Accountants need to accept that Internet-based applications that can run everything they do in and out of the office are going to be the norm, and practitioners will be at a competitive disadvantage the longer they wait to embrace them, according to a speaker at the 2010 New Jersey Accounting, Business & Technology Show. 

That was the message delivered by Eide Bailly senior manager of tax and technology consulting Greg LaFollette to practitioners on Wednesday.

LaFollette explained that over the years accountants have been slow to accept new ways of doing business, whether it means using service bureaus instead of an in-office staffer to do write-ups, or moving from DOS to Windows. The same applies to moving from on-premise to online software for everything from tax preparation to workflow management and file storage.

“Cloud computing as we know it now is still a few years away from full acceptance, but I guarantee you, within 10 years there will be no premise-based software in the business of tax and accounting,” said LaFollette. “Think of it this way: What are you going to do when a client comes in and asks to post their completed tax returns on your portal so they can download it? You will be at a severe disadvantage if you can’t do that. Imagine going to a bank that doesn’t allow you to do online banking. You’d go somewhere else.”

LaFollette explained that Software-as-a-Service and cloud computing are virtually one and the same, with SaaS the service being delivered, and the cloud being the platform or medium through which it is delivered. LaFollette told his audience not to be confused by companies that host on-premise software and deliver it as “The Cloud” versus companies that create and deliver solutions that are 100-percent Web-based.

If there was any current indicator as to how major vendors view the importance of cloud computing to the accounting profession, LaFollette said to look no further than companies such as Thomson Reuters, Intuit and CCH, which are making major investments in pure cloud-based systems that will be released on the market over the next couple of years.

“What this all means for us is that whatever [on-premise software] you are currently buying, you need people, networks and hardware, and you pay heavily for all of them,” said LaFollette. “In the SaaS world, those costs will be dramatically reduced.”

Finally, LaFollette noted that practitioners need to consider several questions when selecting a SaaS application:

*    Is the service’s privacy policy published?
*    Does the service use 128-bit SSL [Secure Sockets Layer] encryption?
*    Is it Statement of Auditing Standards 70-compliant, or even Standards for Attestation Engagements 16-compliant (the latter will replace SAS 70 as the data-auditing standard in June 2011).
*    What protection/protocols does the data center have?

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