/ [Accessed 11 May 2019].
Ifac.org. (2019). [online] Available at: https://www.ifac.org/system/files/publications/files/ifac-
code-of-ethics-for.pdf [Accessed 11 May 2019].
Ir.canterbury.ac.nz. (2019). [online] Available at:
https://ir.canterbury.ac.nz/bitstream/handle/10092/11349/ACCT694ThesisforLibraryDepositFina
l.pdf?sequence=1 [Accessed 11 May 2019].
Li, M., Yu, S., Zheng, Y., Ren, K. and Lou, W., 2013. Scalable and secure sharing of personal
health records in cloud computing using attribute-based encryption. IEEE transactions on
parallel and distributed systems, 24(1), pp.131-143.