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Software's cloudy future

08 February 2011
Categories: IRIS , Sage , Admin
How will tax apps progress online? DANIEL SELWOOD asks the experts

Back in the day, writers’ visions of the future heavily featured technology that would make mundane life easier, faster and more convenient.

In classic/corny sci-fi fiction, people would have no need to waste time cooking or dining because meals would be available in pill form. (The nearest we’ve got at this point in the 21st century is pre-sliced veggies.)

Travel would take place almost exclusively in mid-air, be it by hover-car or jetpack, and robots would be humanity’s loyal servants, carrying out all the menial and dirty jobs with which we skin-sacks cared not to sully ourselves.

The enslavement of automatons (until they rose up in deadly, unstoppable rebellion) would allow us more time to pleasure ourselves by watching holographic telly or writhing in eroto-pods.

When authors weren’t fantasising about greater luxury (and, by the way, failing to predict the advent of the desktop computer) they were dwelling on death: nuclear armageddon; suicide booths; invasions of tentacled aliens armed with death rays and riding massive, tripod-like killing machines; monstrous, ambulatory plants from outer space with a bottomless hunger for human flesh.

The Grim Reaper’s counterpart in inevitability, the taxman, never got a look-in – and yet, what else but taxes would pay for nations’ systems of elevated, pneumatic tubes that propelled commuters across cities in seconds?

And what would be more of a time-saver than being able to calculate and file one’s self assessment return with the press of a single button, or even a mere thought?

The days of such tax admin are surely far away still – but they’re not unthinkable as the tools become increasingly sophisticated, digital and online.

Phill Robinson, the MD of accountancy software provider IRIS, predicts a big shift in the next three to five years towards cloud-based systems, which will be cheap, resilient, available 24/7 from anywhere with an internet connection, and accessible by any device with web capability.

‘A current challenge to accountants is how they receive clients’ information: it could as a Tesco bag full of receipts or a spreadsheet that can be fully interpreted only by the client,’ he told me. ‘The cloud would solve that problem’.

Phill went on to illustrate a set-up in which a taxpayer updated his/her/its tax-relevant information in real time via a secure cloud application on which the accountant could keep tabs, thereby forming an ongoing, accurate view of the clients’ fiscal health.

Another advantage would be increased communication: a benefit of the cloud that is frequently promoted by its advocates.

‘Some accountants talk only to clients at points of compliance, but online systems allow for a more collaborative relationship, thus adding value to an accountant’s services,’ said Phill.

He went on to remark that what many people call the cloud is not purely so, but simply accounting software hosted and made available online by a third party.

While such an arrangement is cost effective for the tax adviser, it lacks efficiency of scale because hosting firms run a machine per taxpayer. A true cloud-based service would be from a single server, on which accountants and their clients would have their own secure online spaces and access them via unique logins.

There are, fundamentally, a couple of reasons why such a thing doesn’t already exist for tax advisers. For one, tax software is more complex than its bookkeeping equivalent (which expanded into the cloud with relative ease) and will take time to be designed and built for the web ‘from the ground up,’ said Phill, adding that the tax sector is more conservative than other industries when it comes to embracing technology.

The tax product manager of Software giant Sage, Andy Laver, agreed with Phill’s final point; tax accountants do tend to be cautious, especially when they’re handling other people’s data.

But he’s less certain about the imminent online revolution. It probably will come, he said, but not within the next few years. People’s desire for the cloud has yet to reach critical mass: ‘I don’t think you’ll see the end of current methods so soon.’

Yes, there is interest, but acceptance of web apps isn’t widespread. And even when interest has grown significantly there won’t be a sudden mass migration to the cloud.

One reason might be generational, said Andy, but it would be unfair to claim that people over a certain age reject the internet. We have to take into account taxpaying clients; they could dictate the pace. If they are unwilling for their data to be processed online, their advisers will have retain more traditional methods. 

He acknowledged that the cloud has the potential to improve client-accountant communications, but ‘some accountants enjoy good relationships already with their clients, and online would enhance this rather than replace or improve. What some might see as a killer function others will regard as peripheral’.

What’s more important to Andy is offering choice: multiple options to make use of accounting software. His industry has got to provide what customers want, and also to how they use applications and on what devices.

If the web is to spark revolution soon, it will more likely come in the way providers charge for software. The trad model is an annual licence fee, but online would allow for a pay-as-you-go model, with accountants buying access only per taxpayer who’s happy with cloud computing, rather than forking out for something that won’t get used for every client. 

In the end, said Andy, it will be the accounting industry that will dictate how software providers move forward, not vice versa.

Wordle: Tax software

Categories: IRIS , Sage , Admin
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