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The benefits of cloud-based accounting for FE

Everybody is talking about the cloud and how it can significantly cut costs for the public sector, especially through widely publicised initiatives such as the Government’s G-cloud. What’s less visible is why it’s relevant for colleges.

With the FE community under increasing pressure to do more with less, budgets have been squeezed so that colleges need to find alternative ways to reduce costs without impacting service delivery. Cloud computing technology promises to help by allowing common IT applications & services that were traditionally maintained internally, to be now accessed from a third party via the Internet at a lower cost.

One of the easiest applications to move to the cloud is the finance function, because it can offer enhanced efficiencies relatively quickly. So how does this work in practice? In its simplest terms managing your finances in the cloud means that a third party hosts your finance application and data remotely which you can access via the web and a standard browser. This is usually charged by a monthly fee on a ‘pay for what you use’ basis. Whilst some providers may offer a flat rate others may charge according to number of transactions. The service provider is also responsible for systems availability and data backup. The beauty of this approach means that you can reduce your capital expenditure and running costs, plus there is also the opportunity to share cloud based services with other colleges, leading to additional savings.

How can cloud form part of shared services?

The AOC defines shared services as ‘the shared provision by one or more organisations of a specific service or function’. The introduction of cloud technology makes it easier for colleges to share the cost of IT applications such as finance. Already, 9% of FE institutions are already using a shared service for their finance function. This can work in a number of ways but perhaps the most common is a hub approach whereby a ‘lead’ college is appointed to run the main finance application and then sets up partner colleges as ‘entities’ who can then access their accounting system via the Internet. This saves costs for the partner colleges and also gives the lead college an additional revenue stream.

Are all Cloud solutions equal?

With the majority of vendors now announcing cloud versions of their products, the number of options can be overwhelming, with confusion between what solution offers what. While some are clearly aimed at smaller commercial organisations and give limited functionality, others offer more sophisticated packages with a broad range of functionality. However, not all give you the facility to easily integrate your accounting data with other back office systems.

If you want interoperability with existing on-premise systems such as your student records system, there are some ‘open’ solutions on the market that will easily allow you to update information between systems in real-time. This means you do not necessarily need to move all your systems to the cloud at once, therefore retaining any investment that you may already have made.

The accessibility of financial information via the cloud can also differ between suppliers. Entry level solutions will provide more basic information, whereas more advanced systems enable individual users to personalise their own dashboards and workflows and display financial information on any type of device whether it is a tablet PC or an iPhone. If mobility is important between sites, then being able to access data at any location on any device is a must.

Data issues

One concern often voiced about cloud computing is how and where your data is held. Ideally you need to select a supplier that stores your data within the UK, otherwise you could potentially infringe data protection legislation which does not permit data to be hosted overseas.

On the whole there are many persuasive reasons why colleges should move their finances to the cloud. As part of a shared services plan it can produce average cost-savings of between 20-40% and there are plenty of other benefits too.

  • Take advantage of new functionality to improve efficiency

  • Less budget required as no on-going costs of hardware/software & licensing

  • Delivered via the web so is location independent and ideal for shared services between a group of colleges

  • Pay for what you use on a monthly basis

  • Reduce level of IT staff required

  • Data is held remotely with service provider responsible for back-ups

  • Allows you to focus on core finance issues without the distraction of technical issues

  • Always on the latest software with minimal downtime for upgrades

  • Service level agreements offer peace of mind

  • Short implementation time

Simon Kearsley is chief executive of Symmetry, the accounting software vendor

For further advice or to evaluate a cloud-based accounting solution, speak to a Symmetry advisor on 0117 900 6262. The company can also provide more information on how cloud-based accounting can form part of a shared services strategy. LinkedIn members may also like to join the “Cloud Accounting in FE” group.

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