Can cloud accounting help your sustainability and bottom line?

Whatever your sector, cloud accounting can be both the means to support your sustainability aspirations, and indeed the end result in itself.

The UN World Commission on Environment and Development in 1987 defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”

The nature of True-Cloud solutions is that they are designed to revolutionise how you see and consume your IT. To provide an “any device-any browser” fully scalable approach. Future generations will see our historic reliance on sever rooms and physical servers in the same vein we now consider electricity on demand compared to having our own generators, or water on demand compared to our own water pumps. The next stage in evolution is to consume our technology on demand.

True-Cloud challenges us to consider a future without local servers, local infrastructure, UPS, switches, expensive cabling, with vastly reduced capital IT hardware spend, reduced IT obsolescence, and finally no more dusty rooms full of old PC’s and equipment.

And that’s before we get to the actual running costs, the air conditioning in the server room, the electric bill for 24/7 power. The highly specified workstations with greater power and processor needs, which can be reduced, or indeed replaced with alternative devices, more portable, more versatile, and designed for the cloud-native approach.

By availing of True-Cloud Accounting software you benefit by being part of a larger environment such as Microsoft Azure in the case of iplicit. It is well documented that the resources needed to provide your cloud software will require less IT and energy resources to run the equivalent of what you have locally. These green and energy-aware cloud centres can allocate resources as and when needed, unlike your local servers which are constantly powered by electricity.

Cloud operating servers and data storage servers can be run up as and when needed. The nature of using cloud multi-tenanted technology means that more applications, data sets, and users can be all facilitated on a far smaller percentage of hardware with a far greater optimisation on that hardware’s capacity – between 80% to 90% actively monitored performance utilisation.

Contrast this to your current servers inhouse where these energy hungry, expensive resources are very much under-utilised even during the working day, but still constantly consuming energy and with constant wear and tear on parts. Not just during the working day, but also for the remaining out-of-hours, 16 hours per day and 48 hours of a weekend. In some studies, actual utilisation of your inhouse IT can be as low as 15% to 20% on average, and even less when staff need to dial in from home to their constantly powered PC’s in the office, actually doubling your IT and energy exposure.

The intelligence used to manage these highly flexible cloud servers ensures that fewer servers are used compared to the status quo. The servers are built to a higher level of specification to perform more optimally than their retail equivalent, they are powered far more efficiently, and their parts are maintained more successfully, all leading to a quantifiable reduction on your carbon impact and overall running costs.

But sustainability isn’t just about carbon and electricity. You need to ensure that your business is sustainable, that it has a future that it can scale to. Moving to the cloud allows you to far more easily scale up or down, to be more flexible and responsive to the demands of your staff, your customers, and stakeholders.

This simultaneously reduces the cost of such scaling, avoiding the need for expensive capital equipment roll-outs, engineers, system downtime and productivity impacts and all whilst reducing your IT carbon footprint.

Data centres are often in the press in Ireland for various reasons. What I would pose however, is an example of our iplicit solution which is a True-Cloud accounting software that is hosted on Microsoft Azure. As we expand our customers, we can very easily expand our resources needed, we can manage the tenants (think mini engines) that are needed to load balance this usage across the most optimal servers and resources, powering some up or down as the needs rise, or as the needs decrease such as weekends or out of hours. Think of say 100 organisations using a tiny fraction of what Microsoft Azure can offer and all these resources being optimised for the best energy usage, the best performance, and the best IT maintenance policies.

Now consider these same 100 companies using their own server-based software 5 years ago, in their own server rooms, own physical servers, heavy duty workstations, licence costs, upgrade costs, server downtime, hardware replacement costs every 5 years… there is a genuine economy to this scale. The sum of the parts is far more efficient than the individual fiefdoms.

But it’s not just the technology itself. Cloud isn’t just the end result, it’s the means to do that bit more.

Versatile accounting software can offer dividends in the sustainability of your company, your ability to manage your impact on the environment, and the wellbeing and retention of your core employees.  Using technology to remove the drudgery of repetitive data entry and disjointed workflows will free your colleagues for more worthwhile and rewarding tasks benefiting their growth, satisfaction in their role and future, and your business success It’s not just the earth that needs your vision and sustainability, it’s your organisation and your staff.

At a pure functional level, Accounts departments can benefit from immediate changes such as

  • Fully paperless office, no printed sales invoices, statements, or debt chase letters. All electronic, all automated with triggers, reminders, and alerts. Saving time, effort, paper, postage carbon miles, and avoiding mind-numbing repetition for your accounts colleagues and improving morale.
  • Accounts payable departments can insist on the removal of printed invoices being received, drop/drag your pdf invoices from your email into iplicit so they are already available for review at time of data entry or workflow approval or future audit, no more printing, filing, storage, or forwarding from pillar to post for manual approvals…seamless, fluid, and efficient.
  • Working remotely doesn’t require invoices to be posted from one home or office to another for approvals – electronically scan / drop in your incoming invoices together with copies of quotes, orders, delivery notes and always have them linked and available online.
  • Still writing cheques? Remove the final burden, streamlined purchase payment processes should lead to simple bank Sepa file digital uploads and supplier payments, reducing staff time and effort.
  • Remove double entry – why should your burdened accounts colleagues have to re-enter manual expense claims or timesheets on the system on behalf of other colleagues – empower all users to place requisitions, expenses, or timesheets with full approval routing and a seamless flow from source. Obtain full visibility of all commitments against your organisation from budget to requisition and company-wide spend commitments. Better management of cashflow, funding, and risks by having one centralised version of the truth and no department silos.
  • Empower staff and remove drudgery. Use automated and recurring transactions, automatic accruals and reversals, template driven data entry, alerts, triggers, machine learning AI to automate your bank reconciliation, instant analysis on screen, live links to Excel. Harness all that technology can offer to support your colleague’s wellbeing and job satisfaction. Allow them to benefit from your investment in technology to make their life more rewarding, allow them to focus on more meaningful tasks for the betterment and sustainability of the organisation.
  • Using systemised processes and a unified approach, means that you are not exposed if today’s Hero becomes tomorrow’s risk. Individual employees or departments with, their own unique ways of doing things places a key-person risk of disruption if they leave or go on holidays. Your forward-looking sustainable vision should ensure that your complimentary and supporting systems and processes can aid the individual and not be at the mercy of the individual. Can empower their needs within the greater whole. Succession and continuity is essential in your growth vision and flexible tailorable cloud accounting systems can empower your heroes and your corporate vision. Improving your governance whilst at the same time supporting your workforce with assistive technology is the future.
  • Grade your suppliers by their green credentials, set your own targets for supplier spend across your internal green ratings and easily manage this by tracking supplier credentials, the shipping methods and routes for your product delivery, the carbon effect, and the volume purchased.
  • Extend your corporate travel requisitions and employee expense claims to include mileage, their car CO2 ratings, their airmiles, their carbon impact, together with your calculated savings from working remotely.
  • Implementing purchase order systems for internal requisitions allow you to better monitor what is being purchased for internal consumption and by who… have supplier approval processes for new suppliers, agree select consumables or approved inventory lists of items and preferred suppliers for your colleagues to order from, whether that’s green lightbulbs, recycled printer toner , or even the supplier you buy your furniture from to avoid them travelling from thousands of miles away by sea.

Sustainability is not a big bang. It’s not an end result. It’s an iterative process that you can start in many small ways that become your new norm, it will become part of what you and your colleagues instinctively do, rather than the burden of a separate task. It needs to be intertwined with your purchase, your sales, your product sourcing, your service delivery.

Can we have ulterior motives? Of course.

Highlighting our sustainability credentials will be more attractive to new customers and tenders. Improving productivity and workforce morale will help retain valued staff and in an era of high employment you can scale and expand without requiring more personnel, reduce running costs, operate leaner best practice systems, manage expenditure and avoidable inter-departmental burdens. Lowering your energy costs and your IT costs are silver linings on top of silver linings.

The Accounts department is no longer just the department of record. It falls to us to bear the burden of risk awareness, bear the burden of data measurement and creating the systems that can be absorbed into the day-to-day workflow to ensure the organisations sustainability. Working in seamless partnership with your accounting software, is the future. Expect more from technology and expect more from your accounting software. It’s a living breathing inextricably linked lifeforce that can empower your road to incremental and sympathetic sustainability.

Choosing the right accounting software delivers more than just debits and credits. Why not seek to do even more when you outgrow your legacy accounting software and upgrade to cloud accounting.

Alan Connor
Managing Director
Iplicit Ireland